This Alpha Picks Review explores if this investing group lives up to the hype by outperforming the S&P 500 by nearly 2.5x as of July 2024.Quick Summary: Alpha Picks is an investing group run by the in-house quantitative analysts at Seeking Alpha.Every month, subscribers receive 2 new stock picks backed by the analysts’ research. Since 2022, Alpha Picks has returned 132%, vs. 48%, outperforming the S&P 500 by over 2.5X as of July 2024.Best For:Buy and hold investorsCapital appreciation-oriented investors PROSOutperformed S&P 500 2.5XReasonably PricedCommunity engagement CONSLimited track recordRequires familiarity with the Alpha Rating systemFeatures:2 new stock picks per monthExclusive investing articlesNearly real-time trade alertsMobile App?Yes, through the Seeking Alpha AppCurrent Promotions:Save $50 off your first yearWhat is Alpha Picks?Alpha Picks is Seeking Alpha’s in-house investing group. As I noted in my Seeking Alpha Review, Seeking Alpha hosts several contributor-based investing groups.Alpha Picks is a stand-alone investing group that is part of Seeking Alpha’s “Investing Groups.”Alpha Picks subscribers get 2 monthly stock picks selected by their in-house investment team run by Steven Cress, a former Hedge Fund Manager and senior trader at investment banking powerhouse Morgan Stanley.Every month, Steve provides an overview of the portfolio via webinar and the portfolio’s holdings.So far, the portfolio’s performance has been stellar—returning approximately 132% vs. 48% for the S&P 500 as of July 2024Alpha Picks ReturnsSince its inception in 2022, Alpha Picks returned 132% vs. 48% for the S&P 500 over the same period. While Alpha Picks returns are good for the year, a 2-year time horizon barely scratches the surface for an investor.TRY ALPHA PICKSLike most portfolios nowadays, it does hold some popular tech stocks like Meta, Google, and SalesForce, but honestly, I’ve never heard of most of the companies in the portfolio.The portfolio consists of approximately 30 stocks, with individual stock weightings between 2-4% of the total holdings, with a few outliers.Every month, Steve and his team provide a webinar update to discuss portfolio holdings and market updates like macro themes like inflation and interest rates. I’ve watched the webinars – they are about 30 minutes long, and Steve robotically reads off a prompter.Not all returns are created equal – let’s dig into the data:Approximately 24% of the holdings are in the Industrial sector, followed by 19% in Energy, 17% in Information Technology, and 16% in Consumer Discretionary.Most of the portfolio’s returns are driven by one stock, Super Micro Computer, Inc., which has returned over 234% since its purchase and constitutes nearly 9% of its holdings.I checked my Morningstar account and saw that Super Micro Computer has a beta of 1.28, meaning the stock is 28% more sensitive than the overall stock market, so it’s logical that the stock has generated solid performance over the past year.SIGN UP TODAYPortfolio Holdings At A GlanceNumber of Holdings: 30Weightings: Individual stocks between 2 – 4% of total holdingsTop 3 Holdings: Super Micro Computer Inc, M/I Homes, Modine ManufacturingTop 3 Sectors: Industrial, Energy, Information TechnologyWeighted Average Portfolio Beta: 1.06Investment ProcessBelow I explore Alpha Pick’s buying and selling criteria and how they perform their investment analysis.Buying CriteriaAlpha Picks uses a data-driven process to identify the most appropriate stock picks from Seeking Alpha Premium’s quant recommendations.The team selects two ‘Strong Buy’ rated stocks per month. One pick is added on the first trading day of the month, and the other is added on the 15th of the month or the next trading day.Each “Buy” must meet the following criteria:‘Strong Buy’ quant rating for at least 75 consecutive daysA U.S. Common Stock (i.e. No ADRs)Not a REITHas a 3-month average market capitalization greater than $500MStock price greater than $10Has not been recommended in the past 1 yearIn addition to the above criteria, the team seeks stocks that have a combination of:Value: Stocks that are considered undervalued compared to their intrinsic worth. These stocks trade for less than their actual or estimated earnings, dividends, sales, etc. Value investors look for bargains, believing the market has undervalued these stocks.Growth: Stocks with high potential for future revenue and earnings increases. These companies are expected to grow at an above-average rate compared to other stocks in the market. Growth investing involves more risk but also has the potential for higher returns.Profitability: Profitable companies are generally considered more stable and less risky to invest in. Metrics like return on equity (ROE), net margin, and earnings per share (EPS) are commonly used to measure profitability.Momentum: Refers to the tendency of a stock to continue moving in the direction of its current trend. Momentum investors capitalize on existing trends, buying stocks that are going up and selling those that are going down.Revised Forward-Looking Earnings Estimates: This term is a mouthful but super important. It means analysts have updated their earnings predictions for a company’s future. If estimates are revised upward, it’s often a bullish sign, indicating expected growth. On the flip side, downward revisions could signal trouble ahead.So what the above tells me is that the team applies a combination of quantitative and fundamental analysis to identify investment opportunities.CHECKOUT ALPHA PICKSInvestment ThesisSteve and his team then form an investment thesis for new recommendations using the above criteria.As a subscriber, I could visit Alpha Pick’s homepage and find the investment thesis posted chronologically.The investment thesis covers basics like an overview of the company, macro trends the company may benefit from, and an explanation of its business model.Further down in the article, the team describes its buy thesis, explaining its rationale for the stock factor grades.One cool differentiator I see is an analyst named Zackary replies to subscribers’ questions in the comment box, creating an engaging dialogue.Selling CriteriaSubscribers are notified via email when the team closes out or reduces a position in the portfolio.When a stock no longer scores well on fundamentals, valuation, and momentum relative to its sector, or if a stock is rated as ‘Hold’ for more than 180 days, it becomes a ‘Sell’ and is removed from the portfolio.Alpha Picks sells the entire position in a stock if any of the following occur:The rating falls to “Sell” or “Strong Sell.”The company announces an M&A event in which it is the target, or it announces a merger of equals.The rating falls to “Hold” and remains a “Hold” for 180 consecutive days (as long as the stock is not a ‘winner’ – see below).Alpha Picks’s “quant research” shows that their portfolio performs better when they let their winners “run.”A stock is a ‘winner’ when it doubles from the price at which it was purchased. For ‘winners’, if the rating on the stock falls to ‘Hold’ and remains there for 180 consecutive days, the team will only sell the initial investment in the stock. They will keep the remainder of the position in the portfolio.They only eliminate ‘winners’ if: Rating falls to “Sell” or “Strong Sell” Company announces an M&A event in which it is the targetThe company announces a merger of equalsAlpha Picks TeamThe Alpha Picks team is small. It’s run by stock picker Steven Cress and a junior analyst, Zachary Marx.Steven CressSteven Cress, a former hedge fund manager and senior quantitative trader at Morgan Stanley, makes stock picks.According to his LinkedIn, it looks like Seeking Alpha purchased the company he founded, and that’s how he became associated with Seeking Alpha.Zachary Marx, CFAThe Junior, who appears to be the only analyst on the team, is Zachary Marx. According to his LinkedIn, he has about 6 years of quantitative investing experience. Best ForAlpha Pick’s buy and buy-and-hold approach to investing makes this stock-picking service ideal for long-term investors and those seeking long-term capital appreciation.Buy and hold investors.Investors seeking capital appreciation.Given its broad market exposure, Alpha Picks is not ideal for income-oriented investors, day traders, or single-sector investors.PROs and CONs ExplainedLet’s explore the PROs and CONs of Alpha Picks a little more deeply. PROs:Investment Team with Legit Pedigree: Senior Portfolio analyst Steve Cress has serious experience. He founded his own hedge fund and spent many years as a Senior trader at Morgan Stanley.Market Outperformance: The portfolio has outperformed the market 2.5X since inception. I calculated a weighted average beta of just 1.06, making its performance even more intriguing. CONsLimited Track Record: Alpha Picks has only been around Since July 2022, so while their success is impressive, what really matters is providing investors with year-over-year returns.Requires familiarity with Rating Factors: Alpha Picks assumes you know the company’s rating factors and methodology, so if you aren’t, you’ll need to do some research after signing up.Price and ValueAlpha Picks is $449 for the first year ($50 savings) off of the full price of $499.For $449/year you get access to:2 new stock picks per month/24 picks per yearMonthly Portfolio Review VideosComplete Investment Thesis for Stock PicksCHECKOUT ALPHA PICKSBest AlternativesIf you don’t fancy Alpha Picks by Seeking Alpha, don’t fret. There are several excellent alternatives.1. Motley Fool Stock AdvisorWhy it Stands Out: The Motley Fool Stock Advisor shines with its specific stock recommendations, backed by detailed analysis and a strong track record of performance. This valuable feature aids investors of all levels to identify potential investment opportunities in the stock market. While Alpha Picks has had tremendous success, Motley Fool Stock Advisor has been around for many years, making spectacular bets on the largest tech stocks.Returns: +462% since inceptionBest For: Both novice and experienced investors who appreciate guidance on stock picks and investment strategiesPros: Provides specific stock recommendations, offers in-depth reports, and a solid track record of performance.Cons: Requires a subscription; not all recommended stocks may suit every investor.Price: $79/yearCheck Out Motley Foolor read our complete Motley Fool Review.2. Action Alerts PlusWhy it Stands Out: Action Alerts PLUS stands out for its transparency, giving subscribers full access to its portfolio and real-time trade alerts. The service prioritizes education, explaining the reasoning behind each decision to help subscribers understand investment strategies. It provides actionable investment advice and detailed recommendations on what to buy, at what price, and when to sell. Subscribers gain from monthly members-only calls, fostering learning and direct communication with the team. Lastly, it offers comprehensive market analyses and weekly roundups of market activity, changes in the portfolio, and future outlooks, keeping subscribers well-informed and prepared.Best For: Investors seeking real-time alerts on trades and insights into market trends.Pros: Strong Emphasis on Investor Education, 14 Day Free Trial, Easy-to-use InterfaceCons: Oriented towards short-term trading, Requires Active ManagementPrice: Starts at $16.67/moCurrent Promotions: None listedor read our complete Action Alerts Plus Review.Is Alpha Picks Worth it?Alpha Pick’s impressive performance over the past year certainly presents a tempting opportunity for many investors.However, considering the group has only been in action for a little over a year, I would tread cautiously if you think you will strike it rich with this investing group.I am more of an index fund type of guy, so I even felt a little strange when I signed up for Alpha Picks, but I thought it could help expand my view.For $40 a month, you’re not breaking the bank for a subscription; at worst, you’ll hopefully learn something new about investing.TRY ALPHA PICKSFrequently Asked QuestionsWhat’s the Difference Between Seeking Alpha Premium and Picks?Alpha Picks is an investing group. If you sign up just for the investing group, you don’t have access to all other contributor-based articles. Meanwhile, if you have a Seeking Alpha Premium subscription, you have access to all articles and tools but not the investing group.If you sign up for a Seeking Alpha Pro subscription, you have access to the Alpha Picks Investing Group and all the articles and tools Seeking Alpha has to offer.Our Review MethodologyInvesting in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:Tools and FeaturesWe dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:What is its main offering, and how does it compare to its peers?How effective are the risk assessment tools?Are there any value-added services like educational content?Price and ValuePrice matters, especially when it comes to investing, where every penny counts. We analyze:Subscription feesHidden ChargesPrice compared to the overall value receivedWe’ll let you know if the platform gives you the most bang for your buck.Ease of UseUser experience can make or break an investment platform. We assess:Interface Design – Is it intuitive and easy to use?Mobile app availability and functionalityCustomer Support – where applicable.Nobody wants to navigate a clunky interface when dealing with their hard-earned money.Stock BreakdownGood investing is rooted in great research. We examine:The quality of stock analysis toolsReturns on an absolute and comparative basisAvailability of real-time dataDepth of research reportsWe check if the platform provides actionable insights to make informed decisions.How We Do ItHands-On Testing: I signed up for Alpha Picks to actually provide real insight. This is how I give a unique perspective. We’re unlike some other sites where they simply rehash marketing materials.Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.Comparative Analysis: Finally, we compare each platform against competitors in terms of features, pricing, and user experience.We take a comprehensive approach so that you don’t have to.By sticking to this methodology, we aim to guide you toward investment tools that align with your financial objectives. Happy investing!Why You Should Trust UsOur reviews are unbiased and data-driven. While we may receive a commission if you purchase a product through our link, it does not impact our editorial integrity. In addition, all articles are independently reviewed by individuals with extensive experience in investing and personal finance. Lastly, for further validation, we often refer to authoritative financial sources like Morningstar, The Wall Street Journal, and Kiplingers, to name a few.