GuruFocus Review – Is This Investment Tool Right for You?

About GuruFocus

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 over 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 Features

GuruFocus will appeal to many of the same traders as Motley Fool stock newsletters. GuruFocus caters predominantly to long-term investors, but there are also opportunities for swing traders on this platform. Intraday trading opportunities are much less common on GuruFocus.

There are two ways to apply information from GuruFocus. First, you can determine why a guru bought or sold a stock and decide whether to follow along. Second, you can use GuruFocus to follow market news and trade around headlines.

Intraday and swing traders will want to focus on real-time insider trades and guru activity alerts to get a leg up on price action. Investors can use GuruFocus to get investment ideas that are in line with their investment strategy.

GuruFocus includes 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 intraday 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 activity.

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 by watching SEC filings. Form 13 filings indicate actions taken by institutions and beneficial owners of an 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 about the purpose of accumulation. Often, this is filed as a precursor to an acquisition or takeover attempt. A 13-G is a filed when an institution has a greater than five-percent ownership stake with no activist intent.

Double and Triple Buy Strategy 

If a CEO, CFO, and institutions are all buying the same stock, that’s a sign that traders and investors want to take note of. GuruFocus offers a comprehensive stock screener that identifies where ‘smart’ money is flowing and makes it easy to find stocks that are seeing both insider and institutional buying activity. This strategy can be especially compelling if sentiment in a stock has been negative.

Insider Trends 

Investors an also take a macro approach to insider buying activity. GuruFocus lets you see which sectors, industries, and stocks are experiencing the most insider activity. If a sector has an unusual degree of insider buying across multiple stocks, that could be a signal of a coming breakout.

Model Portfolios   

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 another style, you can use GuruFocus’s model portfolios to find stocks from investment leaders.

You can simply mirror gurus’ portfolios or mix and match stocks from multiple gurus to construct your own portfolio. It’s always useful to see how professional investors construct their portfolios and to compare portfolios from multiple famous investors with different approaches to the market.

Popular gurus include Warren Buffett, George Soros, Carl Icahn, and more.

Stock Screener

GuruFocus has many pre-built stock screeners based on selected guru strategies. The all-in-one stock screener lets you create very flexible scans based on fundamentals, valuation ratios, price data, guru sentiment, and dividends. Popular pre-built screens include:

• Value Screeners
• Buffet-Munger Screener
• Ben Graham Net Screener
• Hedge Fund Guru Screeners

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 screener’s versatility and power make this time well spent.

When we first started on this GuruFocus review, we were most excited about the guru portfolios. However, as we explored the platform in more depth, we found that the stock screener is actually one of the best features of the platform.

Financial News

GuruFocus offers access to financial news from major 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 value if you’re already using GuruFocus for its guru portfolios or stock screener.

There is an abundance of opinion pieces and investment advice offered on the site. The news can be filtered by categories like:

• Research
• GuruFocus Editor’s Picks
• Guru News
• Value Ideas
• Dividend News
• And more

The news section of GuruFocus feels similar to Seeking Alpha. The news stories are unique and most are centered around the “guru” investing theme.

GuruFocus Pricing Options

You can register for GuruFocus for free to see the top holdings of popular gurus and access news articles. However, GuruFocus doesn’t give much away for free.

To really get much from the platform, you’ll have to sign up for a paid membership. There are thre options: Premium, Premium Plus, and Professional. 

The Premium membership costs $449 per year for U.S. market data. Some of the premium service highlights are alerts include real-time Guru trades, value strategies, model portfolios, five years’ worth of data for backtesting, an API with up to 2,000 queries a month, My Gurus watchlists, insider trends and alerts, interactive charts, and the all-in-one screener.

For traders and investors who are primarily interested in investing in US stocks, the Premium membership offers all of the GuruFocus features you need.

The Premium Plus membership costs $1,348 per year. It includes data for all financial market regions along with over 4,000 U.S. institutional form-13 filings and trading history, backtesting data from 2006, and 20,000 API queries.

The Professional membership costs $2,398 per year and offers up to 50,000 API queries.

GuruFocus also offers data for global markets. This costs $449 per year for Asian and European market data and $319 per year for market data for Canada, U.K./Ireland, Latin America, Africa, and Oceania. GuruFocus applies a $100 discount for each additional region you add to your subscription.

You can try out GuruFocus free for 7 days. All plans come with a 30-day money-back guarantee.

What Type of Trader is GuruFocus Best For?

GuruFocus is best suited for swing traders and long-term investors seeking ideas that are supported by the proven strategies of the financial industry’s smartest players. Realistically, most users will be interested in piggybacking off the ideas of the most successful market gurus. Intraday traders can also benefit from GuruFocus by monitoring real-time Guru picks and insider trade 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. That said, 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. For example, GuruFocus offers screeners to find undervalued companies and a look at the portfolios of numerous famous value investors.

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.

Is GuruFocus Worth It?

We were impressed with what we found during our GuruFocus review.

The Premium membership represents a great deal for value investors. It’s also worthwhile for day traders considering the timeliness of the information. It only takes one or two good trades to pay for the service for a whole year. That said, you should have a decently sized portfolio if you want to get the most value out of the service and the research tools provided.

A Premium membership starts at $449 per year and the Premium Plus plan starts at $1,348 per year. 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.

Alternatives to GuruFocus

GuruFocus is a unique platform, so don’t expect to find something that offers exactly the same type of data about guru and insider trades. However, GuruFocus isn’t the only option for long-term value investors and swing traders who want help researching stocks.

One alternative Motley Fool’s Stock Advisor. This only costs $199 per year, so it’s a good option if you have a small portfolio. Stock Advisor offers two ready-to-buy stock picks per month, so it’s also more beginner-friendly and less self-directed than GuruFocus.

Another alternative platform to consider is Finbox. This is a fundamental analysis platform that offers an enormous array of tools for finding high-quality companies. If you want to rely on your own strategy instead of mirroring gurus’ portfolios, this is a good option. Finbox starts at $10 per month.

Stock Rover is another fundamental stock research platform that emphasizes quantitative modeling. It’s definitely more complex than GuruFocus, but it offers a similarly outstanding stock screener and a wide range of research tools. Stock Rover plans start at $79.99 per year.

Pros   

• Generate investment ideas based on what market gurus and insiders are trading
• The all-in-one scanner has a great depth of functionality
• User-friendly interface with a mild learning curve   
• Excellent undervalued stock ideas and value investing strategies
• Strategy videos for value investing and other investment styles
• Great research tools to simplify the analysis process

Cons

• 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