Zacks Premium Review
Used by many traders, Zacks Premium is a stock and financial research platform. Zacks Premium offers a deeper dive into analyst predictions with many tools and features. Read our in-depth review to learn more about Zacks Premium.
Zacks is a stock and financial research platform used widely by traders. While many traders are familiar with Zacks’ extensive free offerings – which include stock news and research articles written by analysts as well as stock and mutual fund screeners – Zacks also offers a Premium subscription service for traders who want to go deeper into analyst predictions.
The Premium service holds its own for traders looking for new ideas with top stock picks from analysts, analysis of potential earnings surprises, and more detailed stock filters and lists. The #1 Rank List of recommended stocks boasts a strong historical return, while pre-defined stock filters that separate value, growth, and momentum stocks provide actionable information for a variety of traders.
We reviewed ZacksTrade awhile back and now we decided to take a closer look at Zacks’ premium research services.
Zacks Premium starts with a 30-day free trial, after which it costs $249 per year.
Zacks Premium Features
Zacks Rank Lists
The most useful features of Zacks Premium for the vast majority of traders will be the Zacks Rank Lists. These are essentially lists of stocks that Zacks analysts have identified as the best stocks stocks to invest in. This is similar to the IBD 100 list offered in IBD’s Leaderboard and Marketsmith services. It’s a great tool for self-directed investors who want a starting point for their own research (vs. buy/sell alerts) and the lists are far more comprehensive than ones we’ve seen in other platforms like Action Alerts Plus.
The #1 Rank List is the most frequently used list – it covers stocks that Zacks analysts consider “strong buys.” Overall, the performance of stocks on this list has been historically solid – Zacks data indicates that the #1 Rank picks have yielded an average 25% return each year, although there are specific years where the picks have significantly underperformed the market.
The #1 Rank List is updated with upwards of 20 new stocks each day. That volume of stock recommendations is both good and bad, though, since it means that traders need to do quite a bit of research into multiple stocks each day to choose when and in which stocks to invest. In addition, there is an additional list displaying which stocks were added or removed from the #1 Rank List on any given day.
Helpfully, though, the Zacks #1 Rank List can be sorted by analysts’ categorization of stocks as “value,” “growth,” “momentum,” and “income”. It’s also easy to sort the stock list according to multiple parameters, including fundamentals like P/E as well as recent price movements. Finally, the list data can be exported to Excel with just a single button to give you the ability to create customized filters.
While Zacks does have #2, #3, and #4 rank lists – corresponding to “weak buy,” “neutral,” and “weak sell” ratings – these are relatively difficult to find on the site. The #5 Rank List, which displays stocks recommended for shorting, is easy to access. However, beware that the historical performance of this recommendation list is mixed at best – it has an average annual return of just 2% per year and has lost more than 50% of its value in some years. In addition, the #5 Rank List lacks most of the sorting and category ratings that you’ll find in the more popular #1 Rank List.
Zacks Style Scores
As a Premium member, you get access to the “style scores” that Zacks assigns to every stock its analysts review and that makes it into the #1 Rank List. These style scores rank each stock, on a scale of A-F, with respect to whether they are a value, growth, or momentum stock.
Zacks style scores are primarily helpful in two places: the #1 Rank List and the Zacks stock screener. In the #1 Rank List, as discussed above, you can sort the list according to whether stocks are rated as an A for value, growth, or momentum. In the stock screener, Premium subscribers can use value, growth, and momentum ratings as additional filters in screens.
However, keep in mind that the style scores are highly subjective and based on Zacks’ in-house algorithm. These style scores should be taken with a grain of salt, and more advanced traders will likely find them of mixed usefulness at best.
Zacks Earnings ESP Filter
The Earnings Expected Surprise Prediction (ESP) Filter is one of the most unique offerings in Zacks Premium. The filter is based on how Zacks analysts think specific stocks will beat the Wall Street expectations for their upcoming earnings reports – and is complete with specific EPS estimates from Zacks analysts. The ESP filter is somewhat surprisingly accurate – Zacks claims a 70% success rate – but it should be recognized as a relatively aggressive trading tool.
The filter does have some useful tools for short-term traders. You can filter stocks in the ESP list according to how many days away the earnings release is, the expected earnings surprise percentage, and the Zacks ranking of the stock. Note that there is a similar ESP filter for stocks that Zacks analysts believe will fall short of their earnings predictions.
The final major addition that Premium subscribers get to the Zacks platform is access to a suite of pre-defined premium stock screens. These screens are focused on either value, growth, or momentum stocks, but there are also a variety of screens for income stocks and stocks on the #1 or #5 Rank Lists.
While most of these screens could be recreated manually in the stock screener (with a Premium membership to get access to style scores), the pre-made screens are very specific and useful. While many traders may work from the #1 Rank List, there is a good argument to be made that the premium screens are the more useful tool for finding new trade ideas. Plus, since these screens are centered on different styles of stocks, they can cater to a wide variety of traders.
These screens are unique in that they incorporate proprietary data.
Unfortunately, you can’t directly edit each premium screen – but Zacks does provide you with the filters used so you can recreate it and modify it manually in the stock screener. In addition, while Zacks offers the ability to run a backtest on the premium screens, this requires an additional subscription to the company’s Research Wizard software that is separate from Zacks Premium.
Zacks Premium has a few modules that set it apart from the stock research and stock picking competition. Most notably, the Earnings ESP Filter is unique to Zacks Premium and can be a very valuable tool for aggressive short-term traders.
For long-term traders and less experienced traders, the style scores can be very informative compared to other stock research platforms. But the real power of the style scores is in the premium screens, which are pre-defined to make it easy to get new, actionable trade ideas for a specific style of stock.
While the majority of the Zacks Premium platform is built around the #1 Rank List, this is actually one of its least unique offerings – it is essentially a stock recommendation tool similar to Stansberry Research or Action Alerts Plus, and the sheer number of stocks added each day make it harder to use than those systems.
What Type of Trader is Zacks Premium Best for?
Zacks Premium can cater to both medium-, and long-term traders, but it is generally geared towards traders who need help with market research and who can benefit from stock ideas offered by expert analysts. The combination of the Zacks ranking system and the style scores allow the platform to work for a variety of medium- and long-term traders, especially when using the pre-built premium screens to narrow down stock recommendations.
That said, short-term traders can also benefit from Zacks Premium thanks to the momentum filters and Earnings ESP Filter. The ESP filter in particular makes it easy for short-term traders to find stocks that could experience large swings within the coming week following earnings reports.
Is Zacks Premium Worth It?
For many current Zacks users who rely on the platform’s research and recommendations, the biggest question may be whether upgrading to a Premium subscription is worth the money. Ultimately, it depends on what you need out of a stock recommendation platform – but the style scores, premium screens, and Earnings ESP filters are all highly actionable tools that add value. If you plan to use these tools for medium-term trading, they can easily pay for the $249 annual subscription fee. However, keep in mind that you can recreate the premium screens to some extent – sans style scores – with a free account and Zacks makes public at least one pick from the #1 Rank List each day.
- Access to Zacks #1 Rank List (“strong buy” recommended stocks)
- Value, growth, and momentum scores assigned to every recommended stock
- Actionable pre-defined screens
- Earnings Expected Surprise Prediction Filter is useful for short-term trades
- Overall strong historical performance from #1 Rank List and ESP filter
- #2 through #5 rank lists are relatively unhelpful
- #1 Rank List receives tens of additional stocks each day