patent innovation premium
Mechanism
Patent values inferred from 3-day stock reaction to USPTO grant. Firms with high value of recently granted patents (relative to market cap) outperform by ~3-5%/yr — real options on growth the market under-prices until citations validate.
Signal rule
rolling 12m patent_value/market_cap; long top quintile
Data dependencies
uspto_patentsview (free bulk)USPTO grant data with citation counts.
kpss_extended_csvWorker data table — see services/worker schema.
Expected edge
3-5% ann. long-short; survives most replication tests
Illustrative pattern only
NOT a backtestIllustrative pattern only — see /app for live backtests and the actual current equity curve.
Example tickers where this is likely to fire
Illustrative only — the signal fires based on the live data, not a fixed list.
Related families
novy marx gross profitabilityAccounting(Revenue − COGS) / total_assets — gross profitability — predicts cross-sectional returns as strongly as book-to-market, and has been the mainstream "profitability" leg of the FF5 model since 2015. Distinct from QMJ which composites profitability+growth+safety; standalone GP is the high-beta version that explains more of the
rd capitalized valueAccountingStandard book-to-market based value factors mis-classify R&D-heavy firms as "growth" because R&D is expensed (not capitalized) under GAAP. Peters-Taylor 2017 + Eisfeldt-Kim-Papanikolaou 2020 show that adding capitalized R&D back to book equity restores the value premium for tech/biotech and reverses the apparent "value-is-dead" finding of the
Explore patent innovation premium on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.