Alpha Picks Review – How Do Seeking Alpha Stock Picks Perform?

Alpha Picks is a relatively new stock-picking service from investing platform Seeking Alpha. Alpha Picks offers two new stock recommendations each month, with an eye towards picking high-momentum companies that will outperform the market over a timeframe of several years.

Is Alpha Picks the best stock picking service for your money? Keep reading our Seeking Alpha Alpha Picks review to find out.

Alpha Picks Pricing Options

Alpha Picks costs $499 per year. There’s no trial period or money-back guarantee.

How Does Alpha Picks Work?

Alpha Picks recommends two new “strong buy” stock picks each month, which you can then choose to invest in or not. All picks are long-term recommendations designed to be held for at least one year and significantly longer for successful picks. 

Alpha Picks only recommends US stocks with a market cap of at least $500 million. All picks are made by human analysts, not an algorithm, and they’re based on a variety of factors including:

• Profitability
• Earnings growth
• Price momentum
• Wall Street analyst price targets
• Company fundamentals
• Valuation compared to peers

Overall, the service aims to find promising stocks in sectors experiencing strong growth. It doesn’t focus on a single sector but rotates picks among sectors depending on which parts of the market are seeing the biggest gains.

Every Alpha Picks stock is accompanied by a short research report that explains the rationale behind the pick. The research reports are relatively easy to understand and dive into what a company does, why the Alpha Picks team thinks it will outperform the market, and any potential risks to watch for. A lot of the research comes from Seeking Alpha’s own tools, so the metrics discussed will be very familiar if you already use Seeking Alpha Premium.

Alpha Picks sells stocks from the portfolio when they fall behind on fundamentals, valuation, or price momentum, or when they are rated Hold for 6 consecutive months. This flexible, analysis-based approach to selling means that Alpha Picks doesn’t typically take huge losses on bad picks. The worst performing stock in the portfolio as of February 2024 is down 31.5%, and the second-worst performing stock is down just 9.3%.

Alpha Picks suggests an allocation for each stock in the portfolio, which enables investors who are new to the service to buy the whole portfolio. Alternatively, new users can limit themselves to only buying stocks currently rated as Strong Buy. As of February 2024, there are 31 stocks in the portfolio and 13 of them are rated Strong Buy.

Who is Behind Alpha Picks?

Alpha Picks is run by the quantitative analysis team at Seeking Alpha. This team is headed by Steven Cress, who has over 30 years of experience in the space. Cress founded Cress Capital Management and formerly ran a trading desk at Morgan Stanley.

The stock picks from Alpha Picks seem to reflect a similar investment philosophy as the rest of the site. The picks are in line with some of the top-rated stocks based on the quant ratings you get with Seeking Alpha Premium. Alpha Picks is a great option for investors who don’t want to dive deep into the research on Seeking Alpjha’s platform and instead just want to know which stocks to buy/sell and when.

Alpha Picks Performance

Alpha Picks launched on July 1, 2022. Between then and February 2024, the portfolio delivered a return of 99.01% compared to 30.93% for the S&P 500. Five picks returned more than 100%, with the best pick returning just over 700%.

Alpha Picks vs. Stock Advisor

Alpha Picks has a lot in common with the Motley Fool’s Stock Advisor stock recommendation service. Both offer two new stock picks per month, and both focus on long-term stock picks. Both also offer updated ratings on stocks in the portfolio so you can decide what to buy if you have extra money to invest.

There are two key differences between the services: price and investment style.

Alpha Picks is available for $499/year, whereas Stock Advisor is $199/year (with discounts regularly available for the first year)

The biggest difference between these two services lies in the strategies these two recommendation services use. Alpha Picks focuses more on momentum than growth and aims for a minimum holding time of one year. Stock Advisor prioritizes growth potential and aims for a minimum holding time of five years. Although this distinction isn’t huge, they mostly recommend different stocks.

With that in mind, Alpha Picks can be slightly better for active investors, while Stock Advisor can be slightly better for hands-off long-term investors. It’s worth considering using both services to get twice as many picks from two completely different analyst teams.

What Type of Investor is Alpha Picks Best For?

Alpha Picks is best for active investors who want a momentum-focused portfolio that covers a wide variety of market sectors. You don’t have to do much other than follow along with the buy and sell recommendations, so it doesn’t take much time or effort to use this service.

One thing to note about Alpha Picks is that it doesn’t include access to Seeking Alpha’s research tools. For that, you’ll need an additional Seeking Alpha Premium subscription, which costs $239 per year. This isn’t necessary, especially if you just want ready-to-buy stock recommendations, but adding Seeking Alpha Premium can help self-directed investors find more stocks like the ones Alpha Picks is recommending.