Alpha Picks by Seeking Alpha: Is It Worth It?
I've been a member of Seeking Alpha Premium for the last five years.
Seeking Alpha is one of my favorite places to conduct high-quality investment research. I use the site often, both for checking up on my current portfolio and for finding new investment ideas.
In July 2022, Seeking Alpha launched a new product: A stock picking service called Alpha Picks. I became a subscriber a month later.
After being a member of Alpha Picks for over two years, here's my experience with the service, how it works, and what you can expect as a member.
And since the main point of subscribing to any stock recommendation service is to get winning stock picks, I'm going to share the exact returns of every stock Alpha Picks has recommended since its launch.
Spoiler alert: They're good.
Alpha Picks review summary
- Overall rating:
- Service type: Stock-picking newsletter
- Best for: Medium- to long-term investors
- Cost: $499/year (new members can get their first year for $409 through our link during Black Friday)
Alpha Picks is a stock recommendation service driven by a “proprietary, data-driven computer scoring system.” In other words, quantitative analysis (more on this below).
In the two years since its launch, the service has picked stocks that have generated returns nearly 3.1x higher than the S&P 500 (60.22% vs 19.64%).
- Average return: 60.22%
- Max return: 635%
- Percent winners: 77%
Ultimately, whether Alpha Picks is worth it or not depends almost entirely on the results of their stock picks. As you can see, it has performed very well so far.
Disclaimer: All performance figures listed herein were updated on November 4, 2024. Past performance does not guarantee future results.
What is Seeking Alpha?
Seeking Alpha, the company behind Alpha Picks, was founded in 2004 with the goal of providing diverse, high-quality investment research to retail investors.
The core of Seeking Alpha is its crowdsourced content — more than 18,000 contributors produce 7,000+ articles per month with stock reports, investment ideas, and more.
Additionally, Seeking Alpha has fundamental data, charts, analyst ratings, and a number of quantitative tools like Factor Grades, Dividend Grades, and its proprietary Quant Rankings.
Free users have limited access to certain features and a handful of research reports each month, but a Seeking Alpha Premium subscription unlocks everything the site has to offer.
For more on this, check out my full Seeking Alpha Review.
But, while hundreds of thousands of investors loved Seeking Alpha, there were many others who didn't want to do all the hard work themselves - they just wanted to know what stocks Seeking Alpha recommended.
And so, Alpha Picks was created.
What is Alpha Picks?
For investors who don't have the time or inclination to dig through thousands of pages of data and analysis, the company launched Alpha Picks — a stock recommendation service that provides two stock picks per month.
The Alpha Picks team uses a quantitative trading strategy to pick stocks. They use criteria like momentum, factor grades, growth rates, revisions, and other data, as opposed to investing based on fundamentals and price.
This is a different approach than I take when evaluating investments. I'm a long-term, fundamental- and qualitative-based investor, so I was skeptical about Alpha Picks' quantitative-focused strategy.
But that's a matter of personal preference - there's more than one way to invest. The bottom line with investing is any strategy is good so long as it outperforms the market.
And, as of right now, the results generated by Alpha Picks are pretty undeniable.
Alpha Picks' performance (as of November 2024)
Since subscribing to Alpha Picks, I've been reading each new stock pick report and meticulously tracking the performance of every recommendation.
Here's a summary of how Alpha Picks' stock recommendations have performed since the service's launch in July 2022:
- Average return: 3.07x the S&P 500 (60.22% vs 19.64%)
- Max return: 635% (SMCI, selected 11/15/22)
- Percent winners: 77% (46/60)
A few things stand out to me about the results from Alpha Picks so far.
1. Where the outperformance has come from
Alpha Picks is specifically targeting stocks with the potential to make huge moves.
By picking a few of these big winners correctly, the underlying portfolio is dragged substantially higher. If you had put $1,000 into each new recommendation and bought $1,000 worth of the S&P at the same time, here is what your results would look like:
If you had purchased the S&P 500 on every day Alpha Picks made a new stock recommendation, you would be up on 58/60 of those investments, a 97% win rate. (The S&P has performed very well since the service began, so that makes sense.)
Still, despite having a lower win rate (77%), Alpha Picks is outperforming by over 3x due to a handful of big winners.
- Nine of the service's stocks have gained more than 100%
- Five have gained more than 200%
- Four have gained more than 300%
This is exactly in line with the objective of the Alpha Picks investment approach.
2. 2022 picks vs 2023 picks vs 2024 picks
The stocks selected in 2022 have an average return of 97.30% (and 75% are winners) — almost 4x higher than the S&P 500.
The stocks selected in 2023 are beating the market by 2.8x (and 83.33% are winners).
2024's picks are more than 2.6x higher the S&P.
Here's a look at the numbers:
These results may indicate the picks need time before they really start to outperform. The service is still too new to say whether this is a fluke or expected behavior.
Still, I've noticed similar results in other services (like Motley Fool's Stock Advisor), so this may be something to keep an eye on.
3. Closed positions & average holding period
The Alpha Picks team closed 1 more position in October, bringing the total number of closed positions to 21.
I don't see anything particularly noteworthy about the win rate or returns of the closed positions other than the fact that the team has closed 19/36 positions (52.78%) purchased more than one year ago.
This holding period is in line with what I would expect from a momentum-based service. Still, it's a bit shorter than the two years the service claims in its presentation. There's nothing wrong with this, just something to keep in mind.
How does Alpha Picks work?
Unlike most of its competitors, Alpha Picks is very transparent about its portfolio process, stock selection criteria, and who makes up its management team.
1. Quantitative analysis
At the heart of Alpha Picks is its quantitative analysis, and the main component of this analysis is Seeking Alpha's Quant Ratings.
Since 2010, the Quant Ratings model has delivered impressive results when backtested:
The system ranks stocks based on five factors: value, growth, profitability, EPS revisions, and momentum.
Quant Ratings serve as the foundation for the Alpha Picks stock-selection process.
Notably, Seeking Alpha acquired quant analytics platform CressCap Investment Research in December 2018.
Steven Cress, its founder and CEO, joined Seeking Alpha as Head of Quant Strategies, and is now the leading team member of Alpha Picks.
Note: Seeking Alpha Premium users can also access Quant Ratings.
2. Investment criteria
Buy criteria
From the Quant Ratings, the Alpha Picks team selects two “Strong Buy” rated stocks each month. At the time of publication, each pick must meet the following criteria:
- Have a “Strong Buy” quant rating for at least 75 consecutive days
- Be a U.S. common stock (i.e., no ADRs)
- Not be a REIT
- Have a 3-month average market capitalization greater than $500M
- Have a stock price greater than $10
- Have not been recommended in the past year
Sell criteria
Alpha Picks notifies its members when it's time to close or reduce a position in the portfolio. They sell the entire position if any of the following occur:
- The quant rating falls to “Sell” or “Strong Sell”
- The quant rating falls to “Hold” and remains at “Hold” for 180 consecutive days, as long as the stock is not a “winner” (see below)
- The company is acquired or it announces a merger of equals
Letting winners run
The team's research shows that portfolios perform better when letting winners run.
A stock is a “winner” when it doubles from the price at which it was purchased.
For winners, if the rating on the stock falls to “Hold” and remains there for 180 consecutive days, the team will only sell the initial investment in the stock, keeping the remainder of the position in the portfolio.
The team only eliminates positions in winners entirely if the rating falls to “Sell” or “Strong Sell,” or if the company is acquired or announces a merger of equals.
3. Investment team
In addition to its best-in-class data, analytical tools, and proprietary models, Alpha Picks' investment team always makes the final buy/sell/hold decisions.
In this way, the service describes its investing approach as “quantamental,” combining both quantitative and fundamental analysis.
Alpha Picks is run by a two-person team:
- Steve Cress is the VP of Quantitative Strategy. Steve has over 30 years of experience in equity research and quantitative strategies. Prior to Alpha Picks, he founded Cress Capital Management (a quant hedge fund) after starting his career running a quant trading desk at Morgan Stanley.
- Joel Hancock is the Senior Director of Product. Prior to joining Seeking Alpha, Joel led product teams at Goldman Sachs, Morgan Stanley and E*TRADE.
4. Portfolio process
The Alpha Picks team offers three potential strategies its members can deploy:
- Buy at least 5 “Strong Buy” rated Alpha Picks from the existing portfolio.
- Buy the entire portfolio using the allocations in the “Portfolio” tab.
- Use Alpha Picks as an idea-generation tool. Read the analysis of each pick, and choose the stocks that suit your strategy.
Unlike most of its competitors' services, the Alpha Picks team does not buy equal weights of each stock it recommends, though the vast majority of its picks receive a 2–3% allocation.
Given the distribution of returns in Alpha Picks so far, buying every stock that the service recommends provides the best chance of capturing the few stocks that drive most of the outperformance.
How much does Alpha Picks cost?
Alpha Picks costs $499/year and includes 24 stock picks each year (two per month), stock analysis reports, portfolio commentary, and performance updates.
New members can get their first year of Alpha Picks for $409 with our link during Seeking Alpha's annual Black Friday sale.
Keep in mind that Seeking Alpha does not currently offer a free trial or a refund policy for Alpha Picks.
That said, I have had good experiences with their customer support in the past — you might be able to talk them into a refund if you have a good reason.
What else is included with Alpha Picks?
After subscribing, you'll be added to the Alpha Picks investing group.
The group comes with four tabs:
- Analysis: The Analysis tab (pictured above) shows each of the investment reports and performance summaries in chronological order, as well as the portfolio's total return.
- Portfolio: The Portfolio tab shows the return of each pick, the sectors the stocks are in, their ratings, and the holding percentage.
- Performance: The Performance tab shows the up-to-date total portfolio return and the return data of all the service's picks, which days they were selected, and how they're performing compared to the S&P 500.
- About: The About tab discusses the investing strategy, portfolio process, and strategy characteristics, plus provides some background information on the team.
I wouldn't be surprised if Seeking Alpha added more features to the service over time (especially educational and community features), but it's focused on one thing right now: delivering high-quality stock picks.
Alpha Picks pro and con summary
| Pros | Cons |
| Outperforming the S&P by 3.07x | No monthly subscription option |
| Backtested, proprietary, quant-driven stock-picking model | No free trial |
| 1 new stock pick every 2 weeks | No refunds |
| An experienced investment team | |
| Simple, beginner-friendly service | |
| Done-for-you investment research | |
| $409 introductory offer |
Alpha Picks vs Motley Fool, and Zacks
Here's how Alpha Picks compares to a few competitors:
| Alpha Picks | Motley Fool Stock Advisor | Zacks Home Run Investor | |
| Service type | Stock picking | Stock picking | Stock picking |
| Investments | Stocks | Stocks | Stocks |
| Investment style | Primarily quantitative | Primarily fundamental | Primarily quantitative |
| Cost | $499/year | $199/year | $59/month |
| Special offer | $409 for new members | $99 for new members | n/a |
| Links | Sign up | Sign up | Sign up |
You can read more about each of these services in my article on the best investing newsletters.
Final verdict
This Alpha Picks review really comes down to a few key things:
- The service is outperforming by a factor of 3.07x. Past performance does not guarantee future results, but this is a very strong start for the Alpha Picks team.
- The service is $409 for new members. To make it worth it, you should preferably have a few thousand dollars to invest.
- The service is new. While the results have been great so far, I would like to see a few more years of outperformance, especially in different market conditions, before I can say anything definitive about the investment approach.
The bottom line with any stock-picking service is whether or not it can consistently deliver outperformance. While it's early, Alpha Picks has been doing exactly what it advertises: generating alpha.
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