The Innovation Index up 4% - Weekly Report 02-14-07

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



The Innovation Index is now up 4% in 2007. S & P 500 was even for the week, and is up 3% in 2007. NASDAQ was even for the week, and is up 3% for the year, whereas the Dow Jones Index was up 1% in one week, and is up 2% in 2007.

The Innovation Index closed at 72.31 on February 14, 2007, up 2.93 points from the closing price of 69.38 on December 29, 2006.

9 of the Top 20 Innovators showed positive gains, 7 of the Top 20 Innovators went down, and 4 Innovators were unchanged.

I released a weekly report of The Top Ten Innovations at the Top 20 Innovators yesterday. I am planning to release this sister report to The Innovation Index weekly report each week.

Weekly Advances

Southwest Airlines (NYSE: LUV) was up 6% in just one week owing to slight increase in fares, and potential return of Southwest to San Francisco in 2007. Southwest was in the red in 2007, but a 6% gain helped Southwest return to the black with a total gain of 5% for the year. America Movile (NYSE: AMX) was up 5% in one week, and is now up 7% for the year. The strong Mexican economy and the stock market are lifting America Movile stock performance. Yahoo! (NASDAQ: YHOO), 3M (NYSE: MMM) and Amazon.com (NASDAQ: AMZN) were each up 3% for the week. Yahoo! is surging owing to the potential upside revenue of Panama, integrated marketing innovation announced last week, and a separate deal announced with LG. 3M is up due to the largest stock buyback in 3M's history: over $7 billion. Amazon.com is performing well in 2007; in particular, Amazon announced that the fourth quarter 2006 jewelry and watch sales increased more than 100 percent year-over-year. It appears that Amazon's new innovations with new stores are helping the topline revenue.

Weekly Declines

There were no significant declines last week. Cisco Systems (NASDAQ: CSCO) and Intel Corporation (NASDAQ: INTC) each shed 2% for the week. Cisco is now unchanged for the year, after posting 60% gain in 2006. Can Cisco repeat 2006 gains? Intel is up 4% in 2007, and is looking to rebound even higher for the rest of 2007.

Yearly Leaders and Laggards

Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 20% stock performance gain for the year. eBay Inc. (NASDAQ: EBAY) has already gained 11% in 2007, and Target Corporation (NYSE: TGT) is up 9% for the year. Dell Inc. (NASDAQ: DELL) is down 5% for the year; however, Michael Dell has returned as the CEO, and has recently announced a major leadership reorganization. Expect Dell to begin the turnaround by the second half of 2007. Starbucks Corporation (NASDAQ: SBUX) is also down 6% 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 Movile - (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 beginning in 2007.

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