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Alpha Picks is a new service that is provided by Seeking Alpha.
So, exactly how do the Alpha Picks team pick stocks that they believe have the highest probability of capital appreciation?
Also, how have the stock picks performed so far?
Is it worth getting Alpha Picks?
I have been trying out Alpha Picks and will share with you all the pros and cons of this service, so you can make an informed decision.
Alpha Picks Stock-Picking Methodology
Alpha Picks team does not focus on one specific style of investing, such as ‘value’ or “growth”.
Instead, they look for stocks that are strong on a combination of value, growth, profitability, momentum, and revised forward-looking earnings estimates.
So, they use a data-driven process to identify the most appropriate stock picks from Seeking Alpha Premium’s “Strong Buy” quant recommendations.
If you are not familiar with Seeking Alpha’s Strong Buy Quant Rating, here’s a recap.
“Strong Buy” Quant Rating was developed by CressCap, a quantitative analytics and data platform that was acquired by Seeking Alpha.
So, what exactly is Quant Rating, and also how does it work?
Quant rating is derived by comparing over 100 metrics for the stock to the same metrics for the other stocks in its sector.
These metrics include the company’s financial data, stock price performance, and analysts’ estimates of future revenue and earnings.
There are five types of Quant ratings:
- Strong Sell (i.e. a score of 1)
- Sell (i.e. a score of 2)
- Hold (i.e. a score of 3)
- Buy (i.e. a score of 4)
- Strong Buy (i.e. a score of 5)
The advantage of this method is that you can use Quant Rating to find the best performer of any particular industry or sector.
So, how exactly is Quant Rating calculated?
Quant Rating is derived after taking into account the following five “Factor Grades”:
- Value
- Growth
- Profitability
- Momentum
- EPS Revisions
The Factor Grade is determined by comparing the relevant metrics for the factor for the stock to those for the other stocks in the same sector.
For example, to determine the grade for the “Growth” factor, metrics such as past sales growth, projected earnings growth, and stock price performance for the stock will be compared to the same metrics for the other stocks in the same sector.
Then, each factor is assigned a grade, from A+ to F.
Grade A+ means that the stock has the highest growth potential compared to its peers in the same sector.
On the other hand, a grade of F means that the stock has the lowest growth potential compared to its peers in the same sector.
To be assigned a “Strong Buy” rating, all the Factor Grades do not have to be A+.
But, I would love to see a “Strong Buy” stock with all the Factor Grades being A or A+ because I think it would have the highest probability of price appreciation.
For example, Abercrombie & Fitch Co. was recommended by Alpha Picks on 2nd Oct 2023.
It has a “Strong Buy” Quant Rating of 4.95.
For each Factor Grade, you can see that its “Growth”,”Momentum” and “Earnings Estimate Revision” are all A.
Although the Factor Grade for “Valuation” is D, its Quant Rating is still “Strong Buy” because the weighting assigned to each Factor Grade in the Quant Rating is different.
Here’s the price chart of Abercrombie & Fitch Co.
It went up by almost 70% after Alpha Picks recommended it.
To meet “Buy” criteria, it must meet the following criteria:
- ‘Strong Buy’ quant rating for at least 75 consecutive days
- A U.S. Common Stock (i.e. No ADRs)
- Is not a REIT
- Has a 3-month average market capitalization greater than $500M
- Has a stock price greater than $10
- Has not been recommended in the past 1 year.
They pick two “Strong Buy” rated stocks per month (one on the first trading day of the month and the other on the 15th of the month).
They aim to hold these position for at least one year.
When it is time to sell, subscribers will be alerted.
The criteria for selling a stock is when any of the following happens:
- The rating falls to ‘Sell’ or ‘Strong Sell’
- The company announces an M&A event in which it is the target, or it announces a merger of equals
However, if the rating of a stock falls to “Hold” and remains there for 180 consecutive days, they will sell part of their position to get back the initial investment and then keep the remainder of the position in the portfolio.
Alpha Picks Stock Picks & Performance
Alpha Picks was started on 1st July 2022.
Below is the performance of Alpha Picks vs S&P 500 as of April 2024 since 1st July 2022.
The total return of Alpha Picks’ portfolio is 120.27% compared to the S&P 500’s total return of 35.50% over the same time period.
Disclaimer: Past performance is no guarantee of future results – any investment carries a potential for loss.
Here’s the performance of individual stock picks as of April 2024.
| Alpha Picks | Alpha Picks Return | S&P Return |
| 15 April 2024 stock pick | -2.29% | -2.05% |
| 1 April 2024 stock pick | -12.16% | -3.70% |
| 15 March 2024 stock pick | -1.23% | -1.13% |
| 1 March 2024 stock pick | -6.07% | -0.58% |
| 15 Feb 2024 stock pick | 5.45% | 1.35% |
| 1 Feb 2024 stock pick | -17.76% | 4.41% |
| 16 Jan 2024 stock pick | 0.57% | 6.47% |
| 2 Jan 2024 stock pick | 51.85% | 7.17% |
| 15 Dec 2023 stock pick | -6.60% | 7.78% |
| 1 Dec 2023 stock pick | -5.35% | 11.47% |
| 15 Nov 2023 stock pick | 68.31% | 12.88% |
| 1 Nov 2023 stock pick | 34.04% | 21.20% |
| 16 Oct 2023 stock pick | 62.45% | 17.12% |
| 2 Oct 2023 stock pick | 98.14% | 19.09% |
| 15 Sep 2023 stock pick | 11.94% | 13.63% |
| 1 Sep 2023 stock pick | 12.66% | 12.51% |
| 15 Aug 2023 stock pick | 63.57% | 14.25% |
| 1 Aug 2023 stock pick | 60.84% | 11.75% |
| 17 July 2023 stock pick | -4.21% | 13.52% |
| 3 July 2023 stock pick | -30.59% | 15.11% |
| 15 June 2023 stock pick | 31% | 17.22% |
| 1 June 2023 stock pick | 95.26% | 22.49% |
| 15 May 2023 stock pick | 134.45% | 24.19% |
| 1 May 2023 stock pick | 41.44% | 23.12% |
| 17 April 2023 stock pick(closed) | -7.30% | 21.10% |
| 3 April 2023 stock pick(closed) | 8.38% | 20.44% |
| 15 March 2023 stock pick (closed) | -30.63% | 29.78% |
| 1 March 2023 stock pick | -9.69% | 29.96% |
| 15 Feb 2023 stock pick | 48.36% | 25.17% |
| 1 Feb 2023 stock pick(closed) | 8.20% | 16.55% |
| 16 Jan 2023 stock pick | 29.80% | 26.59% |
| 3 Jan 2023 stock pick | 79.01% | 31.24% |
| 15 Dec 2022 stock pick | 340.80% | 27.94% |
| 1 Dec 2022 stock pick | -6.49% | 23.41% |
| 15 Nov 2022 stock pick | 935.48% | 25.75% |
| 1 Nov 2022 stock pick(closed) | -31.79% | 15.53% |
| 17 Oct 2022 stock pick(closed) | 1.91% | 33.90% |
| 3 Oct 2022 stock pick | 212.97% | 39.71% |
| 15 Sep 2022 stock pick (closed) | -30.9% | 6.89% |
| 1 Sep 2022 stock pick(closed) | 0.09% | 4.76% |
| 15 Aug 2022 stock pick (closed) | 56.87% | -3.88% |
| 1 Aug 2022 stock pick(closed) | 0.21% | 2.76% |
| 15 July 2022 stock pick | 57.86% | 31.87% |
| 1 July 2022 stock pick(closed) | 59.87% | 20.62% |
| 1 July 2022 (#4 stock pick)* | 58.34% | 33.96% |
| 1 July 2022 (#3 stock pick)* | 22.79% | 33.96% |
| 1 July 2022(closed) (#2 stock pick)* | 30.25% | 21.22% |
| 1 July 2022 (#1 stock pick)* | 164.22% | 33.96% |
[Note: *On 1st July 2022, there were four stock picks because Alpha Picks started on this date.]
As you can see above, the biggest gain from Alpha Picks is 935.48% while the biggest loss is -31.79 %.
The potential gain could be higher than the S&P 500 index, but it comes with higher volatility as well.
The best-performing Alpha pick is SMCI, which is up more than 1,000% since it was recommended in Nov 2022.
Let’s take a look at some of its stock picks.
One of Alpha Picks’ recent stock picks is Manulife Financial Corporation.
When you get the stock picks, you will also be able to see the Alpha Picks team’s analysis behind this stock recommendation.
It has several parts:
- Business Overview
- Our Buy Thesis
- Business Growth & Profitability
- Financial Valuation
- Potential Risks
Alpha Picks Pricing
So, how much does Alpha Picks cost?
Usually, it costs $499/ year.
Right now, you can get a limited-time special discount of $50 through this link Alpha Picks.
Is it worth getting Alpha Picks?
If you don’t have the time to do your own research and find stock ideas, you could give Alpha Picks a try.
But, if you are an active investor, I think you could go for Seeking Alpha Premium because you get full access to all the “Strong Buy” quant rating stocks as well as all the tools necessary to do research and analysis on the stocks that interest you.
Alpha Picks Vs Seeking Alpha Premium
What is the difference between Alpha Picks and Seeking Alpha Premium?
Alpha Picks is a stock picking service where you get two stock picks every month selected from the “Strong Buy” quant rating stocks.
On the other hand, Seeking Alpha Premium is a stock research and analysis platform where you get access to all the financial data, charts, analysts’ ratings, competitor analysis, Seeking Alpha Authors’ stock analysis, portfolio tracking tools, and also the list of “Strong Buy” quant rating stocks.
With Seeking Alpha Premium, you will be able to see what stock picks could be picked for Alpha Picks every month.
So, if you have a lot of time to do research and find stock ideas yourself, then Seeking Alpha Premium is good enough for you.
But, if you want specific stock recommendations, then you could give Alpha Picks a try.
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