The Innovation Index was flat for the week ending January 31, 2007, and is up 4% in 2007. S & P 500 lost 1% last week. NASDAQ is up 2%, whereas S & P 500 and the Dow Jones Index are each up 1% in 2007. It was another tough week for the Top 20 Innovators – 12 innovators declined last week, only 4 gained some ground, and 4 stayed even.
The Innovation Index closed at 71.86 on January 31, 2007, up 2.48 points from the closing price of 69.38 on December 29, 2006.
Weekly Advances
eBay Inc. (NASDAQ: EBAY) led all Innovators with 8% gain in just one week, and is now up 8% for the year. eBay had a solid quarter, showed strength in the core auction business, and is reaping the benefits of innovations introduced in 2006. eBay is perhaps the dark horse of 2007. Hewlett-Packard (NYSE: HPQ) and IBM - (NYSE: IBM) each gained 2% for the week. Intel Corporation (NYSE: INTC) was up 1% for the week. I posted a story on Intel – The Innovator of the week touting Intel’s recently announced breakthrough innovation. There were no significant gains from other innovators last week.
Weekly Declines
3M Company (NYSE: MMM) dropped 7% last week owing to quarterly results that missed the analyst estimates, and the future outlook that did not really excite the analysts either. 3M is now down 5% for the year. However, this is still early in the year. Look for the seasoned innovator 3M to bounce back before the middle of the year. Microsoft Corporation (NASDAQ: MSFT) hot on the heels of the huge launch of Windows Vista was still down 1% for the week. The investors shrugged off the launch, and are perhaps looking at Microsoft to deliver on the promise of Vista - money, money, money. The key question: how many existing Windows customers will convert to Vista? We will be sure to watch when Microsoft announces next quarter's revenues, in particular existing customers who are moving to Vista.
Yearly Winners
Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 11% stock performance gain for the year. Google (NASDAQ: GOOG) is next with 9% gains for the year; however, as I write this weekly report, Google is down in the last couple of days as the investors reacted less favorably to Google's latest quarterly results. eBay and Target Corporation (NYSE: TGT) are both tied with 8% gains for the year. Look who is on the rise again: Hewlett-Packard (NYSE: HPQ) has almost quietly notched gains of 5% for the year already. HP was tied as The Top Innovator of 2006, and had a huge gain of 45% last year. HP is back again with 5% gain in the first month of the year.
I posted The Innovation Index Annual Report earlier in the year that included three Chapters:
Chapter One - Total Innovation Activity at The Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple 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)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
References:
The Innovation Index
The Innovation Index Annual Report – Chapter One
The Innovation Index Annual Report – Chapter Two
The Innovation Index Annual Report – Chapter Three
Disclaimer: I invest in the stocks comprising The Innovation Index, beginning in 2007.
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