Costco Wholesale (NASDAQ: COST) is a Top Innovator at A Great Value
Costco Wholesale Corporation (NASDAQ: COST) is one of the Top 20 Innovators of The Innovation Index. Costco was added to The Innovation Index for 2008. Innovation Index Group rates Costco a Long-term Buy with Q4, 2008 price target of $80. Costco shares are up 1.4% year to date, and beat Dow Jones, NASDAQ and S & P 500 by a good margin.Costco reported net sales of $5.54 billion for the month of April, the four weeks ended May 4, 2008, an increase of 12 percent from $4.94 billion in the same four-week period last year.
For the first thirty-five weeks of its reporting period ended May 4, 2008, the Company reported net sales of $46.88 billion, an increase of 12 percent from $41.90 billion during the similar thirty-five-week period last year.
Comparable sales growth for the four-week and thirty-five-week periods ended May 4, 2008, were as follows:
4 Weeks 35 Weeks -------------- --------------US 7% 5%
International 14% 17%
Total Company 8% 8%
============== ==============
The U.S. comparable sales figure includes, among other things, the effect of gasoline price inflation, with the average sales price per gallon of gasoline up 17% for the four-week month of April, as compared to the year-earlier April. Excluding gasoline price inflation, U.S. comparable sales would have been up 5%. In addition, foreign exchange rates, primarily in Canada, positively impacted international comparable sales results. On a local currency basis, international comparable sales increased 6% in April.
Costco Innovations
Costco has grown its lead in key retail segments by offering great prices, convenience, and "treasure hunt" shopping atmosphere. In 2007, Costco generated $456 million of U.S. Fine Wine sales, racked up $1.9 billion in TV sales, had a growing electronics business, showed substantial increase in diamond business with sales of 105,000 carats, sold over $550 million of Seafood, grew the chicken business from practically nothing to $173 million, provided 27.9 million prescriptions through its pharmacy, sold over 2.4 million pairs of glasses, processed 1.3 billion prints through the One Hour photo service, and sold 69.3 million hotdog and sodas. What are the new innovative growth segments? Costco Gas, Costco Car Wash, Costco.com (online business), Costco Travel and Costco Home. Costco Home promises to provide high-end name brand furnishings for a home at the lowest price. We believe some of these new innovations from Costco will provide 2% to 5% incremental revenue and earnings growth in 2008 and beyond, and potentially grow into higher growth business segments in 2009.
Innovation Index Group rates Costco a Long-term Buy with Q4, 2008 price target of $80.
Costco will be announcing its quarterly earnings on May 29. Innovation Index Group believes that the current valuation of Costco around $70 to $71 a share provides an attractive buying opportunity. Costco will continue its solid double-digit earnings and revenue growth through the rest of 2008.
The Innovation Index Fund Manager, that invests in Costco, is up 6% in 2008. The Top 20 Innovators of The Innovation Index have rebounded well in the 2nd quarter of 2008 to cause The Innovation Index Fund Manager to have positive gain for the year.
Innovation Index Group believes that the U.S. economy will recover significantly in the 2nd half of 2008, and the Top Innovators of The Innovation Index will reward the patient, long-term investor.
Innovation Index Group has BUY recommendations on the Top 20 Innovators of The Innovation Index.
About Innovation Index Group:Innovation Index Group, Inc. is a new investment management company focused on systematically identifying, tracking and investing in the most innovative publicly traded companies in North America – collectively called the Innovation Index. We have developed the Innovation Index Fund, LLC as our first vehicle to invest in the Innovation Index. Over the past six years, the Innovation Index would have generated an annual compounded average gross return of 40% based on historical model.* The Innovation Index returned 66% in 2007, and the Innovation Index Fund Manager is up 10% in 2008.*
Innovation Index Group, Inc. and Innovation Index Fund LLC are registered California Corporations, and member of the Irvine Chamber of Commerce in Orange County. Further, Innovation Index Fund LLC is a private placement investment partnership organized under the California state regulations.
The Innovation Index Reports:
Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index
The Innovation Index closes 2007 at 66% - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance
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Consumer Innovation Best Practices
Creativity And Innovation Best Practices
About The Innovation Index
The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in
The Innovation Index returned 66% in 2007 based on performance model, and would have returned 174% over the previous five years (2002-2006) based on historical model*. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.*
Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)
The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.
Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.*Past Performance Does Not Guarantee Future Results
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