Nautilus

Nautilus ( NLS - $8.35 ) is scheduled to publish its Q1 results next Monday.  The company has a hot new product that was introduced in January.  It's being sold directly via television ads to the consumer market.  The company already has a strong entry in that segment.  Nautilus operates a commercial business segment, too, distributing products to health clubs.  In addition, consumer oriented sales are made through retailers at lower margins for standard machines like universal gyms, bikes, and treadmills.  The direct products are unique machines, backed up with patents.  They earn higher margins, unless the advertisements fall on deaf ears.  Nautilus was a really big winner for us more than a decade ago, when it swept the market with another direct item, the Bowflex.  The company is larger now so the relative contribution from the new line won't be as big on a percentage basis.  But earnings could rise faster than the analysts who follow the company are predicting.  It's a $1,000 product aimed at upper middle class health conscious consumers.  In today's Obamanomics economy, that's the sweet spot.