Action Alerts Plus Review
Action Alerts Plus is an online stock recommendation platform. Run by well-known analyst, Jim Cramer, Action Alerts Plus has a variety of things to offer its user. Read our review to learn more about Action Alerts Plus and what this platform can do for your trading.
About Action Alerts Plus
Action Alerts Plus is an online stock recommendation platform founded by well-known analyst Jim Cramer, a former hedge fund manager and host of CNBC’s Mad Money. However, this is no longer Jim Cramer’s Action Alerts Plus. Cramer sold the platform, along with TheStreet.com, in 2021 and now runs his own investment portfolio within CNBC Investing Club.
Action Alerts Plus is now managed by investors Bob Lang and Chris Versace, both of whom have decades of Wall Street experience. Lang and Versace still adhere to Cramer’s investment style and Action Alerts Plus has changed surprisingly little since the sale.
The Action Alerts platform offers a model portfolio, recommended stocks to buy and sell, and analysis from Lang and Versace on how stocks within the portfolio are moving. Compared to similar stock-picking platforms like GorillaTrades, Action Alerts Plus uses scaling in and out of positions more heavily and provides more analysis of individual picks.
Overall, Action Alerts Plus is a good option for medium to long-term traders who want to actively invest but need guidance from experienced analysts on which stocks are worthwhile at any given time. Our Action Alerts Plus review will help you decide if the service is right for you.
|Stock Picks, Investment Analysis, Market Commentary
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How Much Does Action Alerts Plus Cost?
Let’s start our Action Alerts Plus review by looking at the cost of this stock picking service.
Action Alerts Plus requires a subscription, which can be purchased monthly, annually, or biannually. A monthly subscription costs $29.99 per month ($359.88 per year), an annual subscription costs $199.99, and a two-year subscription costs $299.99. Action Alerts Plus also offers a free two-week trial if you want to review and test the service’s features before committing to a subscription.
This pricing falls in line with similar services. It’s cheaper than Gorilla Trades but about the same as the Stock Advisor Program by Motley Fool. Like most stock recommendation services, the subscription cost is nominal if the stock picks deliver. Let’s take a closer look at this service.
While Action Alerts Plus is no longer associated with Jim Cramer, the service still follows the investing strategy he created. This strategy is focused on investing in a well-balanced mix of value and growth stocks, making it appealing to both medium and long-term investors. The Action Alerts Plus model portfolio is split into value, growth, blend, and income stocks. Within the value stocks category, investors will find a series of “core holdings” that represent fundamentally sound companies that should be held for years at a time.
In contrast to stock picking platforms such as GorillaTrades, the Action Alerts Plus strategy relies very heavily on scaling into and out of positions. Many of the trading actions recommended on the platform involve buying more of a stock that is already in the portfolio during a pullback or selling piecemeal on strong trading days. It is worth noting that while this strategy can be effective at mitigating risk, it can incur significantly higher commission fees and requires more active trading than other stock recommendation systems.
Overall, the strategy appears to be successful on the whole, with many historical stock picks returning gains of more than 20%. However, Action Alerts Plus makes no mention of stop losses and traders have to wait for a sell alert from the service when prices are falling. As a result, many stock market picks lose more than 10% of their value before being removed from the portfolio.
Action Alerts Plus Features
The portfolio is a spreadsheet-style listing of all stocks currently recommended by Lang and Versace. Traders can quickly see the returns of a particular stock in the portfolio, the recommended price target, and the stock’s overall weight in the portfolio. You can look for the best stocks to buy right now by sorting the list by the most recent buy dates.
Traders can also see the full history of closed positions and trades made by the Action Alerts Plus platform to get an idea of the platform’s historical returns with any particular stock. Many of these stocks beat the S&P 500 while others resulted in losses. That’s the name of the game when you invest in individual stocks. The stock picks are designed to beat the market, but of course results are not guaranteed. Especially given the lack of stop losses, it’s important that traders have their own risk management strategy when using this service.
Another interesting feature of the portfolio is that every stock is issued a rating on a scale of one to four. This scale indicates whether traders should buy more of the stock, wait for a pullback, or sell. However, a sell rating doesn’t necessarily mean traders should completely exit a position given the trading system’s method of scaling in and out. You’ll need to do some research on your own to find buy and sell levels within this rating system. Still, we liked this rating and review system since it helps traders understand how much conviction is behind an alert.
Alerts and Analysis
The analysis posts issued with every trade are among the best features of this service. Trade alert posts are typically brief – a few paragraphs – but give insight into the reasoning why a specific trade is being recommended at a specific time.
The analysis in Action Alerts Plus is generally focused more on stock fundamentals and current news than technical indicators. In addition, the analysis usually requires some additional reading of previous trade alerts, external news articles, or of the weekly newsletter for further context.
In addition, Lang and Versace regularly issue analysis posts, which are not pegged to a specific trade recommendation. Instead, they discuss stocks that the team is watching or already holds in the Action Alerts Plus portfolio. These posts are typically longer and more in-depth but similar to alerts. They focus on current events and changes in fundamentals to assess the potential value and risk of a stock going forward.
Weekly roundups are another form of in-depth analysis. Rather than focus on specific stocks, these end-of-week newsletters are focused on the market and economy as a whole. The newsletter provides a summary of key economic indicators, as well as investor reactions to notable earnings reports and world events that are shaping the markets. These can offer some additional investment advice for investors who like to pay close attention to the market’s weekly performance.
The Action Alerts Plus team also runs a forum on the platform. However, in contrast to typical forums, this is structured as a question-and-answer forum directly for the analysis team rather than as a place for users to answer each other’s questions.
We’ve reviewed hundreds of stock services, and during our Action Alerts Plus review we wanted to see how the service stood out.
This service is differentiated from other stock recommendation platforms by its in-depth analysis of all trades and its focus on creating a balanced portfolio of value and growth stocks. The analysis can be challenging to parse since it requires researching external news articles and following stocks closely. But having the option to dive into why the team behind Action Alerts Plus recommends buying a stock at any given time is useful for active investors who want to learn more about trading.
At the same time, more passive investors will appreciate the portfolio’s “core holdings” and the blend of value and growth stocks included in the portfolio. Although Action Alert Plus’s strategy of scaling positions can result in multiple trades, this isn’t a huge issue in the era of commission-free brokerages. The biggest downside for investors is that Action Alerts Plus doesn’t offer stop loss recommendations, and this has led to some large losses in the service’s past.
What Type of Trader is Action Alerts Plus Best For?
Action Alerts Plus is best for value-driven investors who want to invest over both medium and long-term timescales. Stock recommendations are more fundamental than technical in nature, and many stocks end up remaining in the portfolio for months to years with multiple re-recommendations in between sales.
The service focuses on stock recommendations, so it’s ideal for traders who have some knowledge of how the market works, but who are not comfortable doing their own fundamental or technical analyses. Action Alerts Plus leans heavily into scaling, making it more suitable for traders who want to take an active role in their investments and watch the market daily. Passive investors may not be able to keep up with all the alerts.
As mentioned earlier in the review, the Motley Fool Stock Advisor is a great alternative to Action Alerts Plus, especially for more passive investors (read the full comparison here).
- Stocks are divided into value, growth, blend, and income categories
- History of solid overall performance
- Portfolio picks are rated on a one to four scale
- Stock picks are accompanied by in-depth analysis
- Weekly roundups cover market-wide trends and news
- Relies heavily on scaling positions, which requires more active involvement
- Does not recommend stop losses for positions