Thursday, December 28, 2006

The Innovation Index Weekly Report

The Innovation Index stayed essentially flat at 73.74 for the week ending December 27, up 11% for the year from 66.36 (click to see the complete Index)



The Innovation Index began the month of December at 74.70, and is now at 73.74, or down about 1% for the month.


Weekly Advances

Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG), Hewlett Packard (NYSE: HPQ), IBM (NYSE: IBM), and Wal-Mart (NYSE: WMT) each gained 1% for the week. HPQ is up 46% for the year, while IBM is on a late rally in December and is now up 20% for the year. HPQ is having an outstanding year in 2006 on the heels of many innovations driving growth. IBM is also coming on strong with solid revenue growth and margins growth for the year. GOOG is up 8% for the year and is poised to return to double-digit growth in 2007 based on their innovation pipeline. WMT is in the black now, up 1% for the year. AMZN is still down 15% for the year, however is recovering from the lows. AMZN is poised to rebound in 2007.

Weekly Declines

Apple (NASDAQ: AAPL), Dell (NASDAQ: DELL), eBay (NASDAQ: EBAY), Intel (NYSE: INTC), Research In Motion (NASDAQ: RIMM), Starbucks (NASDAQ: SBUX), and Target (NYSE: TGT) declined last week. RIMM led the declines with 4% for the week. RIMM has been oscillating the last three weeks between +6% and -6%. RIMM posted excellent quarterly results last week; however, investors are wary of the overall stock appreciation for the year. AAPL also went down 4% last week. AAPL is now down 11% in December, however up 9% for the year. EBAY shed 3% last week, and is now down a whopping 31% for the year. Can EBAY rebound next year? TGT dropped 1% last week, although is up 6% for the year. TGT is bound to benefit from the holiday shopping, and will provide a great start to the New Year. Couple of bell weathers INTC and DELL each lost 1% last week; INTC is down 20% and DELL down 17% for the year. What innovations did INTC and DELL introduce in 2006 that will impact their 2007 growth and lead a rebound?

Weekly Neutrals

3M (NYSE: MMM), Cisco (NASDAQ: CSCO), GE (NYSE: GE), Microsoft (NASDAQ: MSFT), P&G (NYSE: PG), Southwest Airlines (NYSE: LUV) were even for the week. CSCO is on a roll in 2006, up 56% for the year. What important innovations have driven CSCO in the driver's seat again in 2006? Is CSCO gaining market share? GE, MSFT and PG are each showing double-digit percentage growth in stock price for the year.

Yearly Leaders and Laggards

Research In Motion (NASDAQ: RIMM), Cisco Systems (NASDAQ: CSCO) and Hewlett Packard (NYSE: HPQ) are the top three performers on the Innovation Index for the year gaining 94%, 56% and 46% respectively. eBay (NASDAQ: EBAY), Intel (NYSE: INTC) and Dell (NASDAQ: DELL) are the bottom three performers on the Innovation Index for the year losing 31%, 20% and 17% respectively. AMZN has moved upward from the bottom three performers due to the slight rally in December.

I released story on Starbucks (NASDAQ: SBUX) brewing new innovations last week. The story is included below under References section. SBUX is now up 16% for the year. SBUX has had an impressive growth in the last five years, and when the engine is firing on all cylinders, there is no stopping for SBUX in 2007. Expect another 10% or higher growth for SBUX in 2007.

The Innovation Index is poised to end the year with gains around 11% to 12%. This would equal the stock performance of S & P 500 for the year. The Innovation Index is poised to beat the NASDAQ. However, Dow Jones Index appears to hold its lead over the Innovation Index for the year.

The Innovation Index Yearly Report

I am planning to post an annual report of the top 18 Innovators of The Innovation Index during the second week of January, 2007. The report will include insights gained from the top 18 Innovators, top Innovations introduced during 2006, lessons learned, 2007 projections, and observations on Disruptors challenging the top 18 Innovators.

About The Innovation Index

The Innovation Index introduced in December, 2006 is a weighted stock price compilation index of the top 18 Innovators in North America.

The alphabetical list of the top 18 Innovators of The Innovation Index along with their stock ticker symbols are presented below:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
Apple Computer, Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
References:

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