Kpss Inno Value Momentum
In plain terms
Companies where the economic value of each new patent is rising (not just the count) compound innovation quality in a way the market underprices.
How it works
KPSS patent innovation value (stock-market-implied value of each patent at grant) is a forward-looking measure of patent economic value. Momentum in KPSS value (improvement in average patent quality over trailing 4 quarters) predicts future stock returns and revenue growth.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Patent innovation value
Kogan-Papanikolaou-Seru-Stoffman patent dollar-value series.
Expected edge
- Reported return
- ~4-6% ann.
- Tested over
- 1926-2010 (KPSS)
KPSS innovation value momentum: ~4-6% ann. over 6-12 month holding period.
Related families
Companies whose patent filing rate is accelerating are investing more in innovation -- and the market is slow to price that in.
Companies that generate more patents per R&D dollar outperform those that spend heavily on R&D but produce fewer high-value patents.
Explore Kpss Inno Value Momentum on alphactor.ai
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