Actionable stock picks can reduce the amount of time you spend researching and help you find promising companies that you may have missed. It can be a great way to create a new portfolio or boost the performance of your existing portfolio.
However, it is important to ensure that any stocks you choose to obtain are from trustworthy services with strong track records of outperforming the market. Otherwise, you may end up buying bad companies or investing at the wrong time.
In this guide, we'll explain how to use stock recommendations effectively and highlight five services you can use to get stock picks.
What is stock picking?
A stock pick is a recommendation to buy shares of a particular company at the current time. A stock picker – who recommends a stock – believes the stock price is about to rise.
Stock picks can come from professional stock analysts, friends and family, stock selection algorithms, and other sources. It always includes the name of the company to be purchased, and may also include details such as the recommended entry or exit price.
Stock Picks also includes recommendations for short selling stocks. However, sell-side stock picks are much less common than buy-side picks.
What to consider before pursuing stock picking
While stock picks can be very useful, it is important not to follow them blindly. Here are some key things to consider before buying recommended stocks.
What is the time frame?
Think about the time frame for your investment and make sure it aligns with the time horizon of the recommendation. Recommending stocks with a five-year investment horizon may not be appropriate for active investors with a one-year time horizon.
Does it suit your style?
Every investor has a different style and goal, and it's important that the stocks you invest in align with your interests. For example, if your goal is to invest in dividend stocks to generate cash flow, recommending growth stocks that don't pay dividends won't make sense for you.
Additionally, you should always ensure that you are comfortable with the risks and volatility of stock selection.
Do you understand what you are buying?
Smart investors always know what they own and why. Good stock picks come with an explanation of why the stock is recommended, and you should critically evaluate whether you agree with that rationale.
Stock picks can take some of the work out of finding stocks to buy, but it's still up to you to research and understand each pick.
Do you trust the source?
It's also important to consider the source of your stock picks. Warren Buffett's recommendation is completely different from the choice your colleague mentions to you.
You should especially consider the track record of the source of your selections. A person or service that has a consistent track record of finding outperforming stocks – especially in different market conditions – is more likely to be trustworthy.
However, even gurus like Warren Buffett sometimes make mistakes. Therefore, you should not blindly follow picks from a trustworthy source.
🏆 Top rated services 🏆
Our team has reviewed more than 300 services. These are our favourites:
What's the plan?
Even if you've been told which stocks to buy, you still need a plan for how to approach the investment. For example, you need to know what price you want to buy, how many shares you will buy, and whether you will continue to add to your position over time. You also need to decide when to sell for profit or when to cut losses.
Your plan should reflect your investment objectives and risk tolerance. For example, if you are trying to reduce risk, it may make sense to start with a small investment and set your stop loss at 10% below the entry price.
Best ways to get stock picks
Let's take a look at five services you can use to get reliable stock picks for a variety of investing styles.
Motley Fool Stock Advisor – Best for Long-Term Picks (5+ Years)
Stock Advisor is the leading stock picking service from the Motley Fool, a stock research company with an impressive track record. From Stock Advisor's launch in 2002 through March 2024, the service outperformed the S&P 500 by 664% to 151%.
Stock Advisor focuses on long-term growth stocks, and all recommendations have an investment time horizon of at least five years. The service encourages holding onto winners rather than selling them, and some picks have been in Stock Advisor's portfolio for more than 20 years.
When you sign up for Stock Advisor, you'll get two new stock picks per month. You'll also have access to two additional lists of stock picks. The ranking list highlights 10 stocks already in the portfolio that are worth investing in the most right now. This list of growth stocks highlights 10 growth stocks Motley Fool analysts think every long-term investor should own.
Key Features:
● Two new stock picks every month
● Focuses on long-term growth stocks
● The minimum investment horizon is five years
● Includes rankings and lists of founding stocks
Pricing: $199 per year
Special for new member
Get Stock Advisor for just $99 for your first year
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🏆 Top rated services 🏆
Our team has reviewed more than 300 services. These are our favourites:
Motley Fool Epic Pack – Best for variety
The Motley Fool's Epic Bundle includes a Stock Advisor subscription plus access to three additional Motley Fool stock picking services: Rule Breakers, Everlasting Stocks, and Real Estate Owners.
On a broad level, there is not much difference between stock advisors, rule breakers, and perpetual stockists. All three services focus on long-term growth stocks. Having access to all of these services means you get six new stock picks a month instead of just two.
The best part of the Epic Bundle is that it adds Real Estate Winners, which focuses on real estate-related stocks and REITs. These choices can help you diversify your portfolio into residential and commercial real estate and potentially protect you from a stock market downturn.
Key Features:
● Up to seven new stock picks per month
● Combines growth stocks and real estate stock recommendations
● Many REIT recommendations are paying off
Pricing: $499 per year
special offer
Save $200 on Epic Bundle
Find Alpha Picks – Best for mid-term picks
Alpha Picks is a relatively new stock-picking service from Seeking Alpha that launched in July 2022. From its inception through March 2024, the service outperformed the S&P 500 by 125% to 36%.
Alpha Picks offers two new stock picks every month. Recommendations focus on sector-leading stocks with strong momentum, and the selection is meant to be made for a period of one or two years.
This service does a great job of selecting stocks from different sectors each month, helping you build a more diversified portfolio. Additionally, the best stocks in the portfolio are rated as Strong Buys, giving you guidance if you have extra money to invest among new picks.
Key Features:
- Two new stock picks every month
- Focuses on stocks with strong momentum
- Stock prices buy strong to double
- The investment horizon is one to two years
Pricing: $499 per year
special offer
Get a discount on Alpha Picks
Find Alpha Premium – Best for new ideas weekly
Seeking Alpha Premium is a premium service from Alpha Pick and is best suited for self-directed investors. It provides access to in-depth equity research, including a wide range of valuation metrics, peer analysis, and financial health ratings. You can also access interesting editorials from Seeking Alpha contributors that advocate for and against buyouts of individual companies.
Seeking Alpha Premium does not release ready-to-purchase stock picks like Alpha Picks. Instead, it compiles a list of 30-40 top-rated stocks you can consider. The list includes stocks that receive high scores from Seeking Alpha analysts, editorial contributors, and a proprietary algorithm.
It is up to you to research the stocks on the list to decide which ones to buy. However, this list of top stocks is a great starting point that can save you a lot of time. Plus, it's refreshed every few weeks, so there are always new stock picks to explore.
Key Features:
- List of top 30-40 stocks to research
- New picks are introduced every week
- Access in-depth stock research
- Editorials written by professional stock analysts
Pricing: $239 per year
special offer
Try Search Alpha Premium for free for 7 days.
Scanners (such as FinViz) – Best for new ideas every day
Stock scanners enable you to quickly find stocks that meet a specific investment strategy. They don't exactly give you stock picks, but you treat the scanner results like stock recommendations that you should research further.
The advantage of using a scanner is that it can produce new results daily as a company's financials, ratings, and stock prices change. Additionally, you can use the scanner to find stocks to invest in through several different strategies instead of just one.
FinViz stands out as one of the best scanners for investors because it offers a wide range of technical and fundamental filters. You can build a strategy based on financial data, valuation, and growth, and then find entry opportunities based on technical setups. Best of all, FinViz is free to use with slightly delayed inventory data.
Key Features:
- Basic and technical filters
- Sort results based on additional parameters
- Visualize the scanner results with bubble plots
Pricing: free
Try FinViz scanners for free
Conclusion: Simple Ways to Get Stock Picks
Stock picks can help you build a portfolio that outperforms the market while reducing the time you spend searching for stocks to buy. When using stock picks, remember to make sure the recommendations come from a reliable source and fit your investing style.
We recommend Stock Advisor as the best overall stock picking service for long-term investors. Alpha Picks is a great option for more active investors, while self-directed investors can use Seeking Alpha Premium or a stock scanner like FinViz.
