Motley Fool Vs Zacks Premium: Which One Is Better? [2022]

So, what is Motley Fool?

Motley Fool is one of the leading stock research and analysis websites in the world.

It was founded by two brothers, David Gardner, and Tom Gardner.

So, who are David Gardner and Tom Gardner?

They both started investing at a very young age and have decades of experience in stock investing.

Also, they are best-selling authors of several investment books.

Motley Fool not only provides a lot of free stock market analysis but also offers a number of premium investment advisory services.

Two of its most popular stock investing newsletter subscriptions are “Motley Fool Stock Advisor” and ” Motley Fool Rule Breakers”.

Unlike Zacks Premium which is mostly about short-term stock trading picks, Motley Fool is specifically focused on offering long-term stock picks.

So, what investment strategy does Motley Fool use to pick their stocks?

The Motley Fool believes that you should only “invest in great businesses, not stock tickers“, especially great businesses that have huge growth potential and are poised to be the market leader in the future.

Here are just some of the criteria that they look at:

• Sustainable competitive advantage over its competitors (i.e. powerful branding, patents, cost leadership, unduplicable distribution systems, etc)
• Dominate the industry (i.e. it has a significant market share in the industry)
• Strong management team (i.e. the management team of the company must be competent and experienced)
• Good financials (i.e the company is in very good financial health with strong earnings, positive cash flow, and relatively low debt)

Between them, there is a slight difference in investment style.

Stock Advisor: It’s more about recommending companies that are fundamentally strong and it’s currently being undervalued.

Generally, these value stocks are more stable and less volatile, and their stock prices go up steadily over time.

Rule Breakers: It’s more about recommending high-growth companies that are in the emerging industries and have huge growth potential to become the next market leader.  (Think Amazon and Netflix 10 years ago)

Generally, high-growth stocks are more volatile, but their potential returns will be much greater than value stocks in the long term.

Now, let’s take a look at their track record as of Jun 2022.

Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 2nd June 2022.

 

As of 2nd June 2022, average Motley Fool Stock Advisor recommendations have returned over 357% since inception while S&P 500 has returned 123%.

In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.

That’s a HUGE difference in returns.

Now, what about the performance comparison between Motley Fool Stock Advisor and S&P 500 for the past 5 years?

Year	Motley Fool Stock Advisor (Average Return to  31st Dec 2021)	S&P 500 (Average Return to 31st Dec 2021)
2016	402%*	142%*
2017	259%*	110%*
2018	217%*	83%*
2019	85%*	71%*
2020	73%*	53%*
2021	-8%*	13%*

So, in terms of overall performance, the Motley Fool Stock Advisor has outperformed the market almost every single year for the past 6 years. (Note: Performance is calculated till 31st Dec 2021)

[*Returns as of 31st Dec 2021. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

But, what about its individual stock picks?

This metric is important because you might not be buying every single stock recommendation made by Stock Advisor.

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

As of May 2022, Motley Fool Stock Advisor has had 171 stock recommendations with 100%+returns.

What that means is that you would have easily doubled your money if you had invested in any of the 171 stock picks by Motley Fool Stock Advisor.

Here are just some of their best-performing stock picks:

• Amazon: it’s up 19,806%*
• Netflix: it’s up 23,901%*
• Walt Disney: it’s up 632%*
• NVIDIA: it’s up 16,423%*
• Shopify: it is up 4,107%*
• United Health Group: it is up 2,338 %*

[*Returns as of 31st Dec 2021. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

Just imagine that you actually found out about these great stocks way before everyone else did.

So, what do you actually get when you subscribe to Motley Fool Stock Advisor?

Below is what you will get:

• You will receive two stock recommendations every month, as well as their monthly “Best Buys Now”:
  • On  the first Thursday of the month, you will receive a new stock recommendation
  • On the second Thursday, you will receive 5 New Best Buys Now
  • On the third Thursday, you will receive another new stock recommendation
  • and on the fourth Thursday, you will receive another 5 New Best Buys Now
• You will receive timely updates on all the stock picks as well as 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
• You gain instant access to all of their stock reports
• The Motley Fool’s Top 10 Best Stock to Buy Right Now (which features some of their recent picks that still offer the best potential return).
• The Motley Fool’s Top 5 Starter Stock (which features the ideal stocks that should be the foundation of any new investor’s portfolio.)

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 discount of 60% OFF on the annual membership for NEW members only. 

That means you could get the annual membership at $89 per year instead of the usual $199 per year when you click the link here to try it out for 30 days 100% risk-free.

So, for $79 a year- that’s just $1.50 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.

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Zacks Premium Vs Motley Fool Stock Advisor

So, which one is better for you, Zacks Premium or Motley Fool Stock Advisor?

In terms of stock advice, Zacks Premium offers Zacks Rank #1 stocks which are good for short-term stock trading (i.e. it can be used to help you predict the price movement for the next 1 to 3 months).

Basically, these are NOT specific stock trading picks with entry price, exit price, and cut loss point.

It’s just a tool (i.e. Zacks Rank) that you can use to help with your own stock trading analysis.

On the other hand, Motley Fool Stock Advisor offers you specific stock picks for long-term investment (i.e. hold the stocks for at least 1 to 3 years) with detailed research reports which outline the reason behind the recommendation.

For all the Motley Fool stock picks, they will send you real-time updates on the stocks whenever there is any news as well as real-time alerts when they think it is time to sell.

So, you won’t be left wondering what to do after you decide to follow their stock recommendation.

In terms of stock-picking strategy, Zacks essentially uses a single indicator called ” Earnings estimate revisions” and a mathematical formula to calculate the stock rank.

On the other hand, Motley Fool Stock Advisor uses a time-tested investment strategy with strict stock selection criteria to make stock recommendations.

In terms of track record, Motley Fool has a very impressive track record.

As of 4th Feb 2022, average Motley Fool Stock Advisor recommendations have returned over 502.5% since inception while S&P 500 has returned 136.5%.

For Zacks Premium, it says that it has more than doubled the S&P 500 with an average gain of +25.4% per year from January 1, 1988 to January 3rd, 2022 with Zacks  #1 Rank stock list.

Personally, I find this claim a bit confusing.

First of all, let’s say its subscribers buy the stocks immediately the minute it appears on the Zacks #1 Rank.

Then, when do they sell the stock?

Do they sell it immediately when it gets kicked out of Zacks #1 rank, or when it appears on Zacks #5 Rank (strong sell)?

So, what I feel is that Zacks Rank is more of a tool than specific stock picks with clear buy and sell recommendations.

At the end of the day, you need to decide whether you can get a lot of value out of this tool because this is essentially what Zacks Premium is offering.

Although you also get things like a Focus List of 50 stocks selected by Zack’s Director of Research Sheraz Mian, I don’t really fancy this because I don’t even know this guy and his track record.

In terms of pricing, Zacks Premium is charging you $249 a year with a free 30-day trial.

For Motley Fool Stock Advisor, its annual plan is $199 per year.

What’s more, right now there’s a special discount of 60% OFF on the annual membership for NEW members. 

That means you could get the annual membership at $79 per year instead of the usual $199 per year when you click the link here to try it out for 30 days 100% risk-free.

So, for $79 a year- that’s just $1.50 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.

Try out  Motley Fool Stock Advisor For 30 Days 100% Risk-Free Now

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Conclusion

So, to sum it up, if you are a stock trader (i.e. buy and sell stocks frequently and hold the stock for a very short period of time), then you might find Zacks Rank useful in your stock trading analysis.

But, if you are investing for the long term and are looking for good stock recommendations with a proven track record, then I would recommend Motley Fool Stock Advisor.

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