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.

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