Nautilus (NLS) is a marketer, developer and manufacturer of branded health and fitness products sold under the names of Nautilus, Bowflex, Schwinn, StairMaster, TreadClimber and Trimline. The company's products are distributed through diversified direct, retail and commercial sales channels, and it is best known for the Bowflex and TreadClimber lines of home fitness equipment and FITRest mattresses.
This stock was one of our outstanding selections a few weeks ago and once again, the issue has emerged near the top of the list in a "technicals only" scan for bullish candidates. Today's rally came on the heels of a report that first quarter sales will be higher-than-anticipated. In addition, the company says it has reached a settlement with the U.S. Consumer Product Safety Commission and will pay about $950k for failing to report product defects in a timely manner. Apparently, investors are happy with the settlement and the company's fundamental outlook is solid, based on sales improvements in retail and international channels, as well as new product introductions. Earninsg are due on 4/27/05.
Traders who wouldn't mind owning NLS at a basis near $22 should consider this position. Target a higher credit ($0.45-$0.50 per contract) for the sold options initially, to take advantage of any near-term consolidation in the underlying issue.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put MAY 22.50 NLS-QX
Target Price = $0.45 Open Interest = 105
Potential Profit (5 contracts @ $0.45) = $225
Initial Margin (5 contracts) = $3,880
Return on Investment (max) = 4.5%
Cost Basis in Stock = $22.05
Days to Expiration = 39