The Globe and Mail

Westport Innovations

The stubbornly cheap price of natural gas was a dark cloud over gas producers this year, but there was a silver lining – and it wrapped itself around Westport. The company makes truck engines that run on cleaner-burning alternative fuels – such as natural gas – and those started looking pretty darned attractive to some big names in the trucks-and-fuels business as oil continued to hover around $100 (U.S.) a barrel. Westport’s stock jumped after the company signed a deal in June with truck-making heavyweight General Motors to research natural-gas engine technology. It jumped again in September when fuel giant Royal Dutch Shell PLC announced a project to build a liquefied natural gas plant and a network of fuelling stations to supply natgas-powered heavy-duty trucks in Alberta – a plan that includes a joint marketing deal with Westport.

David Parkinson

Westport Innovations WPT-T up $15.42 or 84% over year

U.S. 10-year bond

Ever heard the saying, “In the kingdom of the blind, the one-eyed man is king?” In 2011, the blind were the world’s investors … or, maybe, the global markets … led by the utterly sightless European sovereigns … or, maybe the sovereigns were the seeing-eye dogs … no, wait, seeing-eye lemmings. Anyway, the point here is that U.S. government bonds – despite Washington’s tendency to poke itself in the eye with trillion-dollar fiscal deficits, budget crises and threats of credit-rating downgrades – nevertheless offered the best vision for frightened investors, and so they ruled as unquestioned king, with the investing masses pledging their undying loyalty. With all this allegiance shrinking the 10-year yield below 2 per cent, investors can’t help but worry that the king could lop off more than a few heads in 2012.

Yield, year-end 2011: 1.88%

Yield, year-end 2010: 3.29% (Price moves inversely to yield)

David Parkinson

Tim Hortons

It was hard, but with the global economy wheezing, Europe in disarray and stock markets taking a beating, Canadians dutifully cut back by hitting the Tim Hortons drive-thru just five times a day instead of the usual six or seven. Yet even in a challenging retail environment, Canada’s biggest restaurant chain kept its same-store sales growing by hiking prices and introducing higher-ticket items such as lasagna casserole and café lattes or, if you have a blender handy, lasagna casserole lattes (don’t knock it till you try it). Helped by a $400-million stock buyback following the sale of Tims’ half-interest in Maidstone Bakeries, the shares were on a caffeine high for most of the year as the chain fended off increasingly aggressive rivals such as McDonald’s, which resorted to giving away coffee in an attempt to steal customers. Tims’ patrons will give up their double-double when you pry it from their cold, dead hands. Just nuke it, and you’re good to go.

John Heinzl

Tim Hortons THI-T up $8.26 or 20.1% over year

Dollarama

You can count on three things when you visit a Dollarama store: 1) Lineups roughly a kilometre long; 2) Nobody in a green apron to help you find anything; 3) Leaving the store with way more crap than you intended to buy. But an impulse shopper’s worst nightmare is an investor’s best friend, judging by the big run-up in the discount retailer’s shares in 2011. With more shoppers trading down because of the sluggish economy, Montreal-based Dollarama had the fourth-biggest rise on the S&P/TSX composite index in 2011. What’s more, the chain initiated a modest dividend that will almost certainly grow. Even after the share price roughly doubled in the past two years, the stock remains on the “buy” list of a majority of analysts, according to Bloomberg. Compared to the bargains in its stores, however, the stock is starting to look a little pricey.

John Heinzl

Dollarama DOL-T up $15.71 or 54.6% over year

Research In Motion

2011 was the year that buying RIM stock became akin to booking passage on the Titanic: Big, luxurious, state-of-the-art … and sinking fast. Everywhere RIM turned, it hit icebergs. The PlayBook tablet failed miserably; by the Christmas gift-buying season, the device’s price had been slashed in hopes that practically giving it away would attract interest. The vaunted BlackBerry business was hit by a massive network outage that lasted for days and infuriated customers. The launch of the next generation of BlackBerrys has been delayed by nearly a year – an eternity in the cool-gadgets world. The company keeps missing sales and earnings forecasts, even as investors lower their expectations. The stock is worth one-tenth of what it was three years ago. All that’s missing is the band playing Nearer My God To Thee.

David Parkinson

Research In Motion RIM-T down $43.27 or 74.5% over year

Greek 10-year bond

We have the Greeks to thank for the development of theatre – but we could have lived without their theatrics in 2011. Sure, the melodrama surrounding their government’s debt crisis had everything you would want in a financial-disaster story: Political intrigue, rioting citizens, ousted prime ministers, menacing threats from former friends, not to mention that bizarre plot twist of the referendum. But by the time we entered the third act (fourth? fifth? who’s keeping count?), the plot was a confused mess and it was clear that no one had written an ending. No wonder bond traders walked out of the theatre in disgust in the middle of the show. At first we thought they’d headed to the lobby bar to drown their sorrows, but it turned out they all had an appointment for a haircut.

Yield, year-end 2011: 34.96%

Yield, year-end 2010: 12.47% (Price moves inversely to yield)

David Parkinson

Yellow Media

The name says Yellow Media, but investors were sporting different colours in 2011 – namely black and blue. Judging by the company’s proclivity for inflicting pain on shareholders, the bruises may well get worse in 2012. Once lauded by analysts and rating agencies as one of most stable dividend stocks around, the troubled directories publisher slashed its payment by 75 per cent in August and then, under pressure from increasingly nervous lenders, eliminated its dividend altogether in September. The shares – which had fetched more than $17 at their peak in 2006 – are now worth less than a gumball at the grocery store. There’s still hope that the debt-bloated company can make the transition to the digital age, but with losses piling up, print revenues shrinking and some of Yellow Media’s most promising online assets sold to raise cash, many investors aren’t waiting around to see how this story ends.

John Heinzl

Yellow Media YLO-T down $6.015 or 97% over year

Netflix

And the Oscar for the most inept performance by a CEO goes to … Reed Hastings of Netflix. In a move that sparked a massive subscriber revolt, the company split its DVD delivery and movie-streaming services in two and raised prices by 60 per cent for customers who still wanted both. Admitting he’d handled the move poorly, Mr. Hastings issued an apology. He then proceeded to compound the problem by announcing that the DVD rental business would be renamed Qwikster and would have a separate website, angering customers who would henceforth be forced to manage two separate accounts. This prompted yet another mea culpa from Mr. Hastings, who shelved the Qwikster idea but kept the price increase. End result: 800,000 subscribers bolted and the stock plunged 77 per cent from its high. Oh, and Netflix now says it may lose money in 2012. This movie’s going from bad to worse.

John Heinzl

NetflixNFLX-Q down $106.41 or 60.6% over year

S&P/TSX composite index

Having more than 75 per cent of your index in financial, energy and materials stocks is great when the global economy is humming along and demand for commodities is soaring. But when growth slows down, you’d better get out your hard hat. Investors who thought Canada’s benchmark index provided adequate diversification were in for a rude shock in 2011 as the S&P/TSX composite skidded 11.1 per cent, even as the Dow Jones industrial average gained 5.5 per cent for its third-consecutive annual advance. It wasn’t just financials and commodities; other sectors also helped to pull the index into the red. The worst performer was information technology, led by the collapse of Research In Motion. With China’s shrinking manufacturing sector raising fears of a hard landing and Europe’s debt woes far from resolved, there could be more hard times ahead in 2012.

John Heinzl

S&P/TSX composite index TSX-I down 1,488.13 or 11.1% over year