Have you been hearing about the trading tool GuruFocus? GuruFocus.com offers a wide variety of trading and investment services. Read our extensive review to find out if GuruFocus is the trading service you’ve been looking for.
GuruFocus is an online financial news, commentary, and research service that tracks the portfolio actions of influential fund managers. The site has expanded the depth of content through the years with more in-depth scans, forums, charts, articles, and market coverage. As the name implies, the service places a focus on what the stock market gurus are doing so that users can make more informed investment decisions.
Founded by Dr. Charli Tian in 2014, the service originally tracked the buying and selling of the most prolific value investors like Warren Buffet and Charlie Monger. Concentrating on under-valued stocks, the site levered the value investing theme to broaden the scope of gurus and various SEC filings to give subscribers better intelligence. Information intended to elevate the individual investor to the stature of world-class portfolio managers by enabling a piggyback approach.
Is the service worth paying for? Keep reading our GuruFocus review to find out.
GuruFocus has a similar appeal as Motley Fool with some advanced features and research tools. GuruFocus caters predominantly to the long-term investment style of trading with opportunities for swing trades. Intra-day trading opportunities can arise too; however, they are less frequent.
There are two applications of the information. First, to synthesize and determine the underlying rationale for why the guru bought or sold the stock and make an informed decision to follow along. Second, to trade the market reaction to the news.
Therefore, the site accommodates all styles of trading. Intra-day traders will need to focus on the real-time insider trades and guru activity alerts to get a leg up on the price action. Investors can get investment ideas that are inline with a specific investment strategy.
As you can see, there are strategies from well-known investors like Warren Buffet, Carl Icahn, and Bill Ackman.
Let’s take a look at some of the specific features.
CEO/CFO Buying Strategy
GuruFocus offers information on insider trades from SEC filings.
When insider buying hits the tape, stock prices tend to spike. The moves are even more pronounced when the CEO or CFO of a company is buying or selling shares. This can be played intra-day to profit from the buying momentum, taken as swing trades, or used as part of a compelling thesis to take a long-term position.
Institutional 13-F/G/D filings
GuruFocus also provides alerts for institutional buying.
A dinosaur doesn’t walk in the sand without leaving footprints. In the stock markets, these behemoths are institutional investors. These are some of the biggest investors in the world, and the footprints can be followed with their SEC filings. Form 13 filings indicate actions taken by institutions and beneficial owners of the underlying stock. A 13-F is a quarterly filing for institutional investors with over $100 million in equity assets.
A 13-D is filed when ownership surpasses five-percent of outstanding shares. The 13-D requires information as the purpose of accumulation. Often, this is the precursor to an acquisition or takeover attempt. A 13-G is a filed for above five-percent ownership take as well but as a passive stake with no activist intent.
Double and Triple Buy Strategy
Combining the effects of CEO/CFO and institutional buying can result is very pronounced stock price uptrends. GuruFocus offers a stock screener that identifies where the ‘smart’ money is placing their bets. Intra-day traders to long-term investors may find this strategy compelling especially is sentiment in the stock has been negative.
Taking a macro approach to which sectors, industries, and stocks that are seeing the most insider activity enable users to pinpoint their concentrated research efforts. Industries seeing a growing trend of insider buying may signal the next breakout. GuruFocus makes it easy for users to review these trends and plan investments accordingly.
GuruFocus is based around the idea of “guru investing.” The idea is that retail investors can achieve exceptional returns if they simply follow the investment advice of the best investors in the world. Whether you are into value investing, growth investing, or some other style, you can use GuruFocus’s model portfolios to find stocks from leaders in the space.
This enables users to mirror portfolios or swap out stocks to construct their own portfolios. It’s always useful to see how others construct their portfolios, especially when back by compelling research and supported by esteemed guru-status investors.
Popular gurus include Warren Buffett, George Soros, Carl Icahn, and more.
GuruFocus has many pre-built scans based on selected guru strategies. The all-in-one stock screener gives very flexible scans based on fundamentals, valuation ratio, price, Gurus, Dividends, and Customized. Popular screeners include:
- Value Screeners
- Buffet-Munger Screener
- Ben Graham Net Screener
- Hedge Fund Guru Screeners and more
We’ve reviewed dozens of the best stock screeners, including Uncle Stock, StockFetcher, and Trade Ideas. GuruFocus takes a truly unique approach to stock screeners by offering a broad range of filters that you won’t find on other platforms. Each stock screener within GuruFocus is built around an investing strategy. This makes the screener results more actionable.
Of course, you can also create your own custom screener if you prefer. The screener offers filters for:
- Stock Price
- Market Cap (or Enterprise Value)
- Stock Industry
- Past Performance
- Financial Data (Company Fundamentals)
- And much more
It definitely takes some time to familiarize yourself with the custom screener, but the versatility and power make the time well worth it.
When we first set out to work on our GuruFocus review, we were most interested in the guru portfolios. As we got deeper into the review process, we found that the stock screeners are actually one of the best features of the platform.
Lastly, GuruFocus offers access to financial news from the newswires as well as the company’s own contributors. GuruFocus is not a replacement for a real-time news screener like Benzinga Pro or TradetheNews, but it does offer some unique value. There is an abundance of opinion pieces and investment advice offered on the site. The news can be filtered by categories like:
- GuruFocus Editor’s Picks
- Guru News
- Value Ideas
- Dividend News
- And more
The news sections of GuruFocus remind me a bit of Seeking Alpha. The news stories are unique and once again center around the “guru” theme.
GuruFocus Pricing Options
GuruFocus registration is free and enables users to access some of the free features as well as articles. To access the real meat, users have two premium membership options, Premium and Premium Plus.
Premium membership costs $449-per year for U.S. markets and $399-per year for international regions like Asia, Europe, U.K./Ireland, Latin America, Africa, Oceania, and Canada. GuruFocus applies a $100 discount to each addition region added to the membership. Some of the premium service highlights are alerts on real-time Guru trades, value strategies, model portfolios, three-years of back-testing, Excel add-ins up to 2,000 queries a month, My Gurus watchlists, insider trends and alerts, interactive charts, and the all-in-one screener.
Premium Plus membership costs an additional $849-per year for a total of $1,338. This gives access to all financial market regions along with over 4,000 U.S. institutional form-13 filings and trading history, back-testing from 2006 to present, unlimited Excel add-in queries, GuruFocus Manuel of stock for all regions. Services come with a free 7-day trial and 30-day money-back guarantee.
What Type of Trader is GuruFocus Best For?
This service is best suited for swing traders and investors seeking ideas supported by the proven strategies of the industry’s smartest players. Realistically, most users (like me) are most interested in piggybacking off the ideas of the most successful market gurus. Intra-day traders can benefit from the real-time Guru picks and insider trades alerts.
Whether you are into value investing, growth investing, or short-term trading, GuruFocus offers a lot of great research tools that can help you improve your investment strategy. We’ve reviewed hundreds of financial services, and GuruFocus is definitely unique. If you are interested in learning what the biggest investors in the world are investing in, Guru Focus is a great option for you.
While the platform offers a broad set of tools, it seems that value-driven investors will be able to make the most out of the platform. Many of the tools are designed specifically for value investing (i.e. screeners to find undervalued companies, pre-built value strategies, portfolios of famous value investors, etc.).
Is GuruFocus Worth It?
We were impressed with what we found in our GuruFocus review.
The premium service is a great value for value investors and day traders considering the timeliness of the information. It only takes one or two good trades to pay for the whole year. Receiving real-time buying alerts before the major newswires post the stock is a key advantage for intra-day traders. That said, you should have a decent-sized portfolio if you want to get the most value out of the service and the research tools provided.
Premium membership starts at $449 per year and goes up to $1,338 per year for the Premium Plus plan. If you really want to get value out of these GuruFocus subscriptions, you need to make sure you have a portfolio that is large enough to benefit from the investment advice offered. If you only have a few hundred or a few thousand dollars to invest, you may prefer a simple service like Motley Fool’s Stock Advisor (available for $99/year).
- Great stock ideas garnered through high-profile market-moving actions by market gurus and insiders
- The All-in-one scanner has a great depth of functionality
- The user-friendly and relatively small learning curve
- The concentration of undervalued stocks and value investing strategies
- Loads of great strategy videos for value investing and other investment styles
- Great research tools to simplify the analysis process
- Piggybacking on other people’s trades can be dangerous
- Involves additional effort to evaluate the rationale behind guru stock picks
- Platform feels a bit outdated