This Small-Cap Could TRIPLE Soon

Mar 20, 2021

Everyone thinks the home-fitness trend will come to an end as we move toward a more open America.

They’re wrong.

How can I be so sure that this trend will be one of the few that does not reverse course in 2021?

By following the powerful consumer data and insights that LikeFolio brings to the table.

Just take a minute to look at this chart:

Every one of those trends is signaling that people are loving working out from home.

You can almost hear the world saying “No, I’m not going to rejoin the gym; I am going to take a spinning class from my virtual trainer and just work out at home… it’s a great HIIT Training program.”

Wall Street doesn’t get this yet. But they will… soon.

And more than one company will surprise them.

Nautilus is still (barely) under the radar

Almost exactly one year ago, nearly every fitness center across America shut down.

Consumers scrambled, looking for anything they could get their hands on to enable an at-home workout regimen.

To see just how dramatic and fast this shift was, take a look at the consumer demand spike that home-fitness manufacturer Nautilus experienced this time last year:

The green line is LikeFolio’s proprietary measure of consumer demand levels, and the grey line is the price of Nautilus (NLS) stock.

Obviously, our consumer demand data was extremely powerful here — tipping off investors to a tsunami of revenue headed Nautilus’s way — way before Wall Street took notice.

In fact, as I write this, NLS stock is up more than 1,500% in the past year as Wall Street began to take note of what the LikeFolio consumer demand data was showing us.

But as incredible as a 1,500% gain in 12 months is… we still think Wall Street is significantly undervaluing the company for three reasons:

  1. Recent selloff — NLS stock has fallen approximately 30% from the highs it hit just a month ago. All because Wall Street fears that the home-fitness boom is at risk as things open back up. Wrong!
  2. Low valuation — Even after its monster run over the past year, Nautilus still has a market cap of just $650 million. And that is with over $550 million in annual revenue and strong profitability.
    It’s completely reasonable to think that this company should be sitting at a $2 billion valuation ($60/share!), which would only put it at a more reasonable price-to-earnings (PE) ratio of 21.
  3. Sustained demand — Look again at the chart above. Consumer demand levels for Nautilus are maintaining at +216% on a year-over-year basis. This is NOT a flash in the pan, kneejerk reaction to shutdowns. This is a real company benefitting big from a very real, sustained trend.

The Peloton Connection

What we’re seeing with Nautilus right now reminds me a lot of what we saw with Peloton (PTON) a year ago. A huge surge in consumer demand, happy customers, and a massive consumer macro tailwind.

In fact, last year we were able to put out a Bullish Alert on PTON right as Wall Street was tossing every stock to the curb.

Here’s how that played out:

Not bad!

A +325% return in just 12 months by simply following the consumer data and being willing to tell Wall Street that they have it wrong.

And that wasn’t the only one we got right in our now-famous COVID Shopping List report, nor was it the biggest gain.

In fact, that report covered 13 companies in total. Each and every one of them is profitable on the year that followed.

Here’s the full list:

PTON for a 325% gain…
CHWY for a 119% gain…
DIS for a 94% gain…
MSFT for a 50% gain…
NFLX for a 42% gain…
NKE for a 70% gain…
WMT for a 17% gain…
ROKU for a 298% gain…
SBUX for a 66% gain…
TTD for a 298% gain…
ZM for a 128% gain…
RDFN for a 372% gain…

All by simply following the data.

The Next Huge Trend Is Here

I’m very proud of the success we’ve had over the past year, and excited about the future for Nautilus and the other companies we’ve identified that could benefit huge from the acceleration of the home-fitness trend.

But as America starts to open up, we’re starting to see an absolute bonanza of major consumer behavior shifts… huge trends… with even bigger opportunities in individual stocks.

Andy Swan,
Cofounder, LikeFolio