|Written by GSCR Staff|
|Thursday, 02 July 2015 05:28|
In this week’s Goldman Guide we opined about some of the huge events that have occurred recently in our nation.
We believe they could have a long term detriment to our country, not necessarily from the actual outcomes themselves, but in the manner in which they were reached. By his own admission, Justice Kennedy admitted in his majority ruling in favor of gay marriage that, “the constitution had nothing to do with it”. Clearly if this trend continues, we could live in the dystopian world of Ayn Rand or George Orwell as our tagline references, no matter how you feel about the issues.
Atlas is also the Greek god featured in health club advertising and logos. There have been some hot IPO recently in the health and fitness space. Fitbit, Inc. (NYSE – FIT - NR) is up nearly 43% in two weeks and MINDBODY, Inc. (NASDAQ – MB - NR) is up nearly 17% in just a little over a week. Franchisee health club chain Planet Fitness is next in the U.S. stock market. The question is, will this trend continue? On a side note, we found this lighter side article from The Atlanticon how to stick to your gym membership.
Finally, we thought, we would take a look at one of our prior small cap health and fitness stock picks. One we have panned or picked over the past two years or so is Nautilus, Inc.(NYSE – NLS - $21.72) is up over 185% since our initial 30-30 pick in May 2013. This is not an attempt to flex our muscles and brag, but to look at this stock based on its individual merit and the momentum of the space.
NLS 2-Year Chart, 200-Day EMA
The chart above illustrates the phenomenal two year run the stock has had, as well as 200-day EMA line in red. NLS is trading well above it. Top line revenue growth has been a huge part of the story, growing 12.8% from 2012 to 2013 and 20.8% from 2013 to 2014. This trend is set to continue with CAGR of 15% on average for 2015 and 2016 over 2014. Margins are also very impressive here. Gross margin of 52% versus industry average of 39%, and operating margin of 13% versus industry average of 6% indicate the Company is optimizing price point and running efficiently. Finally the Nautilus has zero debt as of the end of Q1 2015.
NLS is a well-established brand with a diverse product line. The stock should continue to be a solid play on the overall sector trend. We think $25 is within reach this year.
Have a safe and enjoyable Independence Day!
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small CapResearch blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com