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 what they call their “proprietary, data-driven computer scoring system.” While that may sound interesting, it doesn’t tell us a whole lot.
So let’s review Alpha Picks and see what really matters: How are these picks performing, are they really generating alpha, and how they stack up against the competition?
Alpha Picks Update as of November 25, 2023: Since its launch in July, 2022, the average return of all the Alpha Picks is beating the S&P500's return by 14.6%. But most impressively, for their picks that are at least 12 months old, those Alpha Picks are up 49.6% vs 15.3% for 34.3% ALPHA and 86% of those picks are profitable. This includes AMR up 122%, NUE up 60%, MHO up 186%, SMCI up 235% and MOD up 152%. Their biggest loser is down 32%. See our full Seeking Alpha Picks Review for further analysis.
But before I start this review, 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 over the years. In fact, right now, I am a subscriber to Seeking Alpha Premium, Alpha Picks, Motley Fool Stock Advisor, Rule Breakers, Real Estate Advisor, Everlasting Stocks, Zacks Premium, Zacks Home Run Investor, Zacks Top 10 Stocks, Jim Cramer, and 3 Bernie Schaeffer’s options services.
Of all these that I subscribe to, Alpha Picks has had the best performance since its launch in July, 2022. Read on to see the details.
My Results with Alpha Picks
I had been a free member of Seeking Alpha for over 12 years and signed up for Seeking Alpha Premium in 2020 and have grown to like them more and more as I find their quant rating analysis to be a good indicator for future stock performance.
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 my 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 put 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 November 18, 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 21 picks in 2023 so far
- Of these 37 stock picks, THEY ARE DEFINITELY PROVIDING ALPHA as they, on average, are beating the S&P500 by 14.8%
- More importantly, of those 14 picks that are at least 12 months old, they are beating the S&P500 by 33.7% and 12 (86%) are profitable
- The top picks are Super Micro Computer (SMCI) which is up 239%, (MHO) which is up 182%; MOD up 145%, AMR up 111%, TA closed position at 57% profit, Nucor (NUE) which is up 60%, POWL up 57%.
- They have sold 7 positions. TravelCenters TA was acquired in February 2023 for a 56.8% gain after they picked it in August 2022; they sold CVX with a 1% profit, COP with a 30% profit, NUE with a 60% profit, and both LTHM and HLIT with 32% losses.
- Since inception, 76% of the stock picks have been profitable.
MOST IMPORTANTLY, of the 14 stocks that are at least 12 months old, 12 are up and the average return is 48.5% which is beating the S&P500 by 33.7%.
THAT is exactly what you want from Alpha Picks. The longer you hold a stock the better it performs!
Remember, to get these results, you should try to buy equal dollar amounts of all the Seeking Alpha Alpha Picks stocks 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.
As I mentioned, I am also a subscriber to the Motley Fool’s Stock Advisor and Rule Breakers. Alpha Picks’ return is the clear winner over the same time period as the Stock Advisor picks are up 3% and Rule Breakers picks are up 9% since July, 2022.
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 Seeking Alpha PROMO page.
If you want more details, then please keep reading.
What You Get with Alpha Picks
Hopefully those results got your attention. Now let me dive into the details about newest best friend Alpha Picks:
Alpha Picks, the newest service from Seeking Alpha, is designed to make investing easy! It is specifically for investors that don’t have the time to research stocks but rather just want to be told which stocks have the highest rating each month.
This service is for buy-and-hold investors. It is not for day traders. It is not for swing traders.
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.
Here’s what you need to know about their Quant model:
- It is Backtested:
- Backtested from 12/31/2010 to 5/15/2022
- Portfolio compounded monthly with a start of $10,000 and $1,000 added monthly
- Holding purchased in equal weights and rebalanced
- Stock Criteria:
- Each stock hold a Strong Buy Quant rating for at least 75 days
- Market cap greater than $500 Million
- Stock price greater than $10
- Portfolio Process
- One new pick the first trading day of the month; second pick on or after the 15th
- Stocks will be sold when they become rated a Sell or Strong Sell, or remain Neutral for 180 days
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 2 ALPHA PICKS EACH MONTH
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…
- They don’t specify any selection criteria.
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 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:
- Buy 25+ companies over time
- Hold stocks for over five years
- Add new savings regularly
- Hold through market volatility
- Let your winners run
- Target long-term returns
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’ 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.
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. I subscribe to their Epic Bundle (see my Epic Bundle Review), 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’ 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.
Is Seeking Alpha Legit?
Seeking Alpha has over 20,000,000 people using the site each month and over 7,000 contributors posting their research. Their Quant Rating is an excellent predictor of stock appreciation. Their 2 paid services, Premium and Alpha Picks, are very affordable.
Is Seeking Alpha Picks Worth It?
Seeking Alpha’s newest service, Alpha Picks, is definitely worth it. The performance for stock picks at least 12 months old so far is beating the S&P500 by over 30% and 86% of their stock picks have been profitable. The service is also very affordable, currently priced at just $99 a year for new subscribers.
Is Alpha Picks Any Good?
Given that 86% of Alpha Picks have been profitable and that the average return is 33.7% versus the market’s 14.8%, they are definitely providing ALPHA.
There are a lot of quality stock picking services out there, and right now Alpha Picks is beating them all after their first 7 months. Alpha Picks makes investing easy. They give you 2 of their best rated picks each month, and all the research and quantitative excellence to support those picks.
At their current price promotion of just $99 for a year, you really have nothing to lose. Just remember, do what I am doing now—I buy about $1,000 of EACH of their picks.
Their picks come out the first and 3rd week of each month.
There are even more services out there that recommend stocks for your portfolio that could potentially double or even triple in value. To learn more, check out our article on the Best Stocks to Buy Now!