Finding A Small Cap Alternative In Nautilus

| About: Nautilus, Inc. (NLS)

The large-cap, big name stocks are all you hear about in the media. You know the names - Apple (OTC:APPL), Google (NASDAQ:GOOG), and Caterpillar (NYSE:CAT) are just a few. After listening to the hype, you're probably salivating to buy some of these big name stocks. However, $600, $100 and even $50 stocks are just out of most investors' reach.

If you can't justify paying the big price tag, not to worry, we have a small-cap alternative you can buy instead. Not only will it cost less, you'll be able to buy more shares!

This week, we've found a great alternative to sporting goods industry giant, Pool Corp (NASDAQ:POOL). If you didn't know, POOL distributes more than 160,000 national brand and private label products to nearly 80,000 wholesale customers. That could be why the stock is trading at $44.41, and broke out to a new 52-week high today.

The recent stock rally in POOL has sent their market cap well over $2 billion, and that's something way out of a small cap investor's domain.

Now, I've found a stock that's doing exceptionally well in the health, fitness, and sporting goods industry. And you'll be happy to know this stock has a market cap of just $118.08 million, and trades under $4.00 a share.

The best part about this company is the specific segment of sporting goods they're focused on - the fitness equipment industry. What's more, they've taken their huge, well-known name and are leveraging it to focus even more specifically on the home fitness equipment segment.

Nautilus (NYSE:NLS)


Nautilus is a former icon in the fitness industry. The name itself has been around for decades. But the new company, NLS, currently sells products under a number of brands including Nautilus, Universal, Schwinn Fitness, Bowflex, CoreBody Reformer, and Peak Fit System.

From a performance standpoint, you can see that NLS shares are trading just off a 52-week high. And given the huge push for "New Year's Resolution" fitness, one can safely reason Nautilus will have a strong first quarter in 2013.

But are NLS shares worth buying near a 52-week high? The answer is Yes.

Given the fact the company is trading at just 9.7x future earnings, it's clear there's still more upside in this stock. And if earnings from Q4 meet or exceed estimates, there's sure to be even more upside. With no long term debt, and a peg ratio of just 0.35x, I'd say NLS is one of the better investments in the sporting goods industry, and probably THE best in the small cap arena.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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