Method and system for creating a portfolio of stock equities

• US 6,839,685 B1
• Filed: 10/30/1998
• Issued: 01/04/2005
• Est. Priority Date: 10/30/1998
• Status: Expired due to Term

• Current Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Original Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Inventors: Leistensnider, James, Loop, Thomas
• Primary Examiner(s): Kazimi, Hani M.
• Application Number:
  US09/182,466
• Time in Patent Office: 2,258 Days
• Field of Search: 705/1, 705/10, 705 35- 37, 705/42, 705/43, 235/379
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A computer-implemented method and system for selecting stock equities for inclusion in a strategic investment portfolio includes identifying stocks making up a preselected index, and analyzing the stocks for dividends, earnings per share, earnings growth, market capitalization, and economic sector, according to predetermined criteria selected according to the investment strategy. A sorted list of acceptable stocks is then created from which the portfolio is assembled.

Claims

1. A computer-implemented method for creating a portfolio of equity stocks, comprising the steps of:

determining the composition of a predetermined broadbased stock index by accessing a database and creating a list of the stocks making up said index;

obtaining from said database for each stock in said index, data relating to at least earnings, dividend yield and the economic sector of the company issuing the stock;

determining the composition of a narrower based stock index by accessing said database;

creating an acceptable stock list by at least

a) eliminating from said index list stocks having earnings below a predetermined earnings indicator,

b) eliminating from said index list stocks which are part of said narrower based index,

c) eliminating from said index list stocks which are in a predetermined economic sector, and

d) placing the remaining stocks into a list of acceptable stocks; and

sorting the acceptable list of stocks by dividend yield and placing into said portfolio, until a predetermined number of stocks are reached, a stock having the highest dividend yield of said remaining list, so long as the number of stocks in said portfolio from the same economic sector does not exceed a predetermined number.

2. The computer-implemented method of claim 1, wherein said creating step further includes the further step of eliminating from said index list stocks having a dividend yield below a predetermined yield indicator.

3. The computer-implemented method of claim 1, wherein the step of sorting and placing includes the further step of rejecting a stock having a market capitalization below a predetermined value.

4. The computer-implemented method of claim 1, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period.

5. The computer-implemented method of claim 1, wherein said predetermined earnings indicator is a positive earnings per share over a predetermined time period.

6. The computer-implemented method of claim 1, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period and a positive earnings per share over a predetermined time period.

7. The computer-implemented method of claim 2, wherein said predetermined yield indicator is a non-declining annualized yield over a predetermined time period.

8. The computer-implemented method of claim 1, wherein said broadbased stock index is the Standard &

Poor'"'"'s 500 Index.

9. The computer-implemented method of claim 1, wherein said narrower based stock index is the Dow Jones Industrial Average.

10. The computer-implemented method of claim 1, wherein said predetermined earnings indicator is an earnings growth of at least a predetermined factor of the previous year'"'"'s earnings growth.

11. A computer-implemented system for creating a portfolio of equity stocks, comprising:

a database containing information pertaining to individual stocks, and information pertaining to the identity of stocks making up a plurality of known stock indexes;

means for determining the composition of a predetermined broadbased stock index by accessing said database and creating a list of the stocks making up said index;

means for obtaining from said database for each stock in said index, data relating to at least earnings, dividend yield and the economic sector of the company issuing the stock;

means for determining the composition of a narrower based stock index by accessing said database;

means for creating an acceptable stock list by at least

a) eliminating from said index list stocks having earnings below a predetermined earnings indicator,

b) eliminating from said index list stocks which are part of said narrower based index,

c) eliminating from said index list stocks which are in a predetermined economic sector, and

d) placing the remaining stocks into a list of acceptable stocks; and

means for sorting the acceptable list of stocks by dividend yield and placing into said portfolio, until a predetermined number of stocks are reached, a stock having the highest dividend yield of said remaining list, so long as the number of stocks in said portfolio from the same economic sector does not exceed a predetermined number.

12. The computer-implemented system of claim 11, wherein said means for creating further includes means for eliminating from said index list stocks having a dividend yield below a predetermined yield indicator.

13. The computer-implemented system of claim 11, wherein said means for sorting and placing further includes means for rejecting a stock having a market capitalization below a predetermined value.

14. The computer-implemented system of claim 11, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period.

15. The computer-implemented system of claim 11, wherein said predetermined earnings indicator is a positive earnings per share over a predetermined time period.

16. The computer-implemented system of claim 11, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period and a positive earnings per share over a predetermined time period.

17. The computer-implemented system of claim 12, wherein said predetermined yield indicator is a non-declining annualized yield over a predetermined time period.

18. The computer-implemented system of claim 11, wherein said broadbased stock index is the Standard &

Poor'"'"'s 500 Index.

19. The computer-implemented system of claim 11, wherein said narrower based stock index is the Dow Jones Industrial Average.

20. The computer-implemented system of claim 11, wherein said predetermined earnings indicator is an earnings growth of at least a predetermined factor of the previous year'"'"'s earnings growth.

21. A computer program product having computer-readable code stored on a computer-readable storage medium, said computer readable code comprising:

mean for determining the composition of a predetermined broadbased stock index by accessing a database and creating in a computer in which said code is programmed a list of the stocks making up said index;

means for obtaining from said database for each stock in said index, data relating to at least earnings, dividend yield and the economic sector of the company issuing the stock;

means for determining the composition of a narrower based stock index by accessing said database;

means for creating an acceptable stock list by at least

a) eliminating from said index list stocks having earnings below a predetermined earnings indicator,

b) eliminating from said index list stocks which are part of said narrower based index,

c) eliminating from said index list stocks which are in a predetermined economic sector, and

d) placing the remaining stocks into a list of acceptable stocks; and

means for sorting the acceptable list of stocks by dividend yield and placing into said portfolio, until a predetermined number of stocks are reached, a stock having the highest dividend yield of said remaining list, so long as the number of stocks in said portfolio from the same economic sector does not exceed a predetermined number.

22. The computer program product of claim 21, wherein said means for creating further includes means for eliminating from said index list stocks having a dividend yield below a predetermined yield indicator.

23. The computer program product of claim 21, wherein said means for sorting and placing further includes means for rejecting a stock having a market capitalization below a predetermined value.

24. The computer program product of claim 21, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period.

25. The computer program product of claim 21, wherein said predetermined earnings indicator is a positive earnings per share over a predetermined time period.

26. The computer program product of claim 21, wherein said predetermined earnings indicator is a non-declining earnings per share over a predetermined time period and a positive earnings per share over a predetermined time period.

27. The computer program product of claim 22, wherein said predetermined yield indicator is a non-declining annualized yield over a predetermined time period.

28. The computer program product of claim 21, wherein said broadbased stock index is the Standard &

Poor'"'"'s 500 Index.

29. The computer program product of claim 21, wherein said narrower based stock index is the Dow Jones Industrial Average.

30. The computer program product of claim 21, wherein said predetermined earnings indicator is an earnings growth of at least a predetermined factor of the previous year'"'"'s earnings growth.