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Monday, May 19, 2008

Apple On A Tear - Up more than 50% in 3 months

Apple Inc. (NASDAQ: AAPL) shares have run up more than 50% during the last three months.

Apple is one of the Top 20 Innovators of The Innovation Index.

What is driving the stock price?

1. Apple had an impressive second quarter earnings that beat the Wall Street estimates handily. Apple is poised to continue the earnings momentum in 2008, and beyond. How big has Apple revenue grown over the previous five years? About 300%.

2. Mac business is solid as a rock, growing 50% year over year. Apple has just rolled out new versions of iMac clocking over 3 GHz. And Apple is gaining ground in the laptop segment with the MacBooks.

3. iPhone business is strong, and Apple is on track to sell 10 million or more iPhones in 2008 - we estimate over 12 million. Some estimates track iPhone sales of over 5 million already in 2008.

Apple is introducing the all new iPhone 2.0 aka iPhone 3G next month. Further, Apple has created alliances all over the world to sell millions more iPhones.

Four mobile operators in the Asia-Pacific region introduced partnerships with Apple to bring the iPhone to their regions later this year. SingTel in Singapore, Bharti Airtel Ltd. in India, Globe Telecom Inc. in the Philippines and Optus in Australia. SingTel owns Optus and holds a 30.5 percent stake in Bharti and 44.5 percent in Globe. SingTel has about 2.3 million mobile subscribers in Singapore and around 7 million in Australia, according to data as of Dec. 31, 2007. Bharti currently has about 64 million subscribers, while Globe reported a 21.3 million mobile subscriber base for the quarter ended March 31. Potential Available Subscriber base for the iPhone: Over 95 million.

The top mobile phone operator in Latin America, America Movil SAB, (NYSE: AMX), another Top 20 Innovator, also announced plans to deliver the iPhone to its region. America Movil has 159.2 million subscribers in 16 countries, including Argentina, Brazil, Chile, Colombia and Mexico.

Apple has also signed deals with Rogers Communications Inc. to sell the device in Canada; Milan-based Telecom Italia SpA to sell the iPhone in Italy; and Vodafone Group PLC, the world's biggest mobile company by sales, to sell it in a total of 10 countries, including Australia, India, Italy and Turkey.

Finally, Apple sells iPhone with AT&T Inc. (NYSE: T), another Top 20 Innovator, in the United States, O2 in Britain, T-Mobile in Germany and France Telecom's Orange wireless arm in France.

In short, Apple has available subscriber base in the hundreds of millions for the iPhone - now it's a matter of time before Apple launches the new 3G iPhone, and potentially expands the market for the iPhone to tens of millions a year beginning in 2009.

The Innovation Index Fund Manager, that invests in Apple, is up 10% 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 double-digit 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, and price target of $235 - $250 for Apple in Q4, 2008.

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 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

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

Monday, May 12, 2008

RIM Tests New Highs - Launches New BlackBerry Bold Smartphone

Research In Motion (RIM) (NASDAQ: RIMM) announced the all new BlackBerry(R) Bold(TM) smartphone, to be released in Summer 2008. RIM is one of the Top 20 Innovators of The Innovation Index.

"The Bold is the first BlackBerry smartphone to support tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi(R), as well as a rich set of multimedia capabilities."

Bold is the first 3G phone from Blackberry.

Bold Promises Superior Performance

"The BlackBerry Bold smartphone's support for tri-band HSDPA and enterprise-grade Wi-Fi (802.11 a/b/g) networks and its next-generation 624 MHz mobile processor" promise higher performance when downloading email attachments, streaming video or browsing multimedia web pages. "The BlackBerry Bold also includes 128 MB Flash memory plus 1 GB on-board storage memory, as well as a microSD/SDHC memory card slot(ii) that is conveniently accessible from a side door."

Bold has Improved Display

"The BlackBerry Bold smartphone comes with the most vivid and bold display ever introduced on a BlackBerry smartphone. Its half-VGA (480x320 resolution) color LCD is fused to the undersurface of the lens, making images leap out with stunning definition and clarity."

Bold provides Better Browsing

"With its newly enhanced, high performance browser and high-resolution, ultra-bright display, the BlackBerry Bold smartphone gives users an on-the-go web browsing experience with desktop-style depiction.... There is support for watching streaming videos (RTSP - real-time streaming protocol)."

Bold has Integrated Multimedia and Support for iTunes and USB 2.0

"The BlackBerry Bold features a 2 megapixel camera with video recording capability, built-in flash and 5x digital zoom. The enhanced media player can display pictures and slideshows quickly, play movies smoothly in full screen mode, and manage an entire music collection...

For managing music and video, the BlackBerry(R) Desktop Manager software includes Roxio(R) Media Manager for BlackBerry(R) as well as Roxio Photosuite(R) 9 LE, which makes it easy to enhance pictures and create photo albums on the computer. For users that manage their collection with iTunes(R), the new BlackBerry(R) Media Sync application provides a simple way to sync iTunes digital music collections with the smartphone(iii). Support for High Speed USB 2.0 allows all files to be transferred quickly from a desktop computer to the BlackBerry Bold smartphone."

Bold supports built-in WI-FI and GPS - Finally!

"The BlackBerry Bold smartphone supports the 802.11 a/b/g Wi-Fi standards, ideal for use in enterprise or campus wireless LAN deployments, over Wi-Fi hotspots and on wireless home networks. A new "Push Button Setup" is included, making it faster for users to connect to protected wireless networks that require a sign on process.

Through its integrated GPS, the BlackBerry Bold smartphone can pinpoint its exact location, supporting applications like BlackBerry(R) Maps and other location-based applications or services. With its improved rendering capabilities, faster download speeds and ability to support simultaneous voice and data, the BlackBerry Bold smartphone even allows users to navigate while on a call."

Bold is a Better Phone

"The BlackBerry Bold smartphone features a new acoustic design that increases the size of the phone's audio sweet spot, improving listening quality and clarity. It also comes with numerous premium phone features including Speaker Independent Voice Recognition (SIVR) for Voice Activated Dialing (VAD), Bluetooth(R) 2.0, with support for hands-free headsets, stereo headsets, car kits and other Bluetooth peripherals. It is a quad-band EDGE and tri-band HSDPA handset that supports global roaming(iiii) and features dedicated 'send', 'end', and 'mute' keys, smart dialing, speed dialing, conference calling and call forwarding. It also features noise cancellation technology that offsets background noise, a powerful speaker phone and support for polyphonic, mp3 and MIDI ring tones."

Bold has Always-On Email & Messaging

"Bold works with BlackBerry(R) Enterprise Server, which enables advanced security and IT administration within IBM(R) Lotus(R) Domino(R), Microsoft(R) Exchange and Novell(R) GroupWise(R) environments, as well as BlackBerry(R) Professional Software for small businesses. It also works with BlackBerry(R) Internet Service, which gives users access to up to 10 work or personal email accounts (including most popular ISP email accounts), and the BlackBerry(R) Unite! software for SOHO and home users."

"With this powerful new smartphone, users can even talk on the phone while sending and receiving email or accessing the web, and download Word, Excel or PowerPoint files and edit them directly on the handset using the preloaded DataViz(R) Documents to Go(R) suite."

Bottomline:

RIM is up about 7% today, and has broken through the 52-week high. RIM has set a new all-time high share price of $142.13 on the news of RIM's new Bold.

Although the new Bold does not have the Touch-screen of the Apple iPhone, and may pale slightly in head-to-head feature comparison with the soon to be launched Apple iPhone 2.0, the new 3G iPhone from Apple, RIM has fired a solid early answer to Apple. RIM is after all the 800-lb gorilla in the smartphone market. RIM also announced a new $150 million venture capital fund to invest in mobile applications and services for the BlackBerry(R) platform and other mobile platforms, in the same vein as Apple's announced $100 million venture fund with Kleiner Perkins. RIM is essentially telling the business world and the Wall Street that the BlackBerry will not take a passenger's seat to Apple's iPhone. Rather, it wants to take the driver's seat, and wants to take on the Apple iPhone onslaught head-on. Can the new Bold provide the answer RIM is seeking to the new iPhone? Can the new Bold stall iPhone's emergence in the smartphone market? The winners are all the smartphone buyers and consumers, since RIM is about to give all these buyers a worthy choice - a smartphone that has almost all the features that an iPhone has except the touch screen - with a keyboard.

Apple Inc. (NASDAQ: AAPL) is also a Top 20 Innovator of The Innovation Index.

Innovation Index Group has a BUY recommendation on both RIM and Apple.

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 is up 8% 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:

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:
Company Press Releases

Saturday, April 12, 2008

Silver Lining In GE's Disappointing Earnings and Guidance

GE (NYSE: GE) announced the "first quarter 2008 earnings from continuing operations of $4.4 billion with $.44 per share, down 8% from first quarter 2007. First quarter 2008 net earnings were $4.3 billion or $.43 per share, down 2% from first quarter 2007. First quarter revenues from continuing operations were $42.2 billion, up 8%."

GE is one of the Top 20 Innovators of The Innovation Index.

"Demand for our global Infrastructure business remained strong, but our financial services businesses were challenged by a slowing U.S. economy and difficult capital markets," GE Chairman and CEO Jeff Immelt said. "While we are disappointed with our results, the fundamentals of our businesses are strong."

"Infrastructure had a solid quarter, growing revenues 23% and earnings 17%," Immelt said. "Oil & Gas, Energy, Transportation, and Aviation all generated double-digit profit growth - with no signs of slowing. Infrastructure orders increased 12%, and we added more than $3 billion in backlog since last quarter."

Total orders were $24 billion, up 8%. Major equipment orders grew 11% to $12 billion. Major equipment backlog was at $52 billion, an increase of 41%. Services orders were up 5%, and CSA backlog stood at $110 billion, an increase of 16% year-over-year.

"Our focus on globalization has helped sustain the Company during the U.S. slowdown. Global revenues grew 22%, with strength in virtually every business," Immelt said. "Developing country growth was 38%, and 14% in developed countries outside the U.S.

"Nevertheless, we failed to meet our expectations. Our primary shortfall was a decline in financial services earnings. We knew the first quarter was going to be challenging, but the extraordinary disruption in the capital markets in March affected our ability to complete asset sales and resulted in higher mark-to-market losses and impairments," Immelt said. "Our inability to complete these asset sales and higher mark-to-market losses and impairments impacted earnings by $.05 per share versus plan.

"Commercial Finance and GE Money remain in good shape and still earned $2.2 billion in a tough market. Our balance sheet is strong, portfolio quality is stable and we are originating business at high margins.

"Our other industrial businesses had mixed performances. NBC Universal grew segment profits 3%, for its sixth straight quarter of profit growth," Immelt said. "In the Industrial segment, we had strong performance in Enterprise Solutions, with profit up 15%, partially offsetting a difficult U.S. appliance market. Healthcare earnings were impacted by a difficult U.S. environment and continued regulatory shipping restrictions on the surgical supplies business.

"In light of what we have seen in the first quarter, we have revised our earnings outlook for the full year to protect investors by reflecting a slower economy and assuming capital markets remain challenging," Immelt said. "We are lowering our full-year EPS guidance to $2.20-2.30 from continuing operations reflecting growth of 0-5%. As a part of this guidance, we expect our industrial earnings to grow 10-15% and financial services earnings to decline 5-10%. This range encompasses any portfolio actions we have announced. Consistent with this range, our second quarter 2008 guidance is $.53-.55 EPS." - GE Press Release

Bottomline:

While GE disappointed every investor with the shortfall in earnings and the lowered future earnings outlook, if one believes in GE's longer term business growth, corporate governance, and global leverage, GE is quite possibly the best bellweather out there. What is the silver lining? There are many positives in GE's earnings report: GE's total revenue was up 8%, strong demand for global infrastructure, rise in total orders, and substantial increase in major backlogs. If you are a GE believer, and make an assumption that U.S. economy improves in the second half of 2008, GE might just surprise the investors in the 3rd and 4th quarter of 2008 - positively.

Innovation Index Group, Inc. has a BUY rating on GE with Q4, 2008 price target of $40 to $45.

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 has generated a gross average annual return of 40%.

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:

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, and returned 174% over the previous five years (2002-2006). 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 - (NYSE: 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

References:

GE Press Release

Wednesday, March 19, 2008

Nike Delivers Outstanding 3Q Results - Growth In Innovative Products, Diversified Portfolio, Global Sales and Futures Orders

Nike Inc. (NYSE: NKE) delivered solid third quarter results, beating the high-end analyst expectations on both earnings and revenue. Sales revenue grew 16 percent to $4.5 billion, compared to $3.9 billion for the same period last year; earnings increased 35 percent to 92 cents per share versus 68 cents last year; net income rose 32 percent to $463.8 million compared to $350.8 million last year. Nike shares were up more than 4 percent in after hours.

Nike is one of the Top 20 Innovators of The Innovation Index. Innovation Index Group, Inc. rates Nike a BUY, and has a Q4, 2008 stock price target of $80.

Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index.

In the press release, Mark Parker, NIKE, Inc. President and Chief Executive Officer stated: "Our strong third quarter results, driven by sales gains across our diversified portfolio of categories, geographies, and brands, are a clear indication that our strategy is working and that we're on track to achieve our financial goals for this fiscal year and beyond."

Parker continued, "Over the past twelve months we've taken a number of important strategic steps to strengthen the performance and potential of our portfolio of products and brands, steps we believe create stronger platforms for growth and allow us to connect even deeper with consumers. More than ever, the consumer is at the epicenter of everything we do, and delivering the most innovative products and the most exciting consumer experiences is the key to our future growth."

Nike -> Most Innovative Products + Brands -> Most Exciting Consumer Experiences -> Tremendous Future Growth

Nike benefited from the exchange rate in the 3rd quarter that increased the revenue growth by 6 percent.

Future Outlook

The leading indicator on how well Nike will do in the 4th quarter is Futures Orders. Nike is well poised to repeat the revenue and earnings growth based on the future visibility:
The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from March 2008 through July 2008, totaling $6.9 billion, 11 percent higher than such orders reported for the same period last year.

Global Growth

Nike reported 20 percent or higher sales growth in Asia-Pacific, Europe and the Americas region (excluding U.S.) from last year. Global orders of clothing and footwear through July increased 11 percent. China sales were up more than 50 percent as consumers bought shoes and clothing before this summer's Olympic Games. Nike has already reached $1 billion in sales in China, a year ahead of its original target, Parker said in the earnings release. U.S. revenues were up 5 percent compared to last year. The global consumer is buying more diversified Nike products - shoes, apparel, equipment - thereby creating a revenue surge.

Parker concluded, "Our focus on prime growth opportunities extends throughout our portfolio of brands. We are confident that our divestiture decisions are the right ones for Bauer Hockey, Starter, and Nike. Our most recent acquisition, Umbro, is a brand that has tremendous heritage and respect in global football. This acquisition represents an opportunity to create value for shareholders and consumers by applying our product, brand-building and operational capabilities to a business with enormous growth potential around the world." - Innovation through acquisition. Nike is not shy to grow its global brand by acquiring a strong brand and channeling it through Nike's innovative process.

Recent Innovations

Earlier in March, Nike extended its partnership with Apple Inc. (NASDAQ: AAPL), another Top 20 Innovator, to the gym, by announcing Nike + iPod integration with gym equipments. Nike is poised to do well in this undertaking.

Nike also announced the Nike SPARQ Training, the company's "most comprehensive performance training launch ever, combining a relationship with SPARQ, high performance products, online experiences at nike.com, a new association with Velocity Sports Performance Centers, and a multi-media campaign called “My Better.”" The centerpiece of Nike’s efforts is SPARQ which stands for Speed, Power, Agility, Reaction and Quickness

These key innovations across a diversified portfolio of products, global distribution, and global growth will likely propel Nike's revenue and earnings growth through 2010.

Nike is one of the Top 20 Innovators of The Innovation Index. Innovation Index Group, Inc. rates Nike a BUY, and has a Q4, 2008 stock price target of $80.

Related Articles:

Nike (NYSE: NKE) and Apple (NASDAQ: AAPL) working out at a Gym near you
Creativity And Innovation in Business Definitive Guide

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 has generated a gross average annual return of 40%.*

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:

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, and returned 174% over the previous five years (2002-2006). 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 - (NYSE: 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

Friday, March 16, 2007

The Innovation Index unchanged, still beats U.S. major indices – Weekly Report 03-14-07

The Innovation Index stayed even last week, and is now unchanged for the year. However, The Innovation Index leads the major U.S. indices. S & P 500 and NASDAQ are each down 2% for the year, while the Dow Jones Index is now down 3% for the year.

The Innovation Index closed at 69.53 on March 14, 2007, practically unchanged from the closing price of 69.31 on December 29, 2006.

In a sign of perhaps better results on the horizon, 4 of the Top 20 Innovators showed positive gains (compared to 4 the previous week), 9 of the Top 20 Innovators dipped in the red (compared to 14 the previous week), and 7 Innovators were unchanged last week (compared to 2).

Weekly Advances

America Movil (NYSE: AMX) was the largest weekly gainer last week at 4%. 3M Company (NYSE: MMM) made a nice comeback with gains of 3%. The massive stock buy back at 3M and new business unit launch is helping 3M; 3M is only down 2% for the year. Apple Inc. (NASDAQ: AAPL) tagged another 3% gain for the week, and is now up 6% for the year. Intel Corporation (NYSE: INTC) made a nice gain of 1% last week. Intel should rally well for the rest of the year.

“Intel announced two energy-efficient 50-watt server processors that represent a 35- to nearly 60-percent decrease in power from Intel's existing 80- and 120-watt quad-core server products. These new processors, requiring just 12.5 watts of power for each of the four cores or processing engines, deliver similar performance yet set a new standard in energy efficiency.” Intel will invest a total US$2.5 billion in a chip plant in China. “The approval comes as China's consumer market continues to develop rapidly, particularly for personal computers and mobile phones, and as Beijing encourages industries and companies to develop and use higher-end technologies.” – Intel press announcements.

“3M Health Care announced the launch of a new Medical Diagnostics business unit that will focus on developing and commercializing rapid diagnostic product solutions for the detection of key infectious pathogens, including methicillin-resistant Staphylococcus aureus (MRSA) and other treatment-resistant microbes. This new business builds on 3M Health Care's leading infection prevention product portfolio by offering hospitals new rapid diagnostic tests to detect the presence of potentially destructive microbes before they spread and possibly infect patients. 3M Medical Diagnostics will provide hospitals with rapid, easy-to-use microbial diagnostic tests that may help improve patient outcomes, reduce costs, reduce the impact of resistant microbes and improve laboratory profitability.” – 3M press announcement.

Weekly Declines

Wal-Mart Stores, Inc. (NYSE: WMT) was the largest decliner last week. Wal-Mart shares dropped 5%, and are now down 1% for the year. Starbucks Corporation (NASDAQ: SBUX) is on a dive, losing another 4% last week. Yahoo! Inc. (NASDAQ: YHOO), Google Inc. (NASDAQ: GOOG) and Target Corp. (NYSE: TGT) were each down 2% last week.

Yearly Leaders and Laggards

Yahoo! Inc. (NASDAQ: YHOO) is leading the top 20 innovators with 17% gain for the year. Research In Motion Limited (NASDAQ: RIMM) and Apple Inc. (NASDAQ: AAPL) are tied at 6% each.

Starbucks Corporation (NASDAQ: SBUX) shares are now down 17% this year. How can Starbucks turnaround this stock performance after posting a solid 18% gain last year? Dell Inc. (NASDAQ: DELL) was unchanged last week, and has managed to stop the downward stock spiral for now. Dell is down 11% for the year. Dell has a tough road ahead as Dell begins the turnaround.

The Innovation Index Annual Report

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 has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

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.