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Alpha Picks Review by Seeking Alpha (plus vs Motley Fool and Zacks)

Intro to Alpha Picks Review

Seeking Alpha’s newest product “Alpha Picks” claims to identify 2 stocks every month that have the greatest chance for price appreciation. They pick these 2 stocks based on their “proprietary, data-driven computer scoring system.” Let’s review Alpha Picks and see how these picks are performing and how they stack up against the competition.

But first, let’s make sure we are all on the same page. What does “ALPHA” mean in the investing world? Simply put, it is the excess return over a benchmark’s return. For example, if stock ABC is up 15% for the year, and the S&P500 is up 12%, then you have 3% excess return and this is your alpha. So investors love ALPHA! Everyone wants to beat the S&P500.

Ok, now that we are all clear on what we are talking about, let’s get back to my review.

I have been investing in the stock market for over 30 years and I have subscribed to dozens of stock picking services. I have been a free member of Seeking Alpha for over 12 years and have grown to like them more and more as I find their analysis more sophisticated and analytical.

So when they launched “Alpha Picks” service on July 1, 2022 I couldn’t resist and I subscribed so that I could share my results with our Wall Street Survivor audience.

Predicting where the stock market is going is… hard. You can stare at charts all day. You can draw trendlines, calculate moving averages, perform technical analysis, consult shamans, sacrifice goats, watch to see if Warren Buffett sees his shadow, etc. 

Many investors prefer to park their money in their 401(k) in mutual funds or hand it over to money managers who may or may not know what they’re doing. There’s nothing wrong with that. Not everyone has the time, expertise, or confidence to take their portfolio into their own hands and make the decisions of what to buy, when to buy it, and then there’s the 3rd decision that everyone forgets about. Now that I own it, when do I sell it?

I, however, don’t hand my money over to mutual funds or pay someone to manage my money. I prefer to BEAT the market by selecting top stocks that will likely outperform the market. And so far, Seeking Alpha’s Alpha PIcks are doing just that!

Alpha Picks Performance as of February, 2023

I’ve been tracking the performance of Seeking Alpha’s Alpha Picks since their launch in July, 2022.

Here’s all the data on their picks:

  • They had 16 picks (6 in July and then 2 each month thereafter) in 2022
  • They have 3 picks in 2023 so far
  • They have not sold any positions
  • Of these 19 stock picks, 13 are profitable and 6 are down for an accuracy rate of 68%
  • The top picks are Nucor (NUE) which is up 69%; MHO which is up 68%, AMR up 30%, BXC up 25%, and VLO up 22%
  • Their worst picks are down 25%, 16% and 11%
  • So are they providing alpha? YES. I can confirm the average return of these 19 picks after just 7 months is 22% vs the S&P500 of 11% so the Alpha Picks are beating the SP500 by 11% in just the first 7 months.

MOST IMPORTANTLY, their 6 oldest ALPHA PICKS from July 2022 are ALL up (69%, +22%, +15%, +20%, +30%, and +55%) with an average return of 30% versus the SP500’s 9% so they are beating the market by 21% in just 7 months!

THAT is exactly what you want. The longer you hold a stocks the better it performs!

I am also a subscriber to the Motley Fool’s Stock Advisor and Rule Breakers. Seeking Alpha PIcks are the clear winner over the same time period.

Remember, to get these results, you should try to buy equal dollar amounts of all their stock picks as they are released. Based on what I have seen so far, starting in 2023, I will be buying about $1,000 of each of their picks as they come out.

If that is all you wanted to know about Seeking Alpha’s Alpha PIcks subscription service and you want to give it a try, make sure you don’t pay full price. To save $100 and try Alpha Picks for a year use THIS PROMO page.

What You Get with Alpha Picks

Hopefully those results got your attention. Now let me introduce you to my newest friend Alpha Picks

Quantitative Easy

Alpha Picks, the newest service from the mad geniuses at Seeking Alpha, is designed specifically for investors looking to turn the market’s noise into actionable insights. 

If you’re familiar with Seeking Alpha, you already know just how much cognitive firepower they bring to the table. If you aren’t familiar with Seeking Alpha, you should be ashamed of yourself here’s a quick overview.

How Seeking Alpha Seeks Alpha

Seeking Alpha is a website, community, and crowdsourced research platform made by and for investors. The site hosts the world’s largest investing community—boasting a staggering 20 million visitors every month—and offers an unprecedented array of analyses, market-specific news, and investing tools that rival those found on Wall Street trading terminals. 

In addition to all of the above, Seeking Alpha is also home to possibly the largest collection of crowdsourced investment analysis. This analysis is written, reviewed, and debated over by professional investors. Some 7,000 well-vetted contributors post over 10,000 investing ideas every month, each of which is reviewed by Seeking Alpha editors to make sure every post meets their quality standards. 

As if that weren’t enough, Seeking Alpha also hosts news, discussions, and data-driven analyses on small-cap stocks, commodities, ETFs, cryptocurrencies, and just about any other security on the market. And if you want to go even deeper, Seeking Alpha’s PREMIUM subscription gives you access to a frankly insane amount of investing ideas, data visualizations, and author, quant, and dividend ratings—plus the ability to track the performance of individual authors. 

In other words: It’s quant heaven. 

Now that you have a sense of where their information is coming from, let’s get back to the reason we’re all here: Alpha Picks.

What Makes Alpha Picks Different

Finding great stocks to buy on Seeking Alpha can be a bit like panning for gold. It can take a while to sift through all the good stuff to get to the truly great, and there’s so much valuable information that the market might have moved on by the time you’re done reading through the research, scanning the charts, and checking out all the discussions. 

If you’re thinking that it’d be great if Seeking Alpha had a service that did all the gold panning for you and just handed you the biggest, shiniest nuggets, guess what: they’re two steps ahead of you. 

Alpha Picks is a subscription service that Seeking Alpha designed for that exact purpose. It takes all the information from the Seeking Alpha Quant model and filters it all down to the two stocks with the biggest potential for positive share price growth every month. 

A lot of stock picking services hide their methodology for any number of reasons—to build mystique, because they’re afraid someone will steal their proprietary recipe, because they identify with the Wizard of Oz from The Wizard of Oz, etc—but not Alpha picks. Their methodology and stock criteria are fully transparent, and their results speak for themselves. 

But don’t take our word for it. Here’s a quick overview of how Alpha Picks stack up against two of the more prominent stock picking services out there: The Motley Fool and Zacks. 

Alpha Picks Review: Performance

Although they are packaging Alpha Picks as a new product for 2022, Seeking Alpha’s Quant Rating has been picking top stocks for years. With Alpha Picks, you are getting the cream of the crop of their highest rated Quant Stocks. So if you take a look back at how their Top Rated Quant Stocks have performed since 2010, you get this mind-blowing chart:

You don’t have to be a mathematician to appreciate numbers like that. 

Stocks rated as a STRONG BUY by Seeking Alpha’s quant model, when back tested to 2010, had a return of over 470% compared to a 290% return from the S&P500 as a whole. This means Alpha Picks would have outperformed the S&P 500 by 180% over the past 12 years. 

So, if you are seeking ALPHA, then there it is!

And now, Seeking Alpha is making it easy for you to find the best of the best STRONG BUY stocks!

GET ALPHA PICKS EACH MONTH!

CLICK HERE to SAVE $100 and try Alpha Picks for only $99 a year.

Alpha Picks Review: Stock Criteria

To qualify for Alpha Picks, a stock must:

  • Hold a Strong Buy Quant rating for a minimum of 75 days
  • Have a market cap of $500 million or more
  • Be traded as a common stock on standard exchanges
  • Have and maintain a stock price of over $10 per share
  • Have not been previously recommended within at least one year of the time of selection

On the other hand, here is what the competition claims is their stock criteria:

The Motley Fool

To qualify for a recommendation by the Motley Fool, a stock must…

  • No idea

The Motley Fool doesn’t make their stock picking methodology available on their website. Or maybe they do if you pay for their premium services, but who knows?

Zacks

  • Zacks has a list, the Zacks Rank, which rates stocks between 1 (strong buy) to 5 (strong sell). It apparently uses a set of formulas to leverage earnings estimate revisions to predict stock price growth and assigns letter grades (A-F) for any given stocks’ value, growth, and momentum. 
  • The good stuff, the Zacks Rank #1 list, is hidden behind a paywall, but presumably it works much the same as the regular Zacks Rank. 
  • To qualify for the Zacks Rank #1 list, a stock must:
    • Pass some quantitative test 
    • Get good marks on their proprietary equity research reports 
    • Make it through their earnings estimate revisions formulas with a good rating

So essentially Zacks is very similar to the Motley Fool when it comes to concealing their methodology.

Alpha Picks Review: Portfolio Process

Alpha Picks is tailored for investors who like to buy and hold stocks for longer periods of time, and their process reflects that ethos. 

  • One stock is picked on the first trading day and the closest trading day after the 15th of every month 
  • Stocks that have dropped into Sell or Strong Sell territory will be sold at the beginning of each month
  • Stocks that are rated Neutral for over 180 days will also be sold
  • (Simulated) cash generated from dividends and asset sales will be reinvested immediately
  • Stocks that have doubled in price since purchasing gets a Sell or Strong Sell recommendation, though only the initial investment will be sold 
  • A stock will be sold if another Sell or Strong Sell is triggered while the stock has less than twice the value of the initial investment

Pretty straightforward, right? 

The Motley Fool

Once again, the methodology for the Motley Fool’s portfolio process is hidden (possibly behind a paywall). The closest we have is the six-step investing philosophy on their website:

  1. Buy 25+ companies over time
  2. Hold stocks for over five years
  3. Add new savings regularly
  4. Hold through market volatility
  5. Let your winners run
  6. Target long-term returns

Zacks

It’s not entirely clear whether Zacks follows the same portfolio-based model as Alpha Picks and the Motley Fool, though again there may be more clarity hidden behind their paywall. That said, it’s probably safe to assume that their portfolio process, if any, is based on their Zacks #1 Rank list. 

The Motley Fool 

The Motley Fool measures their returns since their inception in 2002 as opposed to 2010 for Alpha Picks, but the timeframes don’t need to be exactly the same to get a sense for their overall performance. 

According to their site, the stocks picked by the Motley Fool have outperformed the market by 3-to-1 over the last 20 years. Their ads and other content on their site make it a bit harder to tell what’s what—one ad says “STOCK ADVISOR VS S&P 500 +400% vs + 128%” which, what?—so let’s go with the 3-to-1 figure. 

Zacks

Zacks’ website says that stocks that Zacks ranks as a #1 Strong Buy have outperformed the S&P 500 by an average of 13.9% each year since they started picking stocks 34 years ago. 

It’s tough to provide an apples-to-apples comparison here, but suffice to say all three services do a good job of beating the market. 

Pricing

Alpha Picks

A subscription to Alpha Picks will net you two top-quality stock recommendations a month for a discounted rate of $99 per year. Its actual (not discounted) price is $199 per year, so you should make sure to take advantage of the discounted rate while you can. 

The Motley Fool

The Motley Fool’s Stock Advisor service is $199 per year, but that’s far from the only service they offer. Their Epic Bundle, which gives you access to Stock Advisor, Rule Breakers, Everlasting Stocks, and Real Estate Winners is $499 per year, and their other services range from $100 for a single stock recommendation to an option called One, which provides full access to all of their services for $13,999 per year. 

Zacks

Zacks’ services range from $249 per year for Zacks Premium, to $495 per year for Zacks Investor Collection and $2,995 per year for Zacks Ultimate, which gives you access to pretty much everything Zacks has to offer. 

Conclusion

There are a lot of quality stock picking services out there, and right now Alpha Picks is beating the all after their first 6 months. Alpha Picks gives you all the research and quantitative excellence that you’ve come to expect from Seeking Alpha, a promising portfolio with transparent and rigorous methodology, and a price point that’ll pay for itself in no time at all.