The year is nearing its end, and now's a good opportunity to look at what happened throughout 2012 to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Tempur-Pedic (NYSE:TPX). As a premium mattress maker, Tempur-Pedic relies on a solid economy to support sales. Yet even though the economic recovery slowly improved throughout the year, the gains didn't come fast enough for Tempur-Pedic, which suffered a big plunge early in the year. Read on to find out more about what moved shares of Tempur-Pedic this year.

Stats on Tempur-Pedic

Year-to-date stock return


Market cap

$1.83 billion

Revenue, past 12 months

$1.43 billion

Net Income, past 12 months

$140 million

1-year revenue growth


1-year net income growth


CAPS rating (out of 5)


Source: S&P Capital IQ.

Can Tempur-Pedic finally wake up?
Tempur-Pedic has had problems throughout 2012. In early June, the stock lost about half its value when it said that its full-year earnings would come in almost a third below where analysts had expected, with a corresponding revenue shortfall as well. Then in October, the stock lost nearly a quarter of its value when it cut its 2012 guidance again. International sales have been somewhat of a bright spot at various points during the year, but slow North American sales have definitely held Tempur-Pedic back.

The problems weren't unique to Tempur-Pedic, though. Once-hot 2011 IPO Mattress Firm (NASDAQ:MFRM) has given investors similarly sleepless nights, having lost half its value since its April highs as sales throughout the industry have been disappointing. Select Comfort (NASDAQ:SNBR) has held up somewhat better, although even it has given investors some concerns about future guidance.

Tempur-Pedic has taken advantage of low prices throughout the industry to make some strategic moves. In September, Tempur-Pedic announced that it would buy Sealy (UNKNOWN:ZZ.DL) for $242 million in cash. Including assumption of debt, the total deal price tag rose to about $1.3 billion.

Tempur-Pedic sports a relatively cheap valuation at 11 times forward earnings. For the company to make investors comfortable again, Tempur-Pedic will need to demonstrate it can get back into growth mode as an economic recovery takes firmer hold over the nation.

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Fool contributor Dan Caplinger has no positions in the stocks mentioned above. You can follow him on Twitter, @DanCaplinger. The Motley Fool owns shares of Tempur-Pedic International. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.