Looking Back at a Few of 2012's Hits and Misses
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Well, folks, we've just about done it. Very soon 2012 will officially be part of history and then we'll have all of 2013 to celebrate or worry about. But before we get into the scary (or glorious) future, I wanted to take just a moment to look back on the hits and misses of the year that was. I've picked a few of the companies I've touched on over the course of the year so we can look back and see how they've fared.
We'll start with the Kellogg Company (NYSE: K), the cereal and snack-maker that I wrote about back in February soon after they sealed the deal to buy Pringles. The Pringles purchase was a good move for Kellogg, giving the company a product with instant name recognition that expanded their company presence in the snack food aisle. Getting a well-known product that complements your existing product lineup nicely is pretty much always a good thing.
So how is Kellogg doing now? Fairly well. Share prices rose after the Pringles purchase, then dropped pretty sharply around late July. Since then, Kellogg prices have been rising steadily until just a few weeks ago. They've been marketing Pringles pretty strongly, too, coming out with a number of limited-time specialty flavors including some sweeter chips that fit in well with the holiday season. They also launched a joint venture with Wilmar International Limited back in September to help expand their product distribution in China. With strategic acquisitions, increased distribution and both new and limited-time products hitting the market at regular intervals it's likely that Kellogg will have a good year in 2013.
Next we'll look at the Mattress Firm Holding Corporation (NASDAQ: MFRM), a mattress seller that I talked about back in April. At the time, Mattress Firm had been enjoying a nice period of growth... stock prices had more than doubled over the course of five months, they'd increased same-store sales by 25% in the previous quarter and they had just inked a deal to buy a competitor and increase their market presence by 800 stores. So how did things go from there?
Unfortunately, Mattress Firm kind of went soft. The company peaked at a little over $46 a share right around the time that things were looking up. They're still reporting growth, with a 51% increase in net sales in their Q3 earnings report and 6.6% comparable-store sales increases, but this growth hasn't stopped the company from losing almost half of its share value. Much of the sleep industry has been suffering similarly, so the problem isn't just with Mattress Firm. CEO Steve Stagner remains confident of increased growth in the new year, but a fragile economy could keep consumers from getting rid of their current mattresses for a while yet.
Also in April I talked about the Campbell Soup Company (NYSE: CPB) and the launch of their trendier "Go Soup" line of soups that come in pouches instead of iconic Campbell Soup cans. From a financial point of view it was smart, trying to appeal to people who might not be buying their soup while trying to save money on packaging. The part that I wasn't really sold on was the "trendy" approach to the packaging as the pouches were kind of cheesy and they ran the risk of people not really taking them seriously. I touched on it again a few months later after seeing Go Soup pouches in stores and in shopping carts; the product obviously had some appeal, and Campbell's lower use of corn than some of its competitors combined with the purchase of Bolthouse Farms beverages potentially put it in a good position for the latter half of the year.
And that's essentially how it played out. The Campbell Soup Company did have a strong end of the year, hitting a 52-week high in November though prices have dropped slightly since then. The company announced a licensing agreement with SodaStream last month for Campbell's V-8 Splash and V-8 Fusion drinks, a deal that stands a good chance of being quite profitable in 2013.
Now then, on to the darling of my list: LeapFrog Enterprises (NYSE: LF). I mentioned LeapFrog twice in blogs this year, first in August and then again in October. I love LeapFrog's toys, I've bought several for my daughter, and I love the fact that they make them educational, interactive, fun and durable. They had one of the must-have toys for the 2011 Christmas season and I'd predicted that they'd be in demand in 2012 as well. The LeapPad 2 made it on pretty much all of the "hot toy" lists. They've also beat their earnings estimates for the past seven quarters so they're definitely making money. Despite this, shares are currently selling for less than they were when I wrote about them. So is LeapFrog in trouble?
After hitting a three-year high in August, LeapFrog fell into a bit of a downward trend with several ups and downs. At the same time, though, the company is gaining market share and has seen a revenue increase of 37% since this time last year. They've significantly increased their cash on hand and working capital since last year as well and aren't holding any debt. They have several popular toy lines, video games featuring original characters and educational DVDs. I think that moving forward LeapFrog is going to do quite well and will likely see significant gains in 2013.
To wrap this up, I'd like to make a brief mention of THQ. I wrote about the company twice this year and have been following its current goings-on with interest. For much of the year, THQ has been struggling to keep its head above water despite an over-investment in the uDraw game accessory and some games not quite hitting their mark. They had to cancel a Warhammer 40k MMO that had been in development for years, and despite hopes to use the already-developed content in a single-player game there has been no further word on any 40k properties. Massive layoffs have affected THQ-owned studios, and I wasn't alone in thinking that the company might not survive. THQ recently filed for Chapter 11 bankruptcy and is being purchased in large part by the Clearlake Capital Group, the firm that turned Buy.com around a few years back.
So that's it... let's all say goodbye to 2012 and watch in anticipation of what 2013 will bring. May all of your investments be profitable, and may all of you have a truly excellent year.
Croaxleigh has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend LeapFrog Enterprises. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!