The Innovation Index gains 3% during the first quarter, beats U.S. major indices – Quarterly Report 03-30-07
The Innovation Index gained 3% during the first quarter of 2007 despite a broader market weakness. The Innovation Index leads the major U.S. indices owing to the combined strength of the Top 20 Innovators. S & P 500 and NASDAQ finished the quarter unchanged – 0%; the Dow Jones Index is down 1% for the quarter.
The Innovation Index closed at 71.72 on March 30, 2007, up 3% from the closing price of 69.31 on December 29, 2006.
How solid was the first quarter for the Top 20 Innovators? 8 of the Top 20 Innovators showed positive gains during the first quarter, while 12 of the Top 20 Innovators had negative returns, and no Innovators were unchanged.
Quarterly Leaders
Yahoo! Inc. (NASDAQ: YHOO) is leading the top 20 innovators with 23% gain for the first quarter. What’s remarkable is that Yahoo was down 35% in 2006; 2007 is a whole new ball game for Yahoo! in large part owing to the new Panama search, and a host of new innovations from Yahoo! Can Yahoo! catch Google? Apple Inc. (NASDAQ: AAPL) and eBay Inc. (NASDAQ: EBAY) are tied at 11% gains during the first quarter. Apple had a solid 2006 at 18% return; however, 2007 performance can easily eclipse the 2006 stock gains due to the introduction of AppleTV and the upcoming launch of iPhone. eBay is another Innovator who was down 30% in 2006, and is rebounding well in 2007. The pipeline of innovations and growth in core auction business is paying off for eBay.
2006’s top innovator with regards to stock performance is having a good 2007 as well: Research in Motion Limited (NASDAQ: RIMM) (RIM) is having a go again, thanks in large part due to the new Blackberry and Pearl, and the global network expansion of Blackberry. RIM is up 7% in 2007, and was up 94% in 2006.
Quarterly Laggards
Which Innovators are behind in stock performance at this stage of the game? Answer: Many. 12 of the Top 20 Innovators are showing negative returns for the first quarter. An overall majority. However, only one Innovator is showing double-digit negative returns, and has catching up to do - Starbucks Corporation (NASDAQ: SBUX) is down 11% during the first quarter of 2007. Starbucks performed remarkably well in 2006 at 18% stock gain. Can Starbucks rebound in the second quarter? Last year’s runner up in stock performance gains at 60%, and one of the top five innovators Cisco Systems, Inc. (NASDAQ: CSCO) is down 7% in 2007. Why is Cisco down? Cisco made some big acquisitions in the first quarter including that of WebEx. However, the investors are skittish on Cisco’s ability to digest these acquisitions and execute well on the core business. Another bell-weather is weathering a storm, and is down at 7% in 2007: Dell Inc. - (NASDAQ: DELL). However, Dell is up from the lowest point of the year, and is poised to rebound in the second half as Michael Dell begins the turnaround. Microsoft Corporation (NASDAQ: MSFT) had the biggest launch in the history, Windows Vista. However, the stock is still down 6% for the year. Can Microsoft reverse this slide and end the year in the positive territory? Bullish results from Vista, and the revenue impact from recent innovations can help.
Second Quarter Projections
What innovations and related stock gains can be expected in the second quarter? All Innovators would have announced their quarterly results, which most analysts believe to be in the positive. If the Innovators easily beat these estimates, project a good outlook, and announce brand new Innovations, The Innovation Index will runaway to double-digit gains. If the market takes another downturn, and the overall economy cools, the second quarter could be trying and will test The Innovation Index.
I posted the Top 10 Innovations from the Top 20 Innovators last week that summarizes the past week’s key innovations.
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.
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.
How solid was the first quarter for the Top 20 Innovators? 8 of the Top 20 Innovators showed positive gains during the first quarter, while 12 of the Top 20 Innovators had negative returns, and no Innovators were unchanged.
Quarterly Leaders
Yahoo! Inc. (NASDAQ: YHOO) is leading the top 20 innovators with 23% gain for the first quarter. What’s remarkable is that Yahoo was down 35% in 2006; 2007 is a whole new ball game for Yahoo! in large part owing to the new Panama search, and a host of new innovations from Yahoo! Can Yahoo! catch Google? Apple Inc. (NASDAQ: AAPL) and eBay Inc. (NASDAQ: EBAY) are tied at 11% gains during the first quarter. Apple had a solid 2006 at 18% return; however, 2007 performance can easily eclipse the 2006 stock gains due to the introduction of AppleTV and the upcoming launch of iPhone. eBay is another Innovator who was down 30% in 2006, and is rebounding well in 2007. The pipeline of innovations and growth in core auction business is paying off for eBay.
2006’s top innovator with regards to stock performance is having a good 2007 as well: Research in Motion Limited (NASDAQ: RIMM) (RIM) is having a go again, thanks in large part due to the new Blackberry and Pearl, and the global network expansion of Blackberry. RIM is up 7% in 2007, and was up 94% in 2006.
Quarterly Laggards
Which Innovators are behind in stock performance at this stage of the game? Answer: Many. 12 of the Top 20 Innovators are showing negative returns for the first quarter. An overall majority. However, only one Innovator is showing double-digit negative returns, and has catching up to do - Starbucks Corporation (NASDAQ: SBUX) is down 11% during the first quarter of 2007. Starbucks performed remarkably well in 2006 at 18% stock gain. Can Starbucks rebound in the second quarter? Last year’s runner up in stock performance gains at 60%, and one of the top five innovators Cisco Systems, Inc. (NASDAQ: CSCO) is down 7% in 2007. Why is Cisco down? Cisco made some big acquisitions in the first quarter including that of WebEx. However, the investors are skittish on Cisco’s ability to digest these acquisitions and execute well on the core business. Another bell-weather is weathering a storm, and is down at 7% in 2007: Dell Inc. - (NASDAQ: DELL). However, Dell is up from the lowest point of the year, and is poised to rebound in the second half as Michael Dell begins the turnaround. Microsoft Corporation (NASDAQ: MSFT) had the biggest launch in the history, Windows Vista. However, the stock is still down 6% for the year. Can Microsoft reverse this slide and end the year in the positive territory? Bullish results from Vista, and the revenue impact from recent innovations can help.
Second Quarter Projections
What innovations and related stock gains can be expected in the second quarter? All Innovators would have announced their quarterly results, which most analysts believe to be in the positive. If the Innovators easily beat these estimates, project a good outlook, and announce brand new Innovations, The Innovation Index will runaway to double-digit gains. If the market takes another downturn, and the overall economy cools, the second quarter could be trying and will test The Innovation Index.
I posted the Top 10 Innovations from the Top 20 Innovators last week that summarizes the past week’s key innovations.
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.
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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