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.com 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 deeper scans, forums, charts, articles and market coverage. As the name statues, 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 portfolios managers by enabling a piggy back approach.
GuruFocus.com Styles of Trading
GuruFocus has a similar appeal as Motley Fool with some advanced features. GuruFocus caters predominantly to the long-term investment style of trading with opportunities for swing trades, intra-day trading opportunities can arise too. 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 and guru activity alerts to get a leg up on the price action. Some of the strategies that can be taken from the data include:
CEO/CFO Buying Strategy
When insider buying news hits the tape, stock prices tends to spike. The moves are even more pronounced when the CEO or CFO is buying 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
A dinosaur doesn’t walk in the sand without leaving footprints. In the stock markets, these behemoths are institutional investors. 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 to report their significant holding. 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. This screen is unique to GuruFocus as it identifies pinpoints 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 enables users to pinpoint their concentrated research efforts. Industries seeing growing trend of insider buying may signal the next breakout.
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.
GuruFocus has many pre-built scans based on selected guru strategies. The all-in-one scanner give very flexible scans based from fundamentals, valuation ratio, Price, Gurus, Dividends and Customized. I like the valuation scanner to look for stocks trading below their cash-per-share value.
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 subscriptions 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, UK/Ireland, Latin America, Africa, Oceania and Canada. GuruFocus applies a $100 discount to each addition region added to 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 total. 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 the Service Best For?
This service is best suited for swing traders and investors seeking ideas supported by the actions of the industry’s smartest players. Realistically, most users (like me) are most interested in piggy backing off the ideas of the most successful market gurus. Intra-day traders can really benefit from the real-time Guru picks and insider trades alerts.
Is GuruFocus a Good Value?
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.
- Great stock ideas garnered through high-profile market moving actions by market gurus and insiders
- All-in-one scanner has great depth of functionality
- User friendly and relatively small learning curve
- Concentration of undervalued stocks and value investing strategies
- Loads of great strategy videos
- Great research tools to simplify the analysis process
- Piggy backing on other people’s trades can be dangerous
- Involves additional effort to evaluate the rationale behind guru stock picks