Method and system for rating securities, method and system for evaluating price of securities, method for establishing a market with the system

• US 20050251475A1
• Filed: 06/13/2005
• Published: 11/10/2005
• Est. Priority Date: 09/03/2001
• Status: Active Grant

• Current Assignee: Michihiro Sato
• Original Assignee: Michihiro Sato
• Inventors: Sato, Michihiro
• Granted Patent: US 7,533,049 B2
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A rating method for securities or fixed rate financing instruments includes calculating a rating value for each one of the securities or fixed rate financing instruments based upon a formula involving grading numbers and weighting factors corresponding to risk and return attributes. The return attribute may be an interest rate, a dividend yield, a yield to maturity, a project performance rating of an issuer, or a ratio defined with a price per share of securities. A method for evaluating a price of a security or fixed rate financing instrument includes calculating an evaluated price based upon a formula involving grading numbers and weighting factors corresponding to each of real-time data including a face value, a coupon, a period prior to maturity, a credit rating of an issuer, a yield, and a yield to maturity; and comparing the evaluated price with a real-time price.

Claims

1. An investment rating system for securities or fixed rate financing instruments comprising:

means for providing at least one risk attribute and at least one return per share attribute shared by said securities or fixed rate financing instruments;

means for grading among said securities or fixed rate financing instruments with grading numbers based on each of said at least one risk attribute and each of said at least one return per share attribute respectively;

means for providing a weighting factor for each of said at least one risk attribute and each of said at least one return per share attribute;

means for calculating an investment rating value for each one of said securities or fixed rate financing instruments based upon a formula involving the grading numbers and a weighting factor corresponding to each of the attributes; and

means for publishing said attributes and the respective weighting factor, and said formula,

wherein the return per share attribute is a dividend yield, a price/earnings ratio, a periodical price performance percentage, a beta/volatility ratio, a price/book ratio, a price/sales ratio, a Price/Earnings to Growth Ratio, or an estimated periodical Earnings per Share Growth, and

wherein the risk attribute is a debt/equity ratio, a maturity term, a guarantee type, a debt rating of the issuer or the guarantor, a credit rating of the issuer or the guarantor, or a callable indication.

2. The rating system according to claim 1, wherein said formula aggregates a product of each of the grading numbers and the weighting factor corresponding to each of the attributes.

3. The rating system according to claim 1, wherein the return per share attribute further includes a profit margin, a sales revenue, or a revenue growth.

4. The rating system according to claim 1, wherein one of the fixed rate financing instruments comprising:

at least one issuing legal entity specified thereon which issues the financing instrument as evidence of debt to acquire funds to finance at least one operation;

a face value specified thereon to be paid to said issuing legal entity in exchange for owning the financing instrument;

a fixed interest rate specified thereon defining periodical interest payments to an instrument holder as a percentage of the face value; and

at least one of (1) a guarantee ratio g being defined as a percentage of the interest payments and the face value to be paid back to the instrument holder as committed by at least one third party to issuance, if said legal entity defaults, 0<

g<

100, and (2) at least one of a fixed-rate dividend d and a fixed-amount dividend to be paid to the instrument holder after an operation financed through said financing instrument starts making profits, said fixed-rate dividend d being defined as a percentage of said profits to be paid to the instrument holder periodically, 0<

d<

100, and

wherein the securities is a note, a stock, a treasury stock, a bond, a debenture, a certificate of interest or participation in a profit-sharing agreement or in oil, gas, or mineral royalty or lease, a collateral trust certificate, a pre-organization certificate or subscription, a transferable share, an investment contract, a voting-trust certificate, a certificate of deposit, for a security, a put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, or a put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or an instrument commonly known as a ‘

security’

;

or a certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing;

but shall not include currency or any note, draft, bill of exchange, or banker'"'"'s acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.

5. The rating system according to claim 4, wherein the return per share attribute is the guarantee ratio g or the fixed-rate dividend d.

6. The rating system according to claim 1, wherein the attributes further include at least one of a financing purpose, a periodical transaction volume, a price, a face value, an issuer, an guarantor, an industrial sector, a number of outstanding issues, an interest rate, a yield to maturity, and a project performance rating of an issuer.

7. A system for evaluating a price of a security or fixed rate financing instrument comprising:

means for retrieving real-time data of said security or fixed rate financing instrument, said real-time data including a price per share, at least one of a face value, an interest rate, a coupon, a period prior to maturity, a credit rating of an issuer, a dividend yield, and a yield to maturity, as well as at least one of a price/earnings ratio, a periodical price performance percentage, a beta/volatility radio, a price/book ratio, a price/sales ratio, a Price/Earnings to Growth Ratio, and an estimated periodical Earnings per Share Growth;

means for grading said real-time data with grading numbers based upon influence on price;

means for providing a weighting factor for each of said real-time data;

means for calculating an evaluated price for said security or fixed rate financing instrument based upon a formula involving the grading numbers and a weighting factor corresponding to each of the real-time data; and

means for comparing said evaluated price with a real-time price to decide whether to sell, buy, or take no action regarding said security or fixed rate financing instrument.

8. The system according to claim 7, wherein said formula aggregates a product of each of the grading numbers and the weighting factor corresponding to each of the real-time data.

9. The system according to claim 7, wherein said real-time data further include supply and demand, a callable indication, a maturity term, and tax status.

10. The system according to claim 7, wherein said fixed rate financing instrument comprising:

at least one issuing legal entity specified thereon which issues the financing instrument as evidence of debt to acquire funds to finance at least one operation;

a face value specified thereon to be paid to said issuing legal entity in exchange for owning the financing instrument;

a fixed interest rate specified thereon defining periodical interest payments to an instrument holder as a percentage of the face value; and

at least one of (1) a guarantee ratio g being defined as a percentage of the interest payments and the face value to be paid back to the instrument holder as committed by at least one third party to issuance, if said legal entity defaults, 0<

g <

100, and (2) at least one of a fixed-rate dividend d and a fixed-amount dividend to be paid to the instrument holder after an operation financed through said financing instrument starts making profits, said fixed-rate dividend d being defined as a percentage of said profits to be paid to the instrument holder periodically, 0<

d<

100, and

wherein the security is a note, a stock, a treasury stock, a bond, a debenture, a certificate of interest or participation in a profit-sharing agreement or in oil, gas, or mineral royalty or lease, a collateral trust certificate, a pre-organization certificate or subscription, a transferable share, an investment contract, a voting-trust certificate, a certificate of deposit, for a security, a put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, or a put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or an instrument commonly known as a ‘

security’

;

or a certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing;

but shall not include currency or any note, draft, bill of exchange, or banker'"'"'s acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.

11. The system according to claim 10, wherein the real-time data further include the guarantee ratio g or the fixed-rate dividend d.

12. The system according to claim 7, wherein said real-time data further include a debt/equity ratio, a guarantee type, a financing purpose, a periodical transaction volume, a credit ranking of a guarantor, an industrial sector, a number of outstanding shares.

13. (canceled)

14. A method for forming a new market comprising one of (1) generating and publishing investment ratings for securities or fixed rate financing instruments, and (2) distributing an evaluating software for evaluating a price of a security or fixed rate financing instrument,

wherein said ratings for securities or fixed rate financing instruments is generated via a rating software includes:

a module for providing at least one risk attribute and at least one return per share attribute shared by said securities or fixed rate financing instruments, said return per share attribute being a dividend yield, a price/earnings ratio, a periodical price performance percentage, a beta/volatility radio, a price/book ratio, a price/sales ratio, a Price/Earnings to Growth Ratio, or an estimated periodical Earnings per Share Growth, said risk attribute being a debt/equity ratio, a maturity term, a guarantee type, a debt rating of the issuer or the guarantor, a credit rating of the issuer or the guarantor, or a callable indication;

a module for grading among said securities or fixed rate financing instruments with grading numbers based on each of said at least one risk attribute and each of said at least one return per share attribute respectively;

a module for providing a weighting factor for each of said at least one risk attribute and each of said at least one return per share attribute; and

a module for calculating an investment rating value for each one of said securities or fixed rate financing instruments based upon a formula involving the grading numbers and a weighting factor corresponding to each of the attributes, and

wherein said evaluating software includes;

a module for retrieving real-time data of said security or fixed rate financing instrument, said real-time data including a price per share, at least one of a face value, an interest rate, a coupon, a period prior to maturity, a credit rating of an issuer, a dividend yield, and a yield to maturity, as well as at least one of a price/earnings ratio, a periodical price performance percentage, a beta/volatility radio, a price/book ratio, a price/sales ratio, a Price/Earnings to Growth Ratio, and an estimated periodical Earnings per Share Growth;

a module for grading said real-time data with grading numbers based upon influence on price;

a module for providing a weighting factor for each of said real-time data;

a module for calculating an evaluated price for said security or fixed rate financing instrument based upon a formula involving the grading numbers and a weighting factor corresponding to each of the real-time data; and

a module for comparing said evaluated price with a real-time price to decide whether to sell, buy, or take no action regarding said security or fixed rate financing instrument.