Rebound for Workouts

Believe it or not the NBA tips off tonight. So we now have the World Series, NFL, NCAA football, the NHL, and NBA all playing at the same time.   Maybe it’s time for a sports play.

Back in our May 30-30 report we highlighted Nautilus, Inc. (NYSE – NLS - $7.58) with a price target of $10.00 The stock climbed to $9.77 in mid July, dropped to $6.23 over a one month period, and has climbed steadily back to May levels closing at the exact price level we initiated coverage with yesterday. Bad financial results for 2Q13 were a main contributor for the drop.

NLS passes our three-tiered checklist for the current market. The charts are very bullish in 5-day to 50-day DMA. Additionally, top line revenue is set to grow 11.5% from 2013 to 2014 which puts the FY P/E at 13, still very low. Finally, the stock has been trading approximately 200,000 shares per day since the accumulation phase began in late August.

Nautilus is entering the all important Holiday season and has unveiled its latest line of Schwinn® cardio vascular training products and Bowflex® Select Tech trainer. The success of these products will be crucial for the forecasts mentioned above.

We are going to reset of price target of $10 for NLS sometime in 1Q14.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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