Investing in innovators: how patent valuation changes the game

Innovative businesses are more likely to outperform regressive ones in the long run—this assumption is something akin to gospel for companies and investors alike.  But a problem arises when investors try to concretely account for the innovativeness of a particular company: innovation is intangible and thus difficult to evaluate.  Thankfully, there is an alternative data answer to the problem. Patents are an excellent way to evaluate a company’s innovativeness and uncover value that doesn’t show up on balance sheets. They are a powerful leading indicator and can signal a company’s potential future growth. Developing new products, new technologies and licenses—and...