One of the most difficult jobs for any individual stock investor is picking stocks to invest in. But you can make this job much easier by working with a good stock picking service.
But putting your trust in a stock picking service can be risky. How do you know if they are any good? This is why we put together this guide.
We’ve narrowed the list down to five that we believe to be the best stock picking services. This is based on several factors, including investor acceptance of the service, longevity, and the credibility of the provider in the financial community. We also considered price, payment options, and other services offered by each.
Based on that criteria, we’ve selected three that we believe will be good choices for buy-and-hold investors, as well as one for day traders and another for investors looking to hit home runs investing in penny stocks.
Be sure to select the service that will work best with your own personal investment style and goals.
Table of Contents
Why Use a Stock Picking Service?
The main reason to use a stock picking service is to help you choose what stocks to invest in (ok, duh). You still have to decide for yourself and do additional research, but a stock picking service can help limit your choices so you aren’t looking at the entire stock market.
As you’d expect, if you invest in individual stocks, this is the most important part of your overall investment strategy.
That isn’t to say that every stock provided by a stock picking service should be a buy. Instead, you should use the stock-picking service recommendations as a starting point. A filter, so to speak.
Once you’ve assembled a list of stocks to potentially buy, it’ll be time to do your own research. Sure, a company may be recommended by a stock picking service or even several. But that doesn’t necessarily mean it belongs in your portfolio.
You’ll still need to consider where a particular company fits in your portfolio. For example, if another technology stock is recommended, and you already have 25% of your portfolio in tech stocks, you may not want to invest in the last recommendation because it would make your allocation too heavy in tech.
You’ll also need to do a deep dive into exactly what the company does and what its future prospects are. It’ll be important to also do some analysis on the company’s financials and that’s where a tool like TipRanks, which aggregates analyst recommendations and other data, can come in handy.
For example, you’ll need to know the company’s track record of revenue growth. Profit growth is important as well, but many upstart companies recommended may not be profitable in the early going. Still, you’ll need to have an idea of when management expects it to become profitable.
Obviously, stock picking services are designed for those who purchase individual stocks, and especially those who hope to beat the market. They won’t be of much value to fund investors, since each fund manager handles the job of stock selection as part of the service.
What to Look for in a Stock Picking Service
All stock picking services provide recommendations. But you need to know how previous recommendations have played out. The service should provide a list of previous recommendations so you can determine how successful they’ve been.
The success should be measured against a common benchmark, like the S&P 500 index. If a group of recommendations from a stock-picking service has done no better than match the performance of the S&P 500 – or worse, underperformed it – the service is not worth having.
You should also look closely at additional services offered. For example, some of the services we’ve reviewed below include other features, like stock screeners, updated information on previous recommendations, and even specializations in certain sectors.
Finally, there’s cost – you knew that would be in there somewhere. Exactly how you’ll approach this will depend on the size of your portfolio, and exactly what you expect the stock picking service to do for you.
If you have a $20,000 or $30,000 portfolio, you probably won’t want to pay $2,000 per year for the service. But if your portfolio is in the $200,000 to $300,000 range or higher, that may be a reasonable fee to pay.
You’ll need to evaluate the benefit-to-cost ratio. If it seems clear the service is likely to enable you to outperform the general market, a higher fee may be justified.
In most cases, the only way to find out if a service will work for you is to try it for a while. You might plan to sign up for the service for one year and see how it works. If it performs as expected, you can renew it for as long as you’re satisfied with the service.
Now let’s get into our picks for the best stock picking services.
Morningstar isn’t just a stock-picking service, but a full-blown financial services company. It’s one of the top investment research firms in the world, so much that it’s routinely quoted by other investment services. The company was founded in 1984 and has more than $220 billion in assets under management.
Morningstar’s investment ratings and valuations are provided by more than 150 analysts. They’ve assembled some of the most popular investment screeners to help you find undervalued stocks and portfolio anchors. But you can also monitor existing investments with comprehensive overviews designed to keep you informed about the strengths and weaknesses of both the companies you already hold and those you hope to buy.
Morningstar provides mutual fund, stock, and exchange-traded fund (ETFs) ratings, as well as in-depth reports and ongoing analyses from the panel of independent analysts.
In analyzing stocks and funds, Morningstar uses a rating system. Securities are rated based on stars, with one star being the lowest and five stars being the most highly recommended investments.
Morningstar Basic vs. Premium
Basic is a free version. It will give you access to analyst reports, Morningstar’s top investment picks, and limited access to their Portfolio Manager, Portfolio X-Ray, and the many screeners they offer.
Morningstar Premium is a paid subscription, providing analysts reports, top investment picks, Portfolio Manager, Portfolio X-Ray, screeners, and the company’s article archive. Here’s our full review of Morningstar Premium.
The Portfolio Manager helps you track your individual investments, create watch lists, and evaluate your strategy. Meanwhile, the Portfolio X-Ray evaluates asset allocation and sector weights. It’ll alert you if you are too heavily concentrated in a particular stock or sector, which can be difficult to determine if you hold ETFs and mutual funds.
The Premium plan has three subscription plans, which are discounted if you use the Wallet Hacks Morningstar Premium Discount Promotion Code.
Using the code, the subscription fees are:
- One year, $169, or $14.08 per month.
- Two years, $279, or $11.63 per month.
- Three years, $349, or $9.69 per month.
The subscription comes with a 14-day free trial to allow you to see if the service will work for you.
The Motley Fool Stock Advisor
The Motley Fool was founded in 1993 and has since grown to become one of the most widely quoted investment sources. It has over 700,000 newsletter subscribers.
The Motley Fool Stock Advisor makes direct stock recommendations and appears to have a good track record of doing so. When you sign up for the service, you’ll be provided with two new stock recommendations. Each month, you’ll receive new recommendations, each with an in-depth analysis of both why the company is a buy and what the potential risks are.
The company claims the results on The Motley Fool Stock Advisor since its launch in 2002 has outperformed the S&P 500 Index by nearly 5-to-1. Some of their past recommendations include Amazon, Shopify, Zoom, PayPal, and Costco.
The service also provides a Best Buys Now feature, with weekly updates of what they believed to be the 10 best recommendations to buy now. And if you’re a new investor, they also publish a Starter Stocks list, which includes 10 stocks they recommend for beginners.
The Motley Fool Stock Advisor also comes with a stock screener, performance tracking, video interviews with the Motley Fool team, and exclusive special reports on up-and-coming investments. They also offer The Motley Fool community, which includes discussion boards on various investment topics, as well as swapping investment strategies.
Motley Fool Stock Advisor Pricing
The Motley Fool Stock Advisor is a premium service. You can sign up with a subscription fee of $79 for the first year, which is more than half off the regular subscription price. It also includes a 30-day free trial so you can test drive the service.
*Billed annually. Introductory price for the first year for new members only. First year bills at $79 and renews at $199.
After the first year, you can renew your subscription at the regular rate of $199 per year. However, the company has been known to offer a $50 discount if you renew early.
Seeking Alpha is one of the best platforms for finding investments ideas and research stocks or funds in the same place.
Some of the best features include:
- Research articles: Read bullish and bearish articles about individual stocks and ETFs. You can also follow a particular company or author.
- Stock ratings: View ratings for several fundamental and technical factors. The exclusive Quant Ratings assign a bullish or bearish score that can be more in-depth than an analyst rating.
- Stock screener: Filter stocks and ETFs by a factor or other investment strategies.
- Investment ideas: See the top-rated stocks by a factor or a particular strategy.
- Newsletters: You can subscribe to several free publications that can provide market commentary and mention companies related to the trend.
You may not receive focused investment recommendations like a monthly stock newsletter publication. However, you can find plenty of ideas from the market commentary and screening tools.
Being able to see the bullish and bearish coverage for most stocks and funds on one dashboard is one of the best advantages of this platform. Find out more in our Seeking Alpha Review.
Seeking Alpha Pricing
There are three different subscription plans available:
- Basic (Free): Limited access to articles and rating tools. Unfortunately, you can’t access the stock screener or investment idea lists. This plan can be a good option for casual investors that conduct infrequent research.
- Premium ($29.99 monthly or $239 annually): Unlimited access to articles and ratings that can be useful for regular traders that need in-depth analysis. You can also use the stock screener and investing ideas.
- Pro ($299.99 monthly or $2,400 annually): For active investors with a high cash balance, you get access to exclusive investing ideas, newsletters, and ratings tools.
The mid-tier Premium plan is the best option for most investors as you get unlimited access to the article library and Quant Ratings. Even if you only research a handful of stocks each month, you can exhaust your limited article access quickly, and not having full access to the ratings and screening tools can be frustrating.
A Seeking Alpha Premium plan offers a 14-day free trial to decide if it’s the best stock picking service and research tool for your investing style. Our Seeking Alpha review goes into greater detail or give their trial a shot.
Seeking Alpha Sale – $50 OFF
Seeking Alpha is offering a $50 discount on its annual premium plan. This makes the plan $189 for the first year instead of the normal $239.
This is after a free 14-day trial to see if you like it.
If you’ve been thinking about getting it, this is a great time to get a nice discount on something you’ve been wanting.
Zacks is another of the most respected investment information sources in the industry. They offer investment research, including stock picking services. The company claims more than 800,000 subscribers to their service. Much like Morningstar, Zacks also uses a rating service to evaluate recommendations.
They also offer their “ESP” – Expected Surprise Prediction. That’s a weighted prediction of the likelihood a company will beat its consensus earnings prediction each quarter. That’s an important factor when investing because a company with a track record of beating analysts’ earnings not surprisingly tends to outperform the general market.
Zacks offers three subscription plans Premium, Investor Collection, and Ultimate.
Premium provides daily updates of the Zacks Rank, as well as full access to the Zacks #1 Rank List, Equity Research Reports, premium screeners, and the Focus List portfolio of 50 longer-term stocks. The subscription fee is $249 per year and comes with a 30-day free trial.
Investor Collection includes a bundle of Zacks top subscription services for long-term investors, including Zacks Premium. You’ll get real-time buy and sell signals, the exclusive Stocks Under $10, strategy, and access to all premium research tools and reports. The subscription fee is $59 per month or $495 per year. But you’ll start your subscription with 30-day access for just $1.
Ultimate comes with more services than we can possibly cover in a summary review. But some of the services include Black Box Trader; Healthcare, Blockchain, and Technology Innovations; Inside Trader, Zacks Top 10 stocks, Short Sell List, Stocks Under $10, and Value Investor. Ultimate also includes Zacks Premium.
This plan is available at a monthly subscription of $299, or $2,995 per year. But you’ll start with 30 days of access for just $1.
For a limited time, they’re also offering their special report, 5 Stocks Set to Double, absolutely free to our readers. they ask five experts to name five companies they expect to double in the near future. The experts defend their picks and explain why they believe these companies are undervalued. This report is free and has picked winners in the past like Chewy, NVIDIA, and Sea Limited.
Warrior Trading is an investment advisory service that focuses on day trading. This is a valuable niche because finding the right stocks to trade is one of the biggest dilemmas for day traders. The service claims over 700,000 subscribers.
Warrior Trading offers on-demand educational courses, tools, and community support for both new and seasoned day traders. They even offer a free trading workshop to help you learn the ropes of day trading, including stock selection and risk management. Plus, they add a trading simulator to help you hone your skills before trading with real money.
Chat Room is a live chat room where you can talk day trading with other members of the community. But it also offers watch lists, live trading, market commentary, recaps, and question-and-answer sessions. It will even give you access to Screenshare, where you can watch the live screens of Warrior Trading mentors while chatting and trading.
Warrior Trading offers various tools to help you with day trading, including stock screeners and a live trading chat room where you can swap information and strategies with other members of the Warrior Trading community.
Warrior Trading Pricing
Warrior Trading offers two subscription plans, Starter and Pro.
Starter comes with Chat Room access, as well as the Trading Simulator. It costs $997 to sign up for the course, after which you will be automatically enrolled into the $197 per month subscription fee. You’ll be able to cancel the service after 30 days.
Warrior Pro comes with everything in the Starter subscription but adds Warrior Pro Masterclass Courses, Mentor Session Access, and a customizable stock scanner. The subscription fee is $4,297 for 90 days of access or $5,997 for a full year.
Tim Alerts is offered by Tim Sykes, a name that’s become practically synonymous with penny stock investing. Sykes claims he rose to investment success by trading penny stocks with a few thousand dollars he received at his bar mitzvah.
With Tim Alerts you’ll receive Tim’s PennyStocking watchlist by email every morning at 8:00 AM. You’ll also receive follow-up emails with any trades Sykes makes throughout the day within seconds of the actual trade.
The service is available for a subscription fee of $74.95 per month, or $697 per year.
Stock picking services can be a major investment, especially if you’re a small investor. That doesn’t necessarily mean you should forgo using one. After all, if you’re going to go from being a small investor to a large one, you’re going to need help to get there. Stock picking services at least cover the all-important job of security selection.
But at the same time, it’s important to keep your expectations in check. No stock picking service is going to make you rich overnight. The people behind each service are human beings just like you, and prone to make a few bad calls.
That’s okay, however, since the primary purpose of a stock-picking service is to increase the likelihood of your success. Find one you’re comfortable with, and that consistently provides winning recommendations, and you may have an investment partner for life.