Introduction
Stock picking services can be broadly divided into two camps. In one camp are services that rely on technical signals to recommend short-term positions that turn over every few weeks or months. In the other camp are stock picking services that rely on fundamentals to choose long-term value and growth investments.
GorillaTrades and The Motley Fool Stock Advisor are two of the top stock picking services in each of these categories. GorillaTrades is ideal for active traders who want to take advantage of technical price movements, while Stock Advisor is best for passive investors who want to build a long-term portfolio of growth stocks.
We’ll compare GorillaTrades vs The Motley Fool Stock Advisor to help you decide which is the best stock picking service for you.
About GorillaTrades and The Motley Fool Stock Advisor
GorillaTrades was founded in 1999 by Ken Berman, who was at the time a stockbroker on Wall Street. Berman timed the launch of GorillaTrades with the growth of online brokerages, and gained a following among investors who wanted to take advantage of accessible stock trading. GorillaTrades focuses on technical signals to identify stocks that are poised for short-term gains.
The Motley Fool Stock Advisor was launched in 2002 by brothers Tom and David Gardner. This newsletter is released once each month and includes two highly researched stock picks. Stock Advisor focuses on stocks that are poised for long-term, explosive growth.
GorillaTrades vs. The Motley Fool Stock Advisor: Investing Style
GorillaTrades and The Motley Fool Stock Advisor approach stock investing in fundamentally different ways.
GorillaTrades is an active investing service based on technical signals. The service looks across all market sectors to find technical price patterns, such as ascending triangle patterns, that signal a coming breakout. Picks are put on subscriber’s radar at the end of the trading day, and then triggered when the stock reaches a specific price. GorillaTrades doesn’t consider fundamentals at all, and the swing trades are typically open for a few weeks to a few months. Some trades are closed in a matter of days, but this is less common.
Stock Advisor is a fundamental investing service that largely ignores technical analysis. Stock Advisor picks are based on a stock’s ability to grow over the long term. This service doesn’t use traditional financial analysis methods in many cases, instead focusing on factors like visionary leadership or new technology. In other words, Stock Advisor is looking for companies with disruptive potential and strong moats.
Many Stock Advisor picks are companies in new industries that have not yet matured, although there are also well-established giants that the service’s analysts believe are undervalued. Stock Advisor positions are typically open for at least five years, and many have been in the portfolio for more than a decade.
GorillaTrades vs. Stock Advisor: Pick Format and Frequency
Given the differences in investing philosophies, it should come as little surprise that GorillaTrades and Stock Advisor offer their picks in very different ways.
Stock Advisor’s system is relatively simple and hands-off. Subscribers receive an email newsletter once per month that contains two new stock picks. There’s a detailed explanation of why those two stocks were chosen, but all you need to do is invest in them during the next trading day. You can also wait a few days – there’s little rush to buy right away when a stock pick has a five-year investment horizon. Picks are only occasionally removed from the Stock Advisor portfolio, and you’ll receive an alert when it’s time to sell a stock.
Stock Advisor also offers two lists of stocks to add value to the service. The first is the Rankings list, which highlights 10 stocks already in the portfolio that The Motley Fool analysts recommend doubling down on if you have some extra cash to invest. The second list is the Foundational Stocks list (formerly called the Starter Stocks list), which covers 10 stocks that every growth investor should keep in their portfolio. This list is helpful since it allows you to build a diversified portfolio right away after joining the Stock Advisor service.
GorillaTrades sends an email once per day after market close with one new stock pick and an update on the current portfolio. The nightly email also contains an update on the stock market, although it’s not overly detailed and won’t replace a dedicated stock market news service.
Each stock pick is accompanied by an annotated chart that highlights the trigger price, a stop loss price, two price targets, and a confirmation volume. Trade ideas are said to trigger as soon as they reach their trigger price, but the position isn’t “confirmed” unless the move is accompanied by a surge in trading volume. You can also opt into text message alerts from GorillaTrades so that you are notified whenever a new stock pick triggers or an existing stock in the portfolio stops out.
The GorillaTrades system also involves scaling out of positions by selling 75% of your shares at the first target price (usually 7-10% above the trigger price) and the remaining 25% at the second target price (often 15%-25% above the trigger price). Staying on top of this requires you to pay attention, as the second target price can be raised for high-performing stocks. The stop loss price for every pick is also raised in accordance with its performance to lock in profits.
Notably, GorillaTrades occasionally offers alerts to trade penny stocks, which Stock Advisor never recommends.
To generalize, Stock Advisor requires you to check on the portfolio roughly once per month. GorillaTrades requires you to follow alerts nearly every day and to be ready to trade when a buy or sell alerts comes through.
GorillaTrades vs. Stock Advisor: Historical Performance
It’s difficult to directly compare the historical performances of GorillaTrades and The Motley Fool Stock Advisor because they utilize such different trading systems. Moreover, GorillaTrades does not tabulate its performance since inception.
Stock Advisor has arguably been one of the most successful stock picking services on the market. From its launch in 2002 to August 2023, the service generated returns of 483% compared to 127% for the S&P 500. Some of its top picks include Amazon (+17,122%), Netflix (+21,845%), and Nvidia (+28,790%).
GorillaTrades doesn’t publicize its long-term performance. However, as of August 2023, the portfolio held 35 stocks and all of them had unrealized gains. Four picks had unrealized gains of 23% or more. Keep in mind that the GorillaTrades systems calls for selling 75% of a position after its first price target is reached, so the biggest gains are on reduced positions.
Pricing Comparison
GorillaTrades costs $499.95 per year or $795 for two years. You can try it out free for 30 days, which is a nice way to test out the system and see if it works for you.
Stock Advisor costs $99 for the first year and then $199 per year after that. There’s no free trial, but The Motley Fool does offer a 30-day money-back guarantee.
The big difference in pricing partially reflects the fact that GorillaTrades is a more involved service that includes daily stock picks. Still, Stock Advisor is surprisingly inexpensive given the strong long-term performance of its picks.
Which Stock Picking Service is Better?
Whether GorillaTrades or The Motley Fool Stock Advisor is better for you depends on your investing style and goals. GorillaTrades is an active stock trading service that requires daily attention and the ability to act on triggers throughout the trading day. While it doesn’t take a lot of time each day, it may be too involved for investors with demanding day jobs. There is also considerably more risk in short-term trading, even if GorillaTrades manages this to some extent with stop loss recommendations. You can read our full GorillaTrades review to learn more.
Stock Advisor is the better choice for most long-term investors. It’s especially suitable if you want to take a more hands-off approach to investing. There are only two stock picks per month and no entry or exit points to worry about. It’s also such a low-cost service that it is worth using to craft a long-term portfolio even if you also use a service like GorillaTrades for active trading. You can read our full Stock Advisor review here to learn more.
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Alternatives to GorillaTrades and The Motley Fool Stock Advisor
If neither GorillaTrades nor The Motley Fool Stock Advisor fits your investing style, consider an alternative like Zacks Premium. Zacks Premium is a top stock picking service that offers a mix of technical and fundamental analysis. While we prefer both GorillaTrades and The Motley Fool Stock Advisor to Zacks Premium, Zacks does have some unique tools for self-directed research.
Zacks analysts grade hundreds of stocks based on their value, growth, and momentum, and offer a list of dozens of #1-rated stocks that they think are worth investing in. What’s especially nice about this service is that you have access to market-wide research, so you’re free to make your own investing decisions rather than have picks handed down to you. Zacks Premium costs $249 per year, which is more than Stock Advisor but much less than GorillaTrades.
If you like Stock Advisor, you might also want to check out some of The Motley Fool’s other stock picking services. The Rule Breakers service from The Motley Fool also offers two stock picks per month, so you can use it to expand your portfolio and get more investment ideas. You can purchase Stock Advisor and Rule Breakers together with The Motley Fool’s Epic Bundle for $499 per year.
Conclusion
GorillaTrades and Stock Advisor are among the best stock picking services and they’re designed with two completely different investing styles in mind. GorillaTrades is best suited for active investors who want to take advantage of technical price movements over short timescales. Stock Advisor is designed for long-term investors who want to outperform the stock market over a decade or more. If you can afford it, using both of these services in conjunction can be a very effective way to beat the market in the short-term while building a high-growth portfolio for the long-term.
