Shares of Nautilus, Inc. (NYSE: NLS) have staged an impressive comeback today. After closing yesterday at $6.30, shares sank as low as $5.36 in trading this morning, their lowest point since 1999. But the stock rebounded as high as $7.12 in the afternoon.

A pretty ambivalent reaction to the terrible earnings the company released yesterday afternoon, wouldn't you say? Sales plunged 16% for the third quarter, and the company lost 42 cents per share compared with earnings 9 cents (before a tax reversal that increased the gain to 29 cents) in the prior year quarter.

CEO Robert Falcone, who was elevated to the position in August commented that "We are very disappointed by Nautilus' third quarter financial results. Our shareholders can be certain that we are implementing the changes necessary to address these shortfalls in order to drive sustainable growth and value."

With stock badly beaten down, it may be time for investors to take a look at the company. Sherborne Investors owns 23.5% of the company, and is locked in a battle for control of the board as it seeks to unlock value for shareholders. Robert Falcone doesn't like them too much, telling The Oregonian that "In my opinion, they're slash-and-burn people, and they would try to get the stock up for the short term without giving any regard to long-term benefit. That's not the way of running a company... They don't really know anything about the company as far as we've heard. What are they going to tell the people that have been here for years?"

Of course, looking at Nautilus' results over the past few years, I would argue that the company's management doesn't know much about running a company either -- unless by running a company you mean paying yourself a lot of money while shareholders lose millions.

Still, the big decline and strength of brands like Bowflex and Nautilus could make this a stock worth keeping an eye on, especially with Sherborne keeping an eye on things, looking out for the interests of outside investors.

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Shares of Nautilus (NYSE: NLS), the maker of the BowFlex and the StairMaster, have hit a 6-year low after the company reported another disappointing quarter last week. To make matters worse, Herb Greenberg wrote an interesting piece on the company, based on an interview with an analyst who claimed that the company was giving him the silent treatment after he downgraded the stock. So investors are left questioning the character of top executives, while the company's operational failures speak for themselves.

In steps Sherborne Investors, which reported a 19.9% stake in the company this morning. This is especially interesting because according to the firm's website: "Sherborne Investors is a 'turnaround' investment firm which targets publicly quoted European and US companies that have underperformed the market due to operational, rather than capital structure, issues. We develop a turnaround thesis, acquire a significant equity position, and then obtain a shareholder mandate to effect a change in board composition. Sherborne does not agitate for others to make changes; rather, we assume responsibility for directing or managing a turnaround for the benefit of all shareholders."

The shares are badly beaten down and the company is need of a turnaround. But there's no question that the core brands have a lot of value, and stock may be undervalued now that someone has arrived on the scene to shake things up.