It was a year when a T-shirt maker outpaced the hottest name in social media, when a downtrodden airline soared while one of the world’s biggest computer makers short-circuited. For all the much publicized fears about the euro zone’s future and a looming fiscal cliff in the United States, it was also a year that produced solid gains in most of the world’s stock markets. Looking back on 12 months when very little went as expected, John Heinzl and David Parkinson take you on a tour of the stars that shone – and the dogs that shed value.
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WestJet Airlines Ltd.
“This is Captain Saretsky speaking. I’d like to thank all you investors for choosing WestJet, and request that you try not to trample each other in the rush to get on board. Sheesh, it was only a couple of years ago that everyone was stampeding for the emergency exits. We were off course, losing altitude, our profits were undershooting the runway and our growth story was stalling mid-flight. Now? Profits are 80 per cent above last year’s level, and today’s in-flight services include record passenger loads, strong prices and some of the best operating margins in years. The in-flight movie once again features a growth story; we will be handing out route expansions and a new small-aircraft regional service shortly. We hope you enjoy the flight – while it lasts.”
– David Parkinson
WJA-T22.23 0.38 1.74%As of Jun 17, 2013 4:00
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Nexen Inc.
Nexen really is a Cinderella story, isn’t it? Cinderella was stuck in a bad situation with no hope whatsoever of getting out, while the people she worked for constantly criticized her performance. Then suddenly, a miraculous, magical intervention took her from rags to riches. And Nexen? It was dogged by its expensive, underperforming Long Lake oil sands project, while investors scorned its uneven performance, and weak prices and slipping production expectations seemed to doom the company to another year of thankless toiling. Then suddenly, Chinese energy giant CNOOC waved its magic wand with a $15-billion (U.S.) takeover deal – which Ottawa approved shortly before the stroke of midnight, averting any chance it would all turn back into a pumpkin. Another implausible story with a happy ending.
– David Parkinson
NXY-Tn/a n/a --%As of n/a
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Gildan Activewear Inc.
T-shirts, socks, underwear – Gildan makes everything a man needs to enjoy a day of drinking beer and watching football. Lately, Gildan has also been making something else: lots of money. Mind you, it wasn’t always this way. The company was hammered during the financial crisis and last year it was clobbered by soaring cotton costs. But with cotton prices down sharply, Gildan’s stock has come roaring back. In addition to its core business supplying blank T-shirts and fleece to the screen print market, the company is expanding in private label apparel and pushing its own branded underwear and socks. Shareholders were rewarded for their patience with a 20-per-cent dividend hike in November, but nobody’s happier than CEO Glenn Chamandy, who bought millions of shares during the 2008-09 meltdown. Guess who’s treating himself to a new pair of socks?
– John Heinzl
GIL-T41.15 0.10 0.24%As of Jun 17, 2013 4:00
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PulteGroup Inc.
A U.S. home builder is one of the top stocks of 2012? No, that’s not a misprint. In fact, PulteGroup’s year-to-date advance of 179 per cent through Friday made it the best performer of any stock on the S&P 500, underlining the nascent recovery of a sector that had been left for dead just a few years ago. Fuelled by low interest rates and rising consumer confidence, U.S. housing starts in October hit a four-year high, with new home construction up a hefty 42 per cent from a year earlier. Builders are feeling better, too, with confidence rising for a seventh consecutive month in November. Perhaps most shocking, home builders are actually making money again. PulteGroup’s third-quarter profit of $117-million (U.S.) was its highest since the the third quarter of 2006, before the bottom fell out of the U.S. housing market. Thank goodness for the “fiscal cliff,” or Americans might actually start feeling like there is hope for their economy.
– John Heinzl
PHM-N21.42 0.56 2.68%As of Jun 17, 2013 4:02
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Apple Inc.
With its breathtaking ascent and spectacular belly flop, Apple’s stock deserves a category all its own. But since it is poised to finish the year about 26 per cent above where it started, we’ve included it among the stars. Arguably the most talked-about company in 2012, Apple began the year with results that smashed expectations thanks to record sales of iPhones, iPads and Mac computers. It went on to announce a dividend – a way to spend some of its $100-billion (U.S.) cash hoard. Then something went wrong. Actually a lot of things. There was the Apple Maps embarrassment, the departure of executives in charge of software and retail, and the rising threat from Samsung and others. Whether Apple’s stock recovers could hinge on its first-quarter results, which include the critical Christmas season and will be released in January. Our prediction is … actually, given the sort of year Apple has had, we’ll sit this one out.
– John Heinzl
AAPL-Q432.00 1.95 0.45%As of Jun 17, 2013 4:00
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Niko Resources Ltd.
With just a single trading day to go before the end of the year, Niko looks like a lock for the title of S&P/TSX Composite Dog of the Year. This isn’t the Westminster Kennel Club’s trophy we’re talking about. Niko – a Calgary-based company that explores for oil and gas in various exotic nooks and crannies around the globe – is on pace to be the company in the index with the biggest 12-month decline. This year it suffered a string of crushing drilling disappointments, slashed its reserve estimates, had its borrowing line cut, eliminated its dividend, and last month announced another dry well in its key Indonesian offshore deep-water prospect. The company thinks the market is overreacting to a few setbacks in a long-term drilling program, but investors are starting to wonder if this dog can hunt at all.
– David Parkinson
NKO-T7.65 -0.24 -3.04%As of Jun 17, 2013 4:00
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Hewlett-Packard Co.
HP used to be known for making terrific printers and passable desktop computers. Now it’s known for making colossal missteps. It’s bad enough that competitors’ technology has overtaken HP, which looks old, slow and irrelevant most of the time. It’s even worse that sales and market share are going backward. But two $8-billion-plus (U.S.) writedowns in the space of three months, on two big acquisitions gone massively wrong? More than $17-billion in net debt? Allegations of illegal sales in Syria? A revolving door in the corner office, where the fourth CEO in barely two years, Meg Whitman, is already starting to sense that there’s a target painted on her back? It’s more than just the industry that’s passing HP by; it’s clear-headed thinking, too.
– David Parkinson
HPQ-N25.16 0.42 1.70%As of Jun 17, 2013 4:00
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SNC-Lavalin Group Inc.
As my mother used to say, “If you don’t have anything nice to say, don’t say anything at all – especially in matters before the courts and allegations of potentially illegal activities. Are you seriously going to wear that shirt with those pants? Blah blah blah your sister...” (Mom said a lot of stuff.) So, I’m going to do my best, Mom. Wow, some people in Libya, and in Montreal, too, seem to have won the lottery! Good for them! It’s so nice that the authorities are attempting to arrange for a couple of former executives to soon have cozy new homes – at state-run facilities – all expenses paid! Um ... nice that a bunch of new people will get a turn on the board of directors! Uh ... those ... um ... lucky shareholders ... they get a nice “re-imagined” stock price, complete with ... uh ... a new-and-improved dividend yield? Hey, those shoes look good! Have you lost weight?
– David Parkinson
SNC-T44.24 0.34 0.77%As of Jun 17, 2013 4:00
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Facebook Inc.
Lots of people use Facebook. Therefore, Facebook must be a good investment. That, in a nutshell, was the seductively simple logic that attracted investors to the social networking site’s massively hyped IPO. From the moment it went public in May, however, Facebook was a bust. Technical glitches on the Nasdaq marred the first day of trading, and Facebook and its investment banks were soon slapped with a lawsuit by a group of investors who alleged that they were provided misleading information about the company. By September, the stock was trading at less than half of its May IPO price of $38 (U.S.) amid growing concerns about slowing growth, the dearth of mobile advertising revenue and the stock’s rich valuation. With “friends” like Facebook, who needs enemies?
– John Heinzl
FB-Q24.022 0.392 1.66%As of Jun 17, 2013 4:00
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AGF Management Ltd.
As Grandpa used to say, “If you want to get rich, don’t buy mutual funds. Buy shares of mutual fund companies.” Evidently, Grandpa never invested in AGF. Hammered by redemptions, manager departures and underperformance of some of its funds, AGF’s shares have lost nearly half of their value in the past two years, burning investors who were attracted to the stock’s juicy dividend yield. The future doesn’t exactly look bright, either. Unlike some of its competitors, AGF lacks a company-owned distribution network that can help sell its products. And many of its products are equity mutual funds that are a tough sell to investors who still have fresh memories of the financial crisis. All of which helps to explain why the stock is now yielding a spectacular – and, frankly, scary – 11 per cent.
– John Heinzl
AGF.B-T11.71 -0.08 -0.68%As of Jun 17, 2013 4:00
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