Eyet Blogs: innovation index fund

Showing posts with label innovation index fund. Show all posts

Sunday, November 9, 2008

Calls and Messages from Sanjay Dalal - Innovation Index Group

Dear Friends:

It has come to our attention that calls or messages were/are placed using the cell or office phone numbers of Innovation Index Group - numbers 949-466-8218 or 949-852-3534 (this may have been happening for some time now). We have contacted AT&T for the same, and they have taken some steps so that this should not occur again. Should you receive anonymous calls or messages from Sanjay Dalal's cell phone or office phone of Innovation Index Group, please kindly report this to us so that we can isolate and correct this problem. Suffice it to say, we apologize for the inconvenience caused due to these spurious calls and messages.

Sincere regards,
Sanjay Dalal
President & Managing Director
Innovation Index Group, Inc.

2600 Michelson Drive, Suite 1700
Irvine, CA 92612
Main: 949-852-3534
Cell: 949-466-8218
Fax: 949-861-9320

Active Member of the Irvine Chamber of Commerce
Active Member of Dean's Leadership Circle, The Paul Merage Business School, UC Irvine
Active Member of American Association of Individual Investors

Past performance does not guarantee future results. Refer to Innovation Index Fund Prospects for full details

Thursday, November 6, 2008

Proctor and Gamble - P&G Innovating and Growing Strong in a Tough Economy

Did you know that Proctor and Gamble - P&G makes all these cool products below that you use everyday in your house?

You betcha... from Duracell and Gillette to Crest, Charmin to Tide, Bounty to Iams - P&G is the world's largest consumer goods company. As a matter of fact, "three billion times a day, P&G brands touch the lives of people around the world." P&G has a bigger mission that they are trying to fulfill: "Provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come."

P&G is one of the Top 20 innovators of the Innovation Index.

P&G stock is doing relatively well compared to its peers and the major indexes. Here is a snapshot of how well P&G is holding up - only down a few percentage points in 1 year, whereas the markets are down more than 30 points:

Why is P&G doing so well?

One answer: Innovation. Innovation driving new business, innovation driving growth, innovative leadership by the CEO of P&G A.G. Lafley. Back in February 2008, I had talked about how P&G is a Smart Long Term Buy in a Turbulent Market. IIG has stayed long with P&G througout the year, and has been opportunistically adding positions in P&G as well. Another fact that most investors may not know about: Barclays Global Investors and Berkshire Hathaway (Warren Buffett's company) are the top two institutional holders of P&G.

How did P&G do in the latest quarter?

P&G announced net sales growth of nine percent for the July - September quarter to $22.0 billion. Organic sales were up five percent, delivering at the mid-point of the Company's four to six percent target range. Sales growth was led by strong growth in the Beauty, Fabric Care & Home Care and Baby Care & Family Care segments. Diluted net earnings per share increased 12 percent to $1.03 for the quarter.

"This quarter was yet another example of the strength of P&G's balanced brand and geographic portfolio," said Chairman of the Board and Chief Executive Officer A.G. Lafley. "We continue focusing on leading innovation and improving productivity to deliver superior consumer and shareholder value. This focus on delighting consumers with trusted household and personal care products that consumers purchase weekly and use daily gives me continuing confidence P&G will deliver target growth over the long term, even in a challenging economic environment."

What is sexy, new and exciting that P&G is innovating?

P&G recently introduced Cascade Complete All-in-1 ActionPacs.

Cascade Complete All-in-1 ActionPacs "give you the confidence of a job done right. It breaks down, dissolves, and rinses away tough food particles without the need to pre-wash."

Here is what one highly satisfied P&G customer had to say about All-in-1 ActionPacs:

OMG this is the most amazing product

"I have an older dishwasher that came with the apartment I live in. You had to completely wash the dishes before putting them in the dishwasher. I was basically using it to drain the dishes. I saw this on T.V. and went to walmart and got it. All I can say is it is almost magical the way it cleans. I tested it on several hard to wash dishes, dried oatmeal, dried rice krispy cereal and my stainless steel pots and everything came out clean, no stuck on food, no hard water residue. thank you! thank you! thank you! what a time saver. I am disabled and one of the hardest things to do is standing over the sink washing dishes."
By beadjeannie. Reviewer from Fresno, CA August 14, 2008

Bottomline:

P&G is a great company with great leadership and employees, and highly satisfied customers. P&G will be around for the next 100 years. IIG - Innovation Index Group is long on P&G, and believes that P&G provides attractive buying opportunity at current price points. We believe that P&G will continue to grow another 10% to 15% even in this economy because of the breadth of its products, creativity and innovation, global marketshare, and delighted customers who will not buy another brand.

Innovation Index Reports

Introducing The Innovation Index
Annual Report 2007 - The Innovation Index gains 66%
Measuring Business Innovation Success
Innovation Index Group BUY Recommendations
Q1 2008 Report - Innovation Index ahead of S&P 500
Q2 2008 Report - Top Innovators Deliver
The Innovation Index Fund FAQ
Top 50 Innovative Companies in the world
Annual Report - Chapter One - Total Innovation Activity
Annual Report - Chapter Two - The Top Innovator
Annual Report - Chapter Three - The Innovation Insights
Innovation and Stock Performance Correlation
Future earnings guidance, A leading indicator
Smart Investing In Tough Economic Times
To Sell Or Not To Sell - You Decide
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies

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 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

Thursday, October 23, 2008

Innovator Apple grows strong on surging iPhone demand

Apple profits are up 26% on iPhone boom. Apple shares were up 14% in after hours after Apple announced the earnings report. IIG is in excellent shape with Apple!

The best part of Apple earnings: CEO Steve Jobs attended the earnings call (which is quite rare), and had this to say:

Earnings Call: Jobs Says iPhone Revs Total $4.6B, Making Apple The Third-Largest Handset Maker

Apple (NasdaqGS: AAPL - News) CEO Steve Jobs made a special guest appearance on the company's earnings call to brag about the iPhone's stellar fourth-quarter performance, and to give his two-cents on how the consumer-electronics and computer company will be affected by the economic crisis as we head into the holiday shopping season. First, Apple's CFO Peter Oppenheimer explained Apple's new practice going forward of reporting non-GAAP financial results. Because the iPhone and Apple TV may provide free updates in the future, they are forced to spread out revenues for the devices over their lifetimes. Going forward, Apple will also report a non-GAAP financial measure that allows people to see how well the iPhone and Apple sales are currently doing. Under this new form of reporting, Oppenheimer said adjusted sales totaled $11.7 billion, or about $3.8 billion higher than its reported revenue, and adjusted net income was $2.4 billion, jumping by $1.3 billion than reported net income. "We believe this adds transparency to our business, and is helpful to you." Oppenheimer said because of the uncertainty in the market, they are going to be prudent in predicting results for the September quarter. He said Apple is targeting revenue of $9 to $10 billion and earnings per share between $1.06 and $1.35.

In a rare appearance, Steve Jobs joined the conference call to provide his outlook on the economy and detail the iPhone's Q4 performance. Jobs: "There's some remarkable things happening at Apple, but now it's all being done in front of the back drop of the economic global slowdown." Notes from the call, as reported by PaidContent.org :

-- On iPhone growth: Using the non-GAAP figures, Jobs said in the past quarter, the iPhone business has grown to $4.6 billion, representing 39 percent of Apple's overall revenues. "Clearly, it's too big for Apple or investors to ignore. The non-GAAP results are truly stunning." He said adjusted sales for the quarter are 48 percent higher than GAAP sales, and adjusted net income is 115 percent higher than reported net income. "It's more than double than reported net income...If this isn't stunning than I don't know what is, and it's all because of the success of the iPhone 3G."

-- On volume: Jobs said by selling 6.9 million iPhones during the quarter, Apple was able to beat RIM (NasdaqGS: RIMM - News), which sold 6.1 million Blackberry devices. "Apple outsold RIM last quarter. This is a milestone," considering Apple has only been in the market for 15 months.

-- Ranking by revenues: Jobs now claims that by revenues, Apple is the third largest mobile phone supplier in the world. Nokia (NYSE: NOK - News), is No. 1 at $12.7 billion; Samsung is No. 2 at $5.98 billion; Apple is No. 3 at $4.6 billion; Sony (NYSE: SNE - News) Ericsson (NasdaqGS: ERIC - News) is No. 4 at $4.2 billion; LG (SEO: 066570), No. 5, at $3.4 billion; Motorola (NYSE: MOT - News), No. 6, at $3.2 billion and RIM, No. 7, at $2.1 billion. "It's pretty amazing," but Jobs cautioned that they were able to sell that many by increasing the number of countries to 51 from 6, and that it's unclear if they can sustain that pace.

-- On the App Store: Jobs said tomorrow they will achieve the 200 millionth download from the App store after being available for only 102 days. "This is one area where we have completely changed the value proposition for mobile devices...We've never seen anything like this." Today, the App store has roughly 5,500 apps, which are being distributed in 62 countries. "Competitors are scrambling to copy our app store."

-- On the economy: Jobs told analysts and press on the call that they believe they will do fine because they have have good customers, good products, good employees, and $25 billion in cash and zero debt. Jobs: We will increase our R&D investments because they created some of the best products in the last downturn. "It is an extraordinary opportunity for companies that have the cash."

Apple shipped 2,611,000 Macintosh(R) computers during the quarter, representing 21 percent unit growth and 17 percent revenue growth over the year-ago quarter. The Company sold 11,052,000 iPods during the quarter, representing eight percent unit growth and three percent revenue growth over the year-ago quarter. Quarterly iPhone units sold were 6,892,000 compared to 1,119,000 in the year-ago-quarter.

Bottomline:
Apple revenue are up 27% and earnings are up 27% from prior year. Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter's revenue. Traditionally, the last quarter of the year is Apple's best quarter. Considering the current economic downturn, even with a 20% conservative revenue and earnings growth, Apple will deliver $11.5 billion in revenue, and $1.89 billion in earnings; however, Apple is only providing guidance of $9 billion to $10 billion in revenue, and a broad range in earnings. Apple is definitely "low-balling" the guidance because of the current economy. Apple iPhone is a money making machine, and the iPhone will have even a greater impact on the earnings and revenue for the next quarter owing to Apple's accounting. Expect Apple to deliver another strong quarter, unless the economy completely unbuckles. Innovation Index Group has a BUY rating on Apple, and has a 12 month price target in the range of $160 to $190.

Innovation Index Reports

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 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

Innovator Google is still growing strong

Google delivered big this week!! And so did IBM earlier in the week. Apple is next and P&G to follow... our innovators are growing strong in tough economy. When the going gets tough, the tough get going! Google shares were up after earnings release!!

In a separate story, Warren Buffett came out telling everyone to BUY for the long-term:

Buffett's optimism is based primarily on the following:

"Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors."
Cash is trash. "Today people who hold cash equivalents feel comfortable," he writes. "They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value."

Here is an analysis on Google and IBM:

Google Inc., owner of the most popular Internet search engine, advanced in Nasdaq trading after reporting profit that topped analysts' estimates, saying customers are still buying Web ads even as the economy slows. (Bloomberg reference)

While advertisers of home and auto loans cut back, makers of apparel and appliances kept spending, Chief Financial Officer Patrick Pichette said. Consumers continue to shop online, he said, with clicks on ads climbing 18 percent, near the previous quarter's 19 percent growth.

Google results, combined with better-than-anticipated reports from International Business Machines Corp. cheered investors after a decline in technology shares this month. Google showed resilience in a weakening economy, said Mark May, an analyst at Needham & Co. in New York.

``This really shows we need to give them the benefit of the doubt,'' said May, who recommends buying the shares (of Google). ``They should be able to weather the storm fairly well.''

Google's third-quarter net income rose 26 percent to $1.35 billion, or $4.24 a share, from $1.07 billion, or $3.38, a year earlier. Leaving out costs such as stock-based compensation, profit was $4.92 a share, beating the $4.75 average estimate of analysts in a Bloomberg survey.

Google, based in Mountain View, California, rose $18.03, or 5.1 percent, to $371.05 on the Nasdaq Stock Market at 9:50 a.m. New York time, after earlier reaching $378.97. The shares had dropped 49 percent this year before today.

Advertising Shift

Advertisers are cutting back on TV and print media spending in favor of ads that run alongside search listings. The Internet will account for 8.7 percent of the $284 billion in U.S. ad spending this year, up from 7.2 percent in 2007, according to Barclays Capital.

Excluding revenue passed on to partner sites, Google's sales expanded to $4.04 billion last quarter. Total revenue climbed 31 percent to $5.54 billion.

At least eight analysts had reduced their estimates for Google's third quarter this month after the global credit crisis erupted. That made it easier for the company to beat the average profit estimates yesterday.

``This was exactly the kind of shot in the arm that investors need,'' said Jeff Lindsay, an analyst with Sanford C. Bernstein & Co. in New York. ``People lost a lot of faith in the Internet, but this is exactly what the doctor ordered.''

New Contracts

IBM, based in Armonk, New York, said yesterday it signed $12.7 billion in contracts last quarter, topping the estimate of as much as $11 billion from Cowen & Co. analyst Louis Miscioscia. Winning contracts with the Royal Dutch Navy and Bristol-Myers Squibb Co. boosted the total.

``Tech is going to continue to be challenged for a period of time,'' Miscioscia, who has a neutral rating on IBM shares, said in an interview. ``To put this in perspective, IBM is up $2 after market, not $10, after falling about $20 since Oct. 1.''

Google handled 63 percent of U.S. online searches in August, double the market share of Yahoo! Inc. and Microsoft Corp. combined. That dominance has helped the company command higher prices for ads, according to Yahoo, which is awaiting government approval of an agreement to let Google sell some ads on its sites.

Cutting Back

Still, Google has reduced expenses by slowing its hiring rate and spending less on travel and events, said co-founder Sergey Brin.

``We don't know exactly what the future holds. We've taken a conservative approach,'' Brin said in an interview. ``We view this as an opportunity to refine our company and sharpen it.''

Capital expenditures fell to $452 million, down 18 percent from a year earlier, as Google made more efficient use of its computing centers, Brin said. He said he couldn't forecast whether the costs would continue to fall.

The credit crisis may cost the Internet ad market $6.7 billion in lost sales through 2010, according to Collins Stewart Plc. Big and small businesses, from General Motors Corp. to Simplexity LLC, are reducing ad spending plans, while some financial companies, such as Wachovia Corp., have disappeared.

Slower Growth?

The reductions will push down growth in U.S. Internet ad spending to less than 20 percent next year for the first time since 2002, said Sandeep Aggarwal, a Collins Stewart analyst in San Francisco. Advertisers will scale back spending on newspapers and broadcast TV networks, his firm said this month.

``Advertisers stay with the Internet because it's the way to reach the key younger demographic and that's what advertisers are really after,'' Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC, said in an interview from Bedford Hills, New York.

Google, which gets almost all its revenue from Internet searches, is developing ways to advertise with images and video. The company struck a deal this month to show full-length programs from CBS Corp. on its YouTube site, splitting ad revenue with the network.

``The economic situation is so fluid that we're all sort of in uncharted territory,'' Chief Executive Officer Eric Schmidt said yesterday on a conference call. ``We've always been in this for the long term, and we believe that's even more important today than ever.''

Bottomline:
Google perhaps has the best business model - best of both worlds - when times are tough, and the economy is recessionary, advertisers market on Google and other search engines because they offer better value, better tracking and tighter budget controls. On the other hand, when the economy does improve, more advertisers will market more on Google because they simply have more money to spend. The only question is the rate of growth. But if Google can maintain 20% or better earnings and revenue growth in these trying times, this is simply remarkable. Innovation Index Group is long on Google, and is setting a revised target of $500 in 12 months.

Innovation Index Reports

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

References:

Bloomberg story reported by: Crayton Harrison in Dallas at tharrison5@bloomberg.net; Lauren Berry in New York at lberry4@bloomberg.net

Thursday, October 16, 2008

Top Innovators Weathering the Financial Storm

HEWLETT-PACKARD

only FOR WOMEN: Fashion designer Vivienne Tam flanked by President (PSG), Hewlett-Packard India, Ravi Swaminathan (left), and Senior Vice-President Global Marketing, Hewlett Packard, Satjiv S. Chahil

Hewlett-Packard unveiled four new laptops, including a special edition stylish notebook PC designed by U.S.-based renowned fashion designer Vivienne Tam. HP has about 33 percent market share in India's laptop segment.

Addressing a press conference here, HP's Senior Vice-President (Global Marketing) of Personal Systems Group (PSG) Satjiv S. Chahil said: "We continuously work to ensure that our HP Pavilion line appeals to new markets and segments. Vivienne's fresh and authentic design speaks to an intrinsic part of a digital lifestyle-personal expression." According to HP India's President (PSG) Ravi Swaminathan, the company plans to strengthen its market leadership position with an aggressive 'go-to-market' strategy by increasing its retail footprint across 650 cities and expanding retail partner network to over 10,000 by this year-end.

HP Vice President in an interview today on CNBC indicated that HP PC business remains robust, and touted Gartner report that shows growth of at least 15%.

HP shares are down 23.5% year to date. Innovation Index Group has a BUY recommendation on HP with a 12 month price target of $50 to $60.

PROCTOR & GAMBLE

Mr. A.G. Lafley, CEO of P&G, said: "The reason P&G has grown so consistently for so long is that we're a company that sticks to the fundamentals. We build brands that improve consumers' lives. We deliver superior value day in and day out. We manage cash and costs with unrelenting discipline. And we invest in innovation as the primary driver of profitable organic sales growth.

"While the economic environment remains volatile and uncertain, I am confident that P&G can and will continue to prosper over the long term. We are committed to ensuring P&G will continue to be a company you can count on."

P&G's net sales for the fiscal year ended June 30, 2008 increased nine percent to $83.5 billion, with organic sales up five percent - in the middle of the Company's four to six percent target range. Diluted earnings per share were $3.64, up 20 percent - or double the Company's ten percent target. P&G's free cash flow was $13.0 billion for the fiscal year, or 106 percent of net earnings - well above the Company's 90 percent goal.

P&G sales have nearly doubled for each of the past three decades - from $10 billion in 1980 to more than $80 billion today with earnings growth increasing from $640 million to $12 billion over the same period. Over the past five years, P&G has delivered 11 percent compound annual total return to shareholders, nine percent over the past ten years, and 16 percent over the past 20 years. The Company's dividends have also increased every year - more than nine percent a year, on average - over the past fifty-two years, and have been paid without interruption since the Company was incorporated 118 years ago. P&G recently announced a 40 cents dividend.

P&G shares are down 15.8% year to date. Innovation Index Group has a BUY recommendation on P&G with a 12 month price target of $75 to $85

APPLE

JP Morgan is upgrading Apple to Overweight from Neutral. Apple's model is far more diverse than previous vintages, and they think the staying power has been underappreciated. With its market share momentum likely intact, Apple in firm's view offers strong relative downside protection to the looming earnings reset that they expect to impact IT Hardware companies in coming weeks and again early next year.

- Diverse model provides staying power. There has been considerable investor concern lately over the Apple model losing steam, particularly if the consumer vertical rolls over. JPM estimates that the company's total model exposure is about 70-75% consumer, but they think that Apple's brand and market share momentum offer meaningful buffers to potential macro-driven pressures on the consumer.

- Retail expansion could sustain share gains and international momentum. JPM thinks a major force behind Apple's growth story will be its diversifying revenue streams. They expect Apple's penetration of the international markets to be measured in years and supported by the increasing build-out of the retail stores overseas.

- iPhone could lead to the enterprise or other content-rich devices. Firm thinks the iPhone could be a stepping stone to penetrating the enterprise. Also, they could envision the iPhone pushing Apple deeper into the set-top box market as the convergence of voice, web, data, and content continues.

- Expect numbers to come down across the sector, but Apple likely has a backstop beyond the first round. For Apple, they are revising their below-consensus revenue and EPS estimates. Looking to fiscal 2009, revenue and EPS estimates are $36.98 billion and $5.27, versus the Street consensus of $40.26 billion and $6.02.

- Apple trades at 18.8x JPM's calendar 2009 EPS estimate, versus the peer group average of 11.1x. With macro pressures showing no signs of dissipating, they believe it is time to play defense, and they think Apple can avoid having a major problem with the "E" in the price-to-earnings multiple moving through the coming year. Firm expects the company's model to limit a series of major earnings cuts from unfolding in coming quarters, and they think this should support a valuation gap in Apple's favor.

Apple announced new aluminum shell, more powerful laptops on October 14, and reduced the price on updated laptops to under $1,000. Apple is poised to see a robust growth in its sale of notebooks during the holiday season owing to competitive pricing and better features.

Apple shares are down 48.6% year to date. Innovation Index Group has a BUY rating on Apple, and is now updating the 12 month price target in the range of $160 to $190.

IBM

JPMorgan upgrades IBM as a stock that is a 'sturdy ship' in rough economic waters

A JPMorgan analyst upgraded International Business Machines Corp. saying the company's diverse and steady revenue streams make the stock a "sturdy ship" in the worsening economic environment, the firm said Wednesday.

Mark Moskowitz raised his rating to "Overweight" from "Neutral" because IBM has diverse revenue sources that offer relative stability. He also said at least half of the company's revenue comes from annual payments on long-term services and software contracts.

IBM represents a "flight to quality" for investors" due to its broad services, hardware and software reach," the analyst wrote. IBM 3Q profits jumped 20% from last year in large part due to services contracts.

IBM shares are down 15.3% year to date. Innovation Index Group has a BUY recommendation on IBM with a 12 month price target of $125 to $150.

These four innovators present attractive buying opportunity at the current price points.

Innovation Index Reports

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

Monday, October 13, 2008

U.S. Stock Markets Make Historical Jump

Dow Jones gains 936.42 points in one day, the biggest single day jump, a rise of 11.08%. The S&P 500 climbs 104.10 points, or 11.6%, to 1,003.32, the S&P's largest daily point jump. The Nasdaq Composite amasses 194.74 points, or 11.8%, to 1,844.25, the third-greatest percentage rise.

The Innovation Index Fund gains 30% in one day, the largest percentage increase in one day.

What is in store for tomorrow? Can the markets continue this rally?

Our outlook is that the U.S. stock markets will rebound further post November elections and post November options expiration. Whether they would finish the year in the positive remains to be seen.

Innovation Index Reports

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

Sunday, October 12, 2008

Statement of IIG Financial Condition - Innovation Index Group

Dear Current and Prospective IIG Investors:

Some of you may have thought about the financial condition of IIG (Innovation Index Group) and my personal financial condition, especially in this current economic climate. Rest assured, I have worked hard for 10 years in Silicon Valley, and through the options in various company stocks that I worked at and that we gained, and smart investments in the stock markets and through the equity we built in our Fremont home that we sold last year, we have amassed enough savings to last us another five to ten years at the very least. We also bought a house this summer in Turtle Rock. We are blessed and lucky to be in this position. Having said that, it behooves us to work hard to continue this growth and not just deplete our savings, and to that end, I am planning to become a CFP next year and open a full-blown independent investment practice, and my wife has also begun working full-time. We have done well, and have no plans to retire in our forties... perhaps in our fifties ;-) And on a separate note, we are mentally healthy too, and plan to stay that way for the rest of our lives ;-) We do many things to relax and enjoy each weekend and during the week.

So, if you are considering investing in the stock market or real estate, please consider IIG - Innovation Index Group and REIG - Real Estate Investing Group (newly launched) as your consistent partner for steady growth over the next five to ten years and beyond. Invest with Confidence and Grow your Wealth...

I am thankful and grateful to my partners in IIG and REIG, and all our friends, family members, and partners for your continuous support and belief.

Sincere regards,
Sanjay Dalal
President & Managing Director
October 12, 2008

*Past performance does not guarantee future results. Refer to Innovation Index Fund and Real Estate Investing Group Prospectus for full details

Tuesday, July 29, 2008

Top Innovators Deliver Solid Second Quarter Earnings

The Top Innovators of the Innovation Index are having better to excellent second quarter results in 2008. These top innovators' 2008 second quarterly earnings increased 5% to 43% over 2007 second quarter earnings. This is fantastic growth!! In short, these innovators are growing even in these trying economic conditions. When the going gets tough, the tough gets going.

Their quarterly stock performance did not quite correlate with their quarterly earnings performance though. The stock markets are discounting these solid innovators owing to the general malaise in the U.S. economy, increase in gasoline and oil prices, increase in inflation, and the meltdown of the financials sector and the housing market.

Innovation Index Group believes that these innovators will reward the patient, long-term investors focused on fundamentals of smart investing. Innovation Index Group further believes that these innovators present an attractive buying opportunity at these discounted prices. How successful are some of their new innovations? Check our latest industry article that talks about measuring business innovation success.

The Top 20 Innovators	Mar 31, 2008	June 30, 2008	Quarterly
APPLE INC	143.50	167.44	17%
AMERICA MOVIL	63.69	52.75	-17%
AMAZON INC	71.30	73.33	3%
BEST BUY INC	41.56	39.60	-5%
COSTCO WHSL CORP	64.97	70.14	8%
CISCO SYS INC	24.09	23.26	-3%
EBAY INC	29.84	27.33	-8%
GENERAL ELECTRIC CO	37.01	26.69	-28%
GOOGLE INC	440.47	526.42	20%
HEWLETT PACKARD CO	45.66	44.21	-3%
IBM	115.14	118.53	3%
INTEL CORP	21.18	21.48	1%
MCDONALDS CORP	55.77	56.22	1%
3M CO	79.15	69.59	-12%
MERCK & CO INC	37.95	37.69	-1%
MICROSOFT CORP	28.38	27.51	-3%
NIKE INC	68.00	59.61	-12%
PROCTER & GAMBLE CO	70.07	60.81	-13%
RESEARCH IN MOTION LTD	112.23	116.90	4%
AT&T INC	38.30	33.69	-12%

S & P 500	1,322.70	1,280.00	-3.23%
NASDAQ	2,279.10	2,292.98	0.61%
Dow Jones	12,262.89	11,350.01	-7.44%
© Innovation Index Group, Inc. http://www.InnovationIndexGroup.com

Second Quarter Leaders

Google led all innovators with 20% jump in stock performance in the second quarter – Google is perhaps the best internet bell weather. Apple had an equally impressive 17% increase thanks in large part due to the growth in Mac business, solid performance of the iPod business, and new revenue growth from the iPhone 3G. There were six other innovators with single digit increases in stock performance. IBM leads all innovators in 2008 with a 10% jump in stock performance.

Second Quarter Laggards

GE led all innovators with 28% drop in quarterly stock performance – GE’s first quarter earnings miss still reverberates; although GE delivered a good second quarter earnings. America Movil dropped 17%, followed by Proctor & Gamble with 13%. Overall, twelve innovators finished in the red in the second quarter.

Top Innovators Earnings Update

Google Inc.'s (GOOG) fiscal second-quarter profit rose to $1.25 billion, or $3.92 a share, from $925.1 million, or $2.93 a share in the same period a year earlier, an increase of 35%. Google reported revenues of $5.37 billion for the second quarter 2008, representing a 39% increase over second quarter 2007 revenues of $3.87 billion. "Strong international growth as well as sustained traffic increases on Google's web properties propelled us to another strong quarter, despite a more challenging economic environment," said Eric Schmidt, CEO of Google.

IBM Corp. (IBM) reported a second-quarter profit of $2.77 billion, or $1.98 a share, up from $2.26 billion, or $1.55 a share in the same period a year ago, an increase of 23%. Revenue rose to $26.82 billion from last year's sales of $23.8 billion, an increase of 13%. IBM's Chief Executive Sam Palmisano said the company was sticking by its 2008 earnings estimate of $8.75 a share, and its long-term forecast of a profit of $10 to $11 a share for its 2010 fiscal year.

Microsoft Corp. (MSFT) reported fourth-quarter earnings of $4.3 billion, or 46 cents a share, compared to earnings of $3 billion, or 31 cents a share, for the same period last year, an increase of 43%. Quarterly Revenue grew to $15.8 billion from $13.4 billion, an increase of 18%. Chris Liddell, chief financial officer at Microsoft said: "Looking forward, despite difficult economic conditions, we will build upon the momentum exiting fiscal year 2008 and expect to deliver another year of double-digit revenue and earnings growth in fiscal year 2009."

eBay Inc. (EBAY) reported second quarter revenue of $2.20 billion, up $361 million from the same period last year, an increase of 20%. Net income was $460 million, or $0.35 per diluted share, and non-GAAP net income was $568 million, or $0.43 per diluted share, an increase of 20%. "This was a strong quarter and we are very pleased with the performance of the portfolio, particularly with the growth generated by PayPal," said eBay Inc. President and CEO John Donahoe. "We're delivering strong results in a tough economic environment."

Intel Corp.'s (INTC) second-quarter profit jumped 25 percent owing to strong sale of laptops. Global PC demand is growing despite the weakness in U.S. economy. CEO Paul Otellini said demand for Intel's chips remains strong globally. Three-quarters of Intel's business is outside the U.S. Intel earned $1.6 billion, or 28 cents per share, in the quarter, 3 cents above analyst's forecasts and well above the $1.28 billion, or 22 cents per share, figure a year ago.

The Procter & Gamble Company (PG) confirmed previously announced sales and earnings guidance for the April to June quarter of fiscal year 2007/08. The company continues to expect sales growth for the quarter of 8 percent to 10 percent, organic sales growth in line with previous guidance and diluted earnings per share of $0.76 to $0.78.

GE (GE) second quarter 2008 earnings from continuing operations were $5.4 billion with $.54 per share, which was flat year-over-year from second quarter 2007. Second quarter revenues from continuing operations were $46.9 billion, up 11%. "Led by double-digit segment profit growth in our industrial businesses and a strong relative performance in our financial services businesses, we delivered a solid quarter in a volatile environment," GE Chairman and CEO Jeff Immelt said, "Even with all this uncertainty, we still see growth opportunities ahead."

Apple (AAPL) net income surged 31% over the year-ago period. The company reported net income of $1.07 billion, or $1.19 per share, on sales of $7.5 billion, compared with net income of $818 million, or 92 cents per share, on sales of $5.4 billion for the same period a year ago. Sales surged 39%. Apple already sold over 1 million new iPhones in the first weekend of iPhone 3G launch, and Apple CFO indicated that the current quarter will be the best quarter for iPhone sales in the conference call. Further, Apple CFO also hinted of Apple introducing a major new product in the coming quarter.

America Movil (AMX), the largest cell-phone operator in Latin America, posted a 25 percent rise in second-quarter net profit on Monday, beating forecasts after adding 6.1 million new mobile clients. America Movil said April-June net profit was a better-than-expected $1.7 billion. America Movil surprised everyone by the net increase in new mobile clients.

Merck (MRK) said profit rose to $1.77 billion, or 82 cents per share, from $1.68 billion, or 77 cents per share, during the prior-year period, an increase of 5%. Sales fell 1 percent to $6.05 billion from $6.11 billion. Merck said it earned 86 cents per share, beating analysts’ predictions.

McDonald's (MCD) earned $1.19 billion in the second quarter, including a gain from the sale of its stake in sandwich chain Pret A Manger. A year earlier, McDonald's had a loss of $711.7 million stemming from charges on the sale of its Latin America and Caribbean businesses. Revenue rose 4 percent to $6.08 billion from $5.84 billion a year ago, beating analysts' predictions. In the second quarter, McDonald's reported same-store sales increases every month, the key indicator for growth. For June, the company said same-store sales rose 5.6 percent for the month overall and jumped 3.8 percent in the U.S. McDonald's attributes the sales growth to new innovations such as Breakfast Chicken, addition of chicken sandwich for lunch, and espresso-based coffee drinks.

AT&T Inc. (T) said Wednesday second-quarter profit jumped 30% as the phone giant gained a net 1.3 million wireless customers and reduced expenses. In the second quarter, AT&T delivered net income of $3.77 billion, or 63 cents a share. That was up from $2.90 billion, or 47 cents a share, in the 2007 second quarter, an increase of 30%. Total Revenue rose 4.7% to $30.87 billion from $29.48 billion, with a nearly 16% increase in wireless sales countering an 8.3% drop in AT&T's voice-calling business. Profits met Wall Street expectations. AT&T gained 170,000 customers for its new U-Verse fiber-TV service to finish with 549,000 in service -- more than halfway toward its goal of 1 million by year-end. The company hopes its new TV service will keep customers from defecting to cable and lure some old subscribers back. "Scaling U-Verse is a major initiative for us. Penetration is growing nicely," Chief Financial Officer Rick Lindner said in a conference call with analysts.

Amazon.com (AMZN) net sales increased 41% to $4.06 billion in the second quarter, compared with $2.89 billion in second quarter 2007. Operating income increased 86% to $217 million in the second quarter compared with $116 million in second quarter 2007. Worldwide Media sales grew 31% to $2.41 billion in second quarter 2008, compared with $1.83 billion in second quarter 2007. Worldwide Electronics & Other General Merchandise sales grew 58% to $1.53 billion in second quarter 2008, compared with $0.97 billion in second quarter 2007. "Customers continue to take advantage of our low prices, free shipping and Amazon Prime," said Jeff Bezos, founder and CEO of Amazon.com. "Amazon Prime membership costs less than a tank of gas - more and more customers are joining the program and enjoying its benefits."

3M (MMM) second-quarter sales grew to $6.7 billion, an increase of 9.7 percent over second quarter of 2007. Net income was $945 million, or $1.33 per share, versus $917 million, or $1.25 per share in the corresponding period last year. "The strength of 3M's global portfolio was evident in the second quarter," said George W. Buckley, 3M chairman, president and CEO. "3M's three largest businesses, Industrial and Transportation, Health Care and Safety, Security and Protection Services, grew at double-digit rates."

Bottomline:

The Top Innovators are growing in 2008! You read it right! They are definitely doing better than 2007. These innovators are not impacted by the tough U.S. economy. The main reason: New innovations driving growth and creating new business, growth in global revenue owing to better global strategy and market penetration, and operational excellence throughout the enterprise in a tight market. Innovation Index Group maintains a BUY rating on these top innovators of the Innovation Index.

2008 Outlook

Innovation Index Group remains conservatively bullish for Q4, 2008. There are many positives for the second half of 2008 – the top innovators have already delivered good to strong results so far and traditionally have their best quarters in the second half of the year; the stock markets typically rally in the election year in the fourth quarter, and we believe that the stock markets have bottomed out; finally, all the initiatives led by the Federal Reserve, IRS, and the U.S. Treasury will begin to show net positive effects on the economy and the markets.

About Innovation Index Group:

Innovation Index Group, Inc. is a new research & management company focused on systematically identifying, tracking, researching and reporting on the most innovative publicly traded companies in North America – collectively called the Innovation Index. Over the past six years, the Innovation Index would have generated a gross average annual return of 40% based on historical model.*

The Innovation Index Reports:
Introducing The Innovation Index - Learn about the Innovation Index
Innovation Index Group BUY Recommendations - 2008 BUY Recommendations and Estimates
Q1 2008 Report - Innovation Index ahead of S&P 500 - Q1, 2008 Report
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
Measuring Business Innovation Success – How successful is your new innovation?
Future earnings guidance, A leading indicator - Earnings Guidance and Stock Price
Smart Investing In Tough Economic Times - Guide to Prudent, Value Investing
To Sell Or Not To Sell - Long-Term Investing in Turbulent Markets

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. invested in the stocks comprising The Innovation Index.
*Past Performance Does Not Guarantee Future Results

Source:

Innovators Press Releases