Seeking Alpha Review: Is It Good For Stock Investing?

When performing company research, one interesting chart is a timeline chart showing how the stock has done over the last decade or so compared to an index such as the S&P 500. It immediately displays how much a $10,000 investment has risen or declined compared to the index.

It’s a simple technique to determine whether a stock has outperformed the market. A green line flowing upward is a wonderful sight.

Seeking Alpha, an investment research firm, does a good job with its quant ratings performance chart, which illustrates how well the stocks it has rated as strong buys have done since 2010.

As of mid-March 2022, stocks with the highest stock ratings assigned by Seeking Alpha have generated a total return of $175,620 on a $10,000 original investment in 2010, representing a 27% average yearly return. On the same investment, the S&P 500 returned $37,988. With the Seeking Alpha recommendations, an investor would have profited $137,632 more.

Seeking Alpha: What Is It?

David Jackson, a financial analyst, founded Seeking Alpha, an investing research website, in 2004. Its headquarters are located in New York City. Alpha is defined as the extra return on investment generated over the benchmark return.

According to the business, it is the world’s largest investment community, fueled by the crowdsourcing of millions of enthusiastic investors. Seeking Alpha claims that 20 million individuals use its monthly services to find research and investment ideas. According to the firm, there are over 200,000 members.

The site offers monthly stock analyses and opinions from over 16,000 active contributors. Before the content is reviewed and debated by readers, it is checked by in-house editors. This amount of crowdsourcing is not available on many research sites.

Seeking Alpha: How does it work?

Seeking Alpha’s free material is substantial and may be sufficient for beginner investors and mid-level traders. We’ll go over it further when we explain the site’s pricing, but the free material is an excellent way to test the waters and determine whether you need more in a Premium plan or Seeking Alpha Pro membership.

After reviewing the free offers, you may subscribe or register as a free user to gain access to more services by selecting the orange “Subscribe” icon in the upper right corner of the main page.

This will take you to a page where you can either begin a free trial or register for a Basic account, which is free but needs registration to access a few more features.

Signing up for paying plans is done through the center or right box, while the free Basic plan with limited access is shown on the left.

If you click “Register” for the free plan, you will be directed to a signup window where you may sign in with Google or Apple or your newly formed email address and password. After signing in, you will get immediate access to the site and the Basic extras.

To begin a free trial of the Premium membership or Pro plan, click “Start Free Trial,” which will lead you to a secure checkout that will require a credit card or PayPal.

The free trial lasts 14 days, after which the selected subscription will auto-renew unless you cancel. To avoid getting charged, cancel at any point within the 14-day free trial period.

How Much Do They Charge?

There are three membership tiers in Seeking Alphas. The premium plans come with a 14-day free trial.

Basic

The basic plan is free, but you must sign up with your email address. It provides restricted access to the site’s investing research, which includes:

• Email notifications for stock analysis
• News updated in real-time
• Newsletters for investors
• Stock prices and charts are available.
• Every stock has a Wall Street rating.
• Access to in-depth news and analysis is limited.

Premium

If you wish to test it out for a month, a premium subscription costs $30 a month. If you enjoy it and want to use the Premium plan for a few years, the best value is to pay $540 in advance for three years, which comes to $180 per year or $15 per month.

Premium users get access to all of the Basic features as well as the following:

• Access to Premium content is unrestricted.
• Author evaluations on Seeking Alpha
• Author performance on Seeking Alpha
• Stock valuations
• Dividend rates on stocks
• Ad-lite

Pro

The most expensive tier, Seeking Alpha Pro, costs $2,400 per year. There is no multi-year discount available. This service may be most appealing to active traders because it includes unlimited access, all Premium features, and:

• Top Ideas
• Newsletters and professional material
• Idea screen/filter 
• VIP service
• No advertisements

What Do They Offer?

Ratings

There are three stock ratings on Seeking Alpha: Quant ratings, Seeking Alpha Author Ratings, and Wall Street analyst ratings.

Quant ratings

Seeking Alpha is distinguished by its quantitative ratings. Only paying Pro and Premium members can access this unique quantitative analysis. The free subscription includes a restricted version.

Seeking Alpha’s quantitative systematic trading algorithm chooses the finest Strong Buy recommendations. It selects the finest stocks regarding value, growth, profitability, EPS revisions, and stock price momentum. These measures are compared to other companies in the sector to get at a predictive value.

According to Seeking Alpha, this backtested approach has outperformed the S&P 500 over the last ten years, defeating the market nine times out of ten. It claims that stocks graded 4.5 or above outperform the S&P 500 by around four times: 1,754% vs. 385%.

Author Ratings

A subscription to Seeking Alpha Author Ratings is required. The ratings are based on average ratings from Seeking Alpha contributors and are intended to demonstrate what the community feels about individual stocks. Paid members get access to current author stock ratings and the author rating history.

Wall St. ratings

A weekly compilation of Wall Street financial analyst ratings from over 100 banks and brokerages is updated.

Screener

Both of Seeking Alpha’s primary stock screeners need a paid subscription. The first is a stock screener for its top-rated stocks, which is available at both premium membership levels to assist you in finding stock ideas. The other is a stock screener for investing ideas that Seeking Alpha Pro members can access.

The top-rated stocks screener allows customers to search for stocks with the highest author, quant, and Wall Street ratings all in one location. Stocks are deemed “extremely bullish” as good buys may be found in seconds.

Users can also build stock screeners with 100 parameters to locate stock market investments.

Earnings And Conference Calls

Even the most active investors may find this a lot of effort. Still, if you want to perform some technical analysis and evaluate a stock’s earnings history or earnings per share revisions, Seeking Alpha provides earnings and conference call recordings to subscribers.

You may listen to the calls anytime you want or read the earnings call transcripts whenever you want.

Who Should Work With Seeking Alpha?

Seeking Alpha provides all investment strategies, while active investors may benefit the most.

New Investors: Because the Basic plan is free, new investors can try it out for as long as they like. They may rapidly realize how much they are losing by not being a subscriber. 

They will be sent to the subscription page whenever they click on something behind the barrier. Do this a few times, and you’ll be able to try a free 14-day trial of a Premium plan, which will cost $20 per month after that. If you want to check out the extra features for a few months, that’s still a bargain.

Intermediate Investors: Investors looking to save for retirement or other purposes may wish to start with the Premium plan. A Premium subscription is quite reasonable at $20 per month or $239 upfront for one year and should provide more than enough information to assist them to make financial decisions. The quantitative ratings alone may be worth the price.

Pro Investors: Serious investors who earn a livelihood from investing may benefit the most from a Seeking Alpha Pro subscription. It’s pricey at $300 per month or $2,400 upfront for a year. Short sales are permitted in the Pro membership, and traders may contribute to the Seeking Alpha community by giving their investment thoughts. 

Who should avoid Seeking Alpha?

Some people may be hesitant to acquire their investment recommendations from an open pool of people on the internet. Although trending information might be useful, much of the site’s research comes from individual users, so paying attention to what they say should involve evaluating an investment’s fundamentals through financial statements and previous performance.

When so much information is available for free online, it may appear that paying for a premium service is not worth it. If money is tight or you don’t see any advantage from being a paying Seeking Alpha subscriber, sign up for a free Basic membership and use it as much as you like. If you want to test out any extras, sign up for a free trial and cancel within two weeks so your credit card isn’t charged.

Pros

• The quant ratings are projections that can be worth the membership fee alone.
• Earnings calls are a one-of-a-kind service available to subscribers.
• The Premium plan is pretty reasonable for all its services, costing $239 per year.
• Plans can be canceled online at any time.

Cons

• For many customers, the free Basic plan would not be sufficient; they might soon encounter a barrier.
• It might not be your style to join a community of investors.
• Overwhelming amounts of information and publications are possible.

FAQs

What’s so unique about Seeking Alpha?

The quant ratings for Seeking Alpha authors are distinctive. Based on a unique formula, the quant ratings are very appealing.  According to Seeking Alpha, investing in the Strong Buy suggestions has outperformed the S&P 500 by a multiple of four over the previous ten years.

Do I have to be an active investor to use this site?

Although novice investors can choose several Strong Buy stocks based on the quant ratings and hold them for years, active traders may reap the most rewards. Passive investors should profit from Seeking Alpha’s suggestions, but they may want to sign up for stock alerts and check frequently to see if their stocks have dropped off the Strong Buy list.

Can I trade stocks through Seeking Alpha?

No. Unless they are also brokerages, few websites that conduct financial research execute trades. You can sync your portfolio with Seeking Alpha instead, but you’ll have to use your broker’s website to execute trades. It can sync your portfolio at any membership level, including the free Basic one.