"Sherborne Investors recently sent a "demand letter" to Nautilus asking that the company hold a special shareholder meeting, and calling for the removal of four incumbent directors from the board. Sherborne's demand letter calls for the removal of incumbent directors Peter Allen, Evelyn Follit, Donald Keeble and Diane Neal. It also calls for the election of four Sherborne nominees, namely Edward Bramson, Gerard Eastman, Michael Stein and Richard Horn, as well as certain technical proposals, including bylaw amendments. Sherborne currently holds 7,405,455 shares (23.5%)."

Short Interest Ratio: 19

Insider Buying recently: $28 million worth of stock in last 6 weeks

Although people don't seem to want to work for their goals, gym equipment is still a growing industry.

From Barron's 8-6-07:

"Sherborne Investors increased its stake to 6.62 million shares (21%) from the 6.28 million (19.9%) that it had reported on July 26."

Downgraded by RBC from Outperform to Sector Perform

BUY

- Down 14% yesterday after the company lowered its first-quarter guidance due to worse-than-expected sales in North America.
- Trades for 7.5x cash flow
- 9.5M shares short so 26 short ratio
- Looking for a bounce over the short term

Upgraded by Matrix Research from Strong Sell to Hold

Downgraded by Merriman Curhan Ford from Neutral to Sell

Undervalued Growth - turnaround

Merely because a stock is cheap this is no indicator of value. Check out the 5 year chart -- erratic. Uneven income stream -- hot, cold, hot, cold. The fitness business should be more predictable. Inconsistent track record -- suggests poor management. Sell.

NLS is ok. But CYBI is a better stock in the exercise equipment field.