This hasn't been a good year for more than a few publicly traded companies.
From boneheaded decisions to sloppy financials to garden variety investor disinterest, some stocks just haven't shined in 2011 the way that they have in the past.
Thankfully for them, 2012 is a brand new year. I'm going to go over a few stocks that I think will bounce back next year, and I'll even offer up some of the catalysts that will make it happen.
Netflix (Nasdaq: NFLX)
I went to Party City the other day. The Reed Hastings pinatas are on backorder.
As bad as things have gone for Netflix these past few months, the company's not broken. No one is even close to matching the sheer girth of Netflix's streaming catalog, and the stock is priced as if net defections will bleed into 2012 (they won't) and losses will continue beyond the next few negative quarters (they won't).
What are some of the potential catalysts that may turn Netflix around next year? Let's go with stability on the domestic front and global expansion. If that's not enough, what do you think would happen if Netflix began offering brand new streaming titles as a la carte rentals? There are already more than 20 million streaming customers connected to Netflix, largely through Web-tethered home theater systems.
Green Mountain Coffee Roasters (Nasdaq: GMCR)
The company behind the Keurig single-cup brewers and the K-Cup portion packs that keep them going was having a spectacular 2011 until David Einhorn went public with his bearish thesis. The hedge fund rock star's timing was impeccable, as Green Mountain went on to post its first quarterly miss on the bottom line in ages a few weeks later.
Now all that anyone seems to be talking about is the quality of Green Mountain's earnings, its inventory levels, and what it will do late next year when its K-Cup-related patents expire.
Well, let's give Green Mountain some room to impress financially. Starbucks (Nasdaq: SBUX) didn't even begin selling its Keurig K-Cups until last month! However, posting strong financial growth won't be enough to silence the patent concerns.
Green Mountain is set to unveil a new Keurig platform in 2012, one that will naturally start the timer on a new set of patents. The company isn't divulging much about the new brewers, only to say that the new system will be able to make stronger brews. The original machine will continue to be the brewer of choice for the masses, but if this new premium platform really is an evolutionary upgrade it's going to be a major boost for the company. It also wouldn't hurt if the new platform also made espresso and some of the fancier European brews.
Sirius XM Radio (Nasdaq: SIRI)
The satellite radio giant was one of the hottest stocks in 2009, coming through with an encore performance in 2010. It seemed to be off to another bear-scorching year in 2011, but the stock has shed 28% of its value since peaking seven months ago.
Decelerating growth, mixed trends, and an uninspiring launch of Sirius XM 2.0 have weighed on Sirius XM, but those setbacks appear to be overblown.
The first Sirius XM 2.0 radio was a dud, but the next retail model should hit stores in a few weeks, and it does raise the bar. Sirius XM has mentioned that at least one automaker will embrace Sirius XM 2.0 for its in-dash satellite receivers, and that will give the new platform that has access to more channels and broader customization features more visibility.
OpenTable (Nasdaq: OPEN)
The online restaurant reservations leader has shed roughly half of its value this year, and it's not an easy dive to analyze.
It's not as if OpenTable's financials are coming up short. The company has managed to meet and typically beat Wall Street estimates every quarter over the past year. There are fears of cheaper competitors and folks just not eating out in this soft economy, but OpenTable's growth defies the skepticism. The number of North American restaurants on OpenTable climbed 25% over the past year, and the number of reservations secured soared by 42%. In other words, OpenTable is working out even better for its participants.
What really threw OpenTable investors for a loop this year is that it was one of 2010's hot growth stocks, fueled largely by its move to offer Groupon-like prepaid vouchers as an incremental revenue stream. Well, now that we've seen that LivingSocial and Groupon (Nasdaq: GRPN) aren't very profitable, the model's being questioned. OpenTable decided to bow out of this space last month, and the real question now is if its flagship business is strong enough to stand on its own?
Analysts see revenue and earnings climbing 22% and 24%, respectively, next year. Now just imagine how well OpenTable will do if the economy does turn the corner and folks begin dining out again at upscale eateries?
Forgive and remember
I don't just think that these four companies will bounce back next year.
As part of our CAPScall initiative for accountability, I'm initiating a bullish call for on all four of these stocks in Motley Fool CAPS. My rating will rise and fall with the way the stocks move, and I'm perfectly fine with that. In fact, I own two of these companies already.
So go ahead and forgive these four recent underperformers. You may as well profit from the experience by accepting their apologies before everyone else does next year.
Add these stocks to My Watchlist to track news as it breaks.
- Add SIRIUS XM Radio to My Watchlist.
- Add Starbucks to My Watchlist.
- Add OpenTable to My Watchlist.
- Add Netflix to My Watchlist.
- Add Groupon to My Watchlist.
- Add Green Mountain Coffee Roasters to My Watchlist.
