Eyet Blogs: earnings

Showing posts with label earnings. Show all posts

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

Wednesday, June 4, 2008

Innovation Index gains 12.23% in April and May 2008, beats major U.S. indices

	Apr-08	May-08	Total*	YTD
Innovation Index Fund	6.30%	5.58%	12.23%	8%
S&P 500	4.75%	1.07%	5.87%	-6%
Dow Jones	4.54%	-1.42%	3.06%	-7%
Nasdaq	5.87%	4.55%	10.69%	-6%

*Compounded for April and May

Innovation Index Fund had a solid performance jump in April and May 2008. Innovation Index Fund delivered 12.23% compounded return in two months, and handily beat S&P 500 and Dow Jones indices. Overall, the Innovation Index Fund is up 8% in 2008 as of May 31, 2008, whereas the major U.S. indices have lost 6% or 7% in 2008.

Innovation Index Group remains bullish for the 4th quarter of 2008; however, our understanding of the current market conditions lead us to believe that there will be some road bumps along the way. Particularly, during the summer months, the market may tread sideways or even course correct in the interim.

Three factors are critical for a second half turnaround in U.S. economy and its positive impact on the stock markets:

1. Inflation - Gross inflation that includes gas, utilities and food needs to come under control. The consumer will feel the pinch of $4 or higher price per gallon of gas in the interim (yesterday, I filled up at the cost of $4.25 a gallon for gas) and higher cost of basic groceries such as bread, milk and fresh vegetables. Either the consumer will adapt to the higher price of gasoline, or react by reducing gas consumption and thereby decreasing travel. Reducing consumption and decreasing travel will negatively impact the economy. Adaptation to a higher fuel price will either result in replacement of current automobiles to higher mileage hybrids, decrease in discretionary spending elsewhere, utilization of public transport or carpools. This will take time, and neither of these alternatives appear to create a net positive impact on the economy. Finally, higher food prices would not deter the monthly consumption of groceries; however, the consumer will likely spend less money for other necessities or luxuries.

U.S. Federal Reserve Chairman Ben Bernanke said rising long-term inflation expectations were a "significant concern" for policy-makers but dismissed worry a wage-price inflation spiral was developing. "Some indicators of longer-term inflation expectations have risen in recent months, which is a significant concern for the Federal Reserve," Bernanke told graduating students at Harvard University. "We will need to monitor that situation closely."

He described overall inflation as "significantly higher than we would like," the second straight day in which he sounded a warning on inflation, which financial markets took as a firm signal that interest rates are likely on hold for some time.

2. Recession - U.S. employers shed 63,000 jobs in February 2008, the most in five years, 81,000 jobs in March and 20,000 jobs in April. How long will it take for the economy to turnaround and produce meaningful job growth? Would corporations go back to hiring mode in summer months or earlier? Which jobs will be in demand? So far, there are mixed signals on whether the economy is in recession or not, because the US economy actually grew in the first quarter by 0.6%.

Construction lost 61,000 jobs in April, and manufacturing shed 46,000 jobs. Retailers also trimmed payrolls by 27,000 in the face of a pullback in spending by consumers - CNN Money.

But some other sectors that had posted job losses in previous reports rebounded, such as business and professional services, which grew by 39,000 jobs after a loss of 44,000 the previous month. The financial sector, which has lost jobs each of the previous 8 months due to problems in the credit markets, ended that streak with a narrow 3,000 job gain. Unemployment rate actually improved to 5% in April 2008.

3. Housing and Financials - Some analysts call this period the "biggest slump in US housing".

Economist Glen Langan points out, "the unusual focus on subprime has caused the nation to overlook a broader trend regarding the housing sector -- namely, the psychology of the housing market."

"What we're not grasping yet, as a nation, is that even with programs to help people stay in their homes and avoid foreclosure, the public's stance toward the housing market has changed," Langan said. "The psychology of the housing market has changed. And this has little to do with at-risk mortgages. This a psychological shift among middle-income and upper-middle-income homeowners and taxpayers. It looks like they'll be sitting on the fence for a long period of time, and this will delay the housing recovery, hurting the economy in the process."

What's at the root of the psychological shift? Langan said factors that clearly indicate that tougher economic times are here and up ahead (higher oil prices, food prices, job lay-offs and little or no U.S. economic growth) combined with high home inventory levels -- about a 9.5- to 10-month supply at current sales rates -- telegraph to Americans that, unless you live in an oil boom town, median home prices are not going to recover any time soon, "not this year, and probably not in 2009."

According to this Bloomberg story, the number of Americans in danger of losing their homes to foreclosure rose to the highest in almost three decades during the first quarter as borrowers who fell behind on payments were unable to sell their homes.

New foreclosures rose to a seasonally adjusted 0.99 percent of all U.S. home loans, up from 0.83 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. The total inventory of homes in foreclosure increased to 2.47 percent and the delinquency rate, loans with one or more payments overdue, grew to 6.35 percent. All were the highest since 1979, the Washington-based trade group said.

Falling home prices have stalled U.S. real estate sales, making it difficult for people who can't pay their mortgages to sell the properties. The increase in foreclosures was led by states with the biggest price declines over the past two years, said Jay Brinkmann, MBA's vice president of research and economics. California, Florida, Nevada and Arizona accounted for 89 percent of the gain in new foreclosures, he said.

Bottomline:

Inflation needs to be stalled, and then reversed. Recession may last another couple of quarters or more, or may show modest turnaround within the next year. Housing industry may take the longest to recover. The Fed and the government are busy trying to help in all these areas by increasing liquidity in the financial markets, lowering the interest rates, providing rebate checks to consumers and families, and also beginning the work towards strengthening the dollar. The sooner these three elements improve for the American consumer, the better the chances of an economic rebound in the fourth quarter of 2008, and a resulting growth in the stock market.

Innovation Index Group believes that the U.S. economy will recover in the 2nd half of 2008, and the Top Innovators of The Innovation Index will reward the patient, long-term investor. So far, most of the top innovators have delivered solid earnings during the first quarter of 2008 owing to the strengths and growth in their global business, new innovations spurring new business growth, maintenance of US earnings, and benefits from the currency fluctuations. It would be great to witness a spiraling growth of their US earnings in the 2nd half 2008.

Innovation Index Group has long-term 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 a gross average annual 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 an investment management company organized under the California state regulation, and is registered with Department of Corporations and SEC Regulation D.

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

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