The Innovation Index up 6% in 2007 - Weekly Report 02-21-07

The Innovation Index is now up 6% in 2007. S & P 500 was even for the week, and is up 3% in 2007. NASDAQ was up 1% for the week, and is now up 4% for the year, whereas the Dow Jones Index was even for the week, and is now up 3% in 2007. The Innovation Index continues to lead all the major indices.



Yahoo! Inc. (NASDAQ: YHOO) leads the Top 20 Innovators of The Innovation Index in stock performance with 24% gain for the year.

The Innovation Index closed at 73.15 on February 21, 2007, up 3.84 points from the closing price of 69.31 on December 29, 2006.

8 of the Top 20 Innovators showed positive gains, 7 of the Top 20 Innovators dipped in the red, and 5 Innovators were unchanged last week.

Weekly Advances

Apple Inc. (NASDAQ: AAPL) was up 5% in just one week owing to upgrades, upbeat forecasts by analysts for the current quarter, opening of a new store in Florida and agreement with Cisco Systems (NASDAQ: CSCO) about the iPhone trademark. Apple is now up 5% for the year. Wal-Mart Stores (NYSE: WMT) announced solid quarterly results with profits that exceeded the analysts' estimates, including the 2007 outlook. The news sent Wal-Mart's shares up 4% in just one week, and now Wal-Mart is up 8% for the year. Target (NYSE: TGT) also benefited from the announcement, and gained 2% in one week. Target is up an impressive 12% for the year. Yahoo! (NASDAQ: YHOO), Amazon.com (NASDAQ: AMZN) and Research In Motion (NASDAQ: RIMM) were each up 3% for the week. The street is expecting upside from Yahoo!'s Project Panama, and announced innovations such as Yahoo! Pipes only furthers the excitement (although Yahoo! search share slipped last month to Google). Research In Motion's latest Blackberry innovation is helping the recent surge in stock performance. RIMM is now up 11% for the year.

Weekly Declines

There were no significant declines last week. HP (NYSE: HPQ) had another solid quarter beating the analyst estimates for both topline revenue and profits; however, the 2007 outlook was deemed conservative by the analysts. HP PC business is doing well, and is gaining significant market share against Dell (NASDAQ: DELL). Yet, HP shares were down 4% in one week due to the projections, and are now even for the year. Dell is now planning to "experiment" with retail. Earlier, when Dell took over Dell's CEO role, I had dwelled on the same point on How Dell can turnaround Dell? Retailing is critical to Dell's future success, and Dell can perhaps emulate the recent success of Blockbuster that offers the best of both worlds in the movie rental business (related story: Blockbuster versus Netflix). Today's consumer wants all the choices, likes simple business model, and appreciates ease of shopping through multiple channels.

Yearly Leaders and Laggards

Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 24% gain for the year. Target (NYSE: TGT) is up 12% for the year owing to the strong retail sector and Target innovations into music and electronics. eBay Inc. (NASDAQ: EBAY) is holding steady at 11% for the year. Starbucks Corporation (NASDAQ: SBUX) shed another 3% last week, and is now down 9% for the year, after posting a solid 18% gain in 2006. Can Starbucks repeat the 2006 performance with the introduction of new innovations in Coffee vending?

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 Movil - (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.

Disclaimer: I invest in the stocks comprising The Innovation Index.