Unless picking stocks is your full-time job, you can probably use some help finding attractive opportunities or getting a feel for what makes a company tick.
Mark Hulbert, who produces the Hulbert Financial Digest, has been tracking investing newsletters for decades. Among the 180 letters he follows, The Prudent Speculator is a top pick for long-term performance. Its recommendations have returned 10.6 percent annualized over the past ten years. John Buckingham, who also manages the Al Frank Fund, edits Speculator. Buckingham looks for stocks that are cheap according to such measures as price to earnings, sales and book value (assets minus liabilities).
Hulbert also maintains an honor roll of newsletters that have produced above-average returns in both bull and bear markets for more than 10 years. Investor Advisory Service is the top performer since Hulbert created the list in 1998; it has returned 10.2 percent annualized over the past ten years, compared with 6.3 percent annualized for the S&P; 500. Its analysis comes from Seger-Elvekrog, a money manager based in Novi, Mich. Scott Horsburgh, president of Seger-Elvekrog, says his team looks for firms with sustainable, double-digit earnings growth and stocks whose P/Es are below their long-term average P/Es. The aim is to pick stocks that can double in five years.
Another top performer on Hulbert’s honor roll is Zacks Premium. Zacks Investment Research’s 85 analysts bird-dog brokerage analysts’ estimates and earnings surprises to produce a portfolio of up to 100 stocks. The letter’s picks returned 9.7 percent annualized over the past ten years.
— Web resources. David Jackson, founder and CEO of Seeking Alpha (seekingalpha.com), says too many sources of stock research underestimate the intelligence of their readers by assuming their audience needs to be told what to think. “There are always two sides to any stock story,” he says. “There are bulls and bears.”
Jackson thinks the writing on Seeking Alpha is more compelling than other sources because the site’s authors have real money at stake on the ideas they share (writers must disclose any positions relevant to a post, although the site is limited in how stringently it can enforce this). Seeking Alpha also offers free transcripts of conference calls that company officials hold after releasing quarterly earnings reports. The calls are a great source for getting a sense of the boss’s own expectations.
For the self-directed investor, little can beat the comprehensiveness and depth of Yahoo Finance. Fan Barry Ritholtz, author of The Big Picture blog (
), says, “Yahoo Finance has a ridiculous amount of information in one space. It’s mind-blowing how much stuff is free.”
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