Motley Fool Vs Seeking Alpha: Which Is Better For You? (2024)

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Are you deciding which is better, Motley Fool or Seeking Alpha?

So, what are the key differences between Motley Fool and Seeking Alpha?

Also, can they really help you make better investment decisions?

And how do you actually decide which one is more suitable for you?

Motley Fool Vs Seeking Alpha: Company Background

First of all, let’s look at the history of both the Motley Fool and Seeking Alpha.

Founded in 2004, Seeking Alpha is a crowd-sourced content service for financial markets, with thousands of contributors publishing investing ideas every month.

Anyone can apply to be a contributor through its website.

So far, tens of thousands of people have contributed articles to Seeking Alpha.

These contributors include individuals, institutional investors, fund managers, college students, analysts, and retirees who want to share their investment insight with the Seeking Alpha community.

The articles on Seeking Alpha, written by contributors, cover a wide range of investment asset types from stocks and ETFs to commodities and cryptocurrencies.

On the other hand, the Motley Fool is a financial publisher that has been around for almost 30 years.

As of 2023, The Motley Fool has operations in the United Kingdom, Australia, Canada, Germany, Hong Kong, and Japan.

Motley Fool is regarded as one of the leading financial websites for stock research and analysis.

All the articles on Motley Fool come from its team of professional investment analysts.

Both Motley Fool and Seeking Alpha not only provide free stock market news and stock analysis, but they also provide paid services.

Motley Fool vs. Seeking Alpha: Investment Service

Seeking Alpha Premium

Let’s first take a look at Seeking Alpha.

Seeking Alpha offers two types of paid investment services:

• Seeking Alpha PREMIUM
• Seeking Alpha PRO

So, what do they include?

And, what is the difference between Seeking Alpha PREMIUM and PRO?

As a Seeking Alpha Premium member, you get access to unlimited premium articles, stock ratings and lists of top stocks to buy now.

On the other hand, Seeking Alpha PRO includes all PREMIUM features as well as Top Ideas from top-performing authors, exclusive access to short ideas, VIP service, and an ad-free experience.

The most unique feature is Seeking Alpha’s stock ratings.

There are three types of stock ratings offered by Seeking Alpha:

• Quant Rating
• Seeking Alpha Authors Rating (i.e. ratings given by Seeking Alpha article contributors)
• Wall Street Rating (i.e. ratings given by Wall Street equity analysts)

The most interesting of all is its proprietary quant rating.

It was developed by CressCap, a quantitative analytics and data platform that was acquired by Seeking Alpha.

So, what exactly is Quant Rating, and how does it really 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.

Essentially, the Quant rating evaluates the stock in relation to its peers in the same sector, not the rest of the stock market as a whole.

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.

So, how do you use Seeking Alpha’s Factor Grades?

The value, growth, and profitability grades give you a snapshot of the stock’s fundamentals, while the momentum and EPS revisions grades tell you if the stock is gaining momentum.

So, if you are looking for value stocks, you just filter out all the stocks with a “Value” Grade of A or A+.

After that, you further research and analyze these value stocks one by one.

The advantage of Factor Grade is that you get a very quick idea of what type of stock it is. (e.g. a value stock? a growth stock? momentum stock?)

Below is an example of what you will see inside Seeking Alpha Premium.

Seeking Alpha’s Quant Rating updates once a day before the market open.

Also, its Quant Ratings and Factor Grades currently cover about 5,600 stocks.

Just to summarize, Seeking Alpha Premium is a powerful stock market research and analysis platform where you can discover new good stock ideas and also help you research your stocks.

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Motley Fool Stock Advisor

Now, let’s look at the Motley Fool’s services.

The Motley Fool provides a wide range of stock-picking services.

One of its most popular stock-picking services is Motley Fool Stock Advisor.

Motley Fool Stock Advisor is designed to help you find good companies that offer long-term potential for investors.

Its investment philosophy is to play the long game.

So, they recommend you buy at least 25 stocks and hold them for at least 3 to 5 years.

In essence, you get stock recommendations that not only tell you when to buy but also when to sell.

With that, let’s take a closer look at the performance of Motley Fool Stock Advisor and compare it with that of Seeking Alpha Premium.

Motley Fool vs. Seeking Alpha: Performance

First of all, let’s take a look at their track record as of 26 June 2024.

Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 26 June 2024.

As of 26 June 2024, average Motley Fool Stock Advisor recommendations have returned over 756% since inception while the S&P 500 has returned 161%.

In short, the Motley Fool Stock Advisor has outperformed the market 4 to 1.

But, what about its individual stock picks?

Below is a table that shows you the performance of individual stock picks over the years.

As of 6th September 2023, Motley Fool Stock Advisor has had 173 stock recommendations with 100%+ returns.

[Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

Will the Motley Fool Stock Advisor always be right about their stock recommendations?

No, because no one can be right about their stock picks 100% of the time.

Let me sidetrack a bit here.

If any stock picking service tells you that they have a close to 100% success rate on their stock picks and can guarantee you high investment returns, you should definitely stay away.

Even Warren Buffet has loss-making stocks in his portfolio, but he still achieves above-average returns because a few big gainers in the portfolio can make up for the under-performers.

What I like about the Motley Fool Stock Advisor is that they are very open and transparent about their bad investments.

As a member, I can see the performance of ALL its past and current stock recommendations (even for closed positions).

Some other stock-picking services that I’ve tried, don’t publish the performance of all their past and current stock recommendations, so it’s not easy for you to find out their true track record.

So, if you are thinking of getting into stock investing, I highly recommend the Motley Fool Stock Advisor because I think there are a lot of well-researched stock recommendations with long-term growth potential.

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Now, what about Seeking Alpha’s track record?

In June 2019, Seeking Alpha launched Quant Rating which rates stocks from Strong Buy to Strong Sell.

On its website, it published the backtesting results of a hypothetical portfolio consisting of all the daily “Strong Buy” recommendations from 31 Dec 2009 to Jan 2022.

Here’s what happens in the backtest.

It assumes that you buy all the daily “Strong Buy” stock picks with equal weighting and re-balances it on a daily basis with zero transaction costs.

The stocks are sold right after it’s no longer rated “Strong Buy”.

So, what is the backtesting result of this strategy?

From 2010 to March 2024 (as of my writing), Seeking Alpha Strong Buy achieved a total return of $245,380 based on $10,000 in investment capital while the S&P 500 achieved a total return of $51,032.

[Note: Past performance is no guarantee of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to corresponding past performance levels.]

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Motley Fool vs. Seeking Alpha: Pricing

Now, let’s take a look at the pricing comparison between Motley Fool and Seeking Alpha.

So, how much does Motley Fool Stock Advisor cost?

Before that, let’s first look at what you get from your Motley Fool Stock Advisor subscription:

• You will receive two stock recommendations every month (one stock recommendation on the first Thursday and the other one on the third Thursday of the month). Each new stock recommendation comes with a full analysis of the opportunities and risks
• The current Top 10 Favorite Investment Opportunities are released on the second Thursday of every month
• 10 Foundational Stocks for new investors (regularly updated)
• 5 Exchange-Traded-Funds
• You will receive a real-time email notification when it’s time to sell, so you are never left wondering what to do
• You gain instant access to all past Motley Fool’s Stock Advisor recommendations

So, how much does Motley Fool Stock Advisor cost?

Its annual membership is only priced at $199 a year.

Right now, there’s a special limited-time 50% OFF offer* for new members for the first year when you click the link here to try it out for 30 days with a Membership-Fee-Back Guarantee. (*Billed annually. Introductory price for the first year for new members only. First-year bills at $89 and renews at $199)

So, for $99 a year- that’s just $1.80 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.

Now, how much does Seeking Alpha Premium cost?

• Basic: Free
• Seeking Alpha Premium: $239/year $189/year

As you can see, both are quite affordably priced.

Personally, I have been using Motley Fool Stock Advisor and Rule Breakers for years.

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Which One Is Better For You?

So, how do you choose between Motley Fool and Seeking Alpha?

I have been using Seeking Alpha Premium as well.

It’s very different from Motley Fool because you can use Seeking Alpha Premium stock ratings, stock financial and fundamental data as well as experts’ stock analysis to do further research on potential stock ideas.

Seeking Alpha Premium is more suitable for stock investors who are more active and prefer to do their own research and analysis.

If you are an active investor who is looking for a stock research and analysis platform to help you find new investment ideas as well as evaluate your investment decisions, then Seeking Alpha Premium might be a good option.

However, if you are an investor who wants stock recommendations and analysis for long-term investments, then I highly recommend Motley Fool Stock Advisor.

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