The Nautilus Group (NYSE: NLS) found itself in pretty impressive company (Johnson & Johnson, Royal Bank of Canada, The Sports Authority) on a Fortune magazine list of good long-term stocks. In the survey, the magazine combined a classic value screening process with a growth screening process to measure more than 4,000 U.S. stocks. It ended up eliminating more than 99 percent of them, and wrote it considers the 35 "growth at the right price" survivors the best long-term equity investments around. Using a sophisticated discounted cash-flow analysis, ValuEngine, an independent quantitative analysis firm in Stamford, Conn., screened the 4,000 stocks for those selling below what it calls their fair market value, a number incorporating such measures as a company's trailing 12-month earnings per share, the analyst consensus of its future EPS over the next year, and the current yield of the 30-year Treasury bond. In the end, ValuEngine comes up with the theoretical price at which a stock should be trading. The difference between the stock's current price and its fair value then is calculated to show how much the stock is trading at a discount. That screening cut the number to 500, then Fortune screened them further to reach the final 35 in three groups -- large cap, small- and mid-cap, and international. Nautilus found itself in the small- to mid-cap group with The Sports Authority, the only two sports-related companies in the finals.
SNEWS View: Nautilus stock closed on Dec. 13 at 14.48, down substantially from its 52-week high on May 2 of 45.89, but up a bit from its low on Nov. 11 of 12.40. With that kind of price, it has a lot of room for growth.