Actionable stock picks can reduce the amount of time you spend on research and help you find promising companies you might otherwise have missed. They can be a great way to build a new portfolio or to boost the performance of your existing portfolio.
However, it’s important to make sure that any stock picks you get are from trustworthy services with strong track records of outperforming the market. Otherwise, you could end up buying bad companies or investing at the wrong time.
In this guide, we’ll explain how to use stock recommendations effectively and highlight five services you can use to get stock picks.
What is a Stock Pick?
A stock pick is a recommendation to buy shares of a specific company right now. The stock picker—whoever is recommending the stock—believes that the shares are about to increase in price.
Stock picks can come from professional stock analysts, friends and family, stock picking algorithms, and other sources. They always include the name of the company to buy, and they may also include details like a recommended entry or exit price.
Stock picks also include recommendations to sell a stock short. However, sell-side stock picks are much less common than buy-side picks.
What to Consider Before Following a Stock Pick
While stock picks can be very helpful, it’s important to never follow them blindly. Here are a few key things to consider before buying a recommended stock.
What’s the Timeframe?
Think about your investment timeframe and make sure that it matches the time horizon of the recommendation. A recommendation for a stock with a five-year investment horizon may not be suitable for active investors with a one-year time horizon.
Does It Fit Your Style?
Every investor has a different style and goal, and it’s important that the stocks you invest in align with your interests. For example, if your goal is to invest in dividend stocks to generate cash flow, a recommendation for a growth stock that doesn’t pay a dividend won’t make sense for you.
In addition, you should always ensure that you’re comfortable with the risk and volatility of a stock pick.
Do You Understand What You Are Buying?
Smart investors always know what they own and why. Good stock picks come with an explanation of why a stock is being recommended, and you should critically evaluate whether you agree with that rationale.
Stock picks can eliminate some of the work involved in finding stocks to buy, but it’s still up to you to research and understand each pick.
Do You Trust the Source?
It’s also important to think about where a stock pick is coming from. A recommendation from Warren Buffett is very different from a pick your colleague mentions to you.
You should especially consider the track record of the source of your picks. A person or service with a consistent record of finding outperforming stocks—especially in different market conditions—is more likely to be trustworthy.
That said, even gurus like Warren Buffett are wrong sometimes. So, you shouldn’t follow picks from a trustworthy source blindly.
What’s the Plan?
Even if you’re told which stock to buy, you still need a plan for how you’ll approach the investment. For example, you need to know what price to buy, how many shares you will buy, and whether you’ll keep adding to your position over time. You also need to decide when to sell for a profit or when to cut losses.
Your plan should reflect your investment goals and risk tolerance. For example, if you’re trying to minimize risk, it might make sense to start with a small investment and set a stop loss at 10% below your entry price.
Best Ways to Get Stock Picks
Let’s take a look at five services you can use to get reliable stock picks for a variety of investing styles.
Motley Fool Stock Advisor – Best for Long-Term Picks (5+ Years)
Stock Advisor is the flagship stock picking service from Motley Fool, a stock research firm with an outstanding track record. From when Stock Advisor launched in 2002 to March 2024, the service has outperformed the S&P 500 664% to 151%.
Stock Advisor focuses on long-term growth stocks, and all recommendations have an investment time horizon of at least five years. The service encourages holding onto winners rather than selling them, and some picks have been in the Stock Advisor portfolio for more than 20 years.
When you sign up for Stock Advisor, you’ll get two new stock picks per month. You’ll also get access to two additional lists of stock picks. The Rankings list highlights 10 stocks already in the portfolio that are worth investing more into right now. The Foundational Stocks list highlights 10 growth stocks that Motley Fool analysts think every long-term investor should own.
Key Features:
● Two new stock picks each month
● Focuses on long-term growth stocks
● Minimum investment horizon of five years
● Includes Rankings and Foundational Stocks lists
Pricing: $199 per year
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(regularly $199)
Motley Fool Epic Bundle – Best for Diversification
The Epic Bundle from Motley Fool includes a Stock Advisor subscription along with access to three additional Motley Fool stock picking services: Rule Breakers, Everlasting Stocks, and Real Estate Winners.
At a broad level, there isn’t a ton of difference between Stock Advisor, Rule Breakers, and Everlasting Stocks. All three services focus on long-term growth stocks. Having access to all of these services means you get six new stock picks per month instead of just two.
The best part of the Epic Bundle is that it adds in Real Estate Winners, which focuses on real estate-related stocks and REITs. These picks can help you diversify your portfolio into residential and commercial real estate and potentially protect you against a downturn in the stock market.
Key Features:
● Up to seven new stock picks per month
● Combines growth stock and real estate stock recommendations
● Many REIT recommendations pay dividends
Pricing: $499 per year
Special Offer
Save $200 on Motley Fool Epic
Seeking Alpha Alpha Picks – Best for Mid-Term Picks
Alpha Picks is a relatively new stock picking service from Seeking Alpha that launched in July 2022. From inception through March 2024, the service has beaten the S&P 500 125% to 36%.
Alpha Picks delivers two new stock picks each month. Recommendations focus on sector-leading stocks with strong momentum, and picks are intended to be held for one to two years.
This service does a nice job of picking stocks from different sectors each month, helping you build a more diversified portfolio. In addition, top stocks in the portfolio are labeled as Strong Buys, giving you direction if you have additional cash to invest in between new picks.
Key Features:
- Two new stock picks each month
- Focuses on stocks with strong momentum
- Rates Strong Buy stocks to double-down on
- Investment horizon of one to two years
Pricing: $499 per year
Special Offer
Get a Discount on Alpha Picks
Seeking Alpha Premium – Best for Fresh Ideas Weekly
Seeking Alpha Premium is a distinct service from Alpha Pick that’s better-suited for self-directed investors. It offers access to in-depth stock research, including a wide range of valuation metrics, peer analysis, and financial health ratings. You also get access to interesting op-ed articles from Seeking Alpha contributors that make the case for and against buying individual companies.
Seeking Alpha Premium doesn’t issue ready-to-buy stock picks like Alpha Picks. Instead, it assembles a list of 30-40 top-rated stocks for you to consider. The list includes stocks that earn high scores from Seeking Alpha analysts, op-ed contributors, and a proprietary algorithm.
It’s up to you to research stocks in the list to decide which ones to buy. However, the top stocks list is a great starting point that can save you a lot of time. In addition, it turns over every few weeks, so there are always new stock picks to explore.
Key Features:
- List of 30-40 top stocks to research
- New picks introduced every week
- Access to in-depth stock research
- Op-ed articles written by professional stock analysts
Pricing: $239 per year
SPECIAL OFFER
Try Seeking Alpha Premium FREE for 7 Days.
Scanners (e.g. FinViz) – Best for Fresh Ideas Daily
Stock scanners enable you to quickly find stocks that meet a specific investing strategy. They don’t exactly give you stock picks, but you treat a scanner’s results like recommendations of stocks you should look into further.
The advantage of using a scanner is that they can output new results daily as companies’ financials, valuations, and stock prices change. In addition, you can use a scanner to find stocks to invest in for several different strategies instead of just one.
FinViz stands out as one of the best scanners for investors because it offers a wide range of technical and fundamental filters. You can build a strategy based on financials, valuation, and growth, then find entry opportunities based on technical setups. Best of all, FinViz is free to use with slightly delayed stock data.
Key Features:
- Fundamental and technical filters
- Sort results based on additional parameters
- Visualize scanner results with bubble plots
Pricing: Free
Try FinViz Scanners for Free
Conclusion: Simple Ways to Get Stock Picks
Stock picks can help you build a market-beating portfolio while minimizing the time you spend searching for stocks to buy. When using stock picks, remember to ensure recommendations come from a reliable source and suit your investing style.
We recommend Stock Advisor as the overall best stock picking service for long-term investors. Alpha Picks is a great choice for more active investors, while more self-directed investors can use Seeking Alpha Premium or a stock scanner like FinViz.
