Stock advisor services can help investors quiet the noise and make informed investing decisions. Listening to the media or researching too many websites can confuse you or cause irrational investment decisions.
Stock advisor services like Motley Fool and Zacks help pinpoint the information you need to make these decisions. Like any service, they have many similarities and differences.
You should know everything about Motley Fool vs. Zacks to choose the right service. I’ve broken down each service for you below.
Motley Fool vs Zacks
Sometimes you want someone to tell you what stocks to invest in or to hand you the necessary research to make critical investing decisions.
That’s what Motley Fool and Zacks provide. Motley Fool is more of a stock-picking service with accompanying strategies and analyses, while Zacks is an in-depth research service that ranks stocks and lets you choose from the list how you want to invest.
Neither service invests for you; they suggest stocks and leave the rest up to you. Consider it like your personal advisor telling you what to do almost 24/7, with information arriving in real-time, so you don’t miss any great opportunities.
All About Motley Fool
Motley Fool is a stock-picking subscription service started by two brothers in 1993. They began as a small operation in a backyard shed, creating printed newsletters. Today, they have 1,000,000+ subscribers and many subscription options for every type of investor.
Motley Fool’s two primary subscriptions are Stock Advisor and Rule Breakers.
Motley Fool Stock Advisor
Stock Advisor is for the conservative and long-term investor. It provides stock picks for investors to purchase and hold for at least three to five years.
Stock Advisor has consecutively beaten the S&P 500 by three times over the last 19 years. Of course, this doesn’t mean every stock they recommend is a winner, as that’s impossible. But their overall average returns beat the market.
Motley Fool Stock Advisor
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Motley Fool Rule Breakers
The Rule Breakers subscription is for more aggressive investors looking for growth stocks who like to take chances. Of course, it’s a more aggressive approach, but this method may seem more plausible for investors who don’t want the set-it-and-forget-it approach.
Motley Fool takes a somewhat lighthearted approach to investments, making it less stressful and a little fun for investors. They use language that’s easy for beginners to understand but complex enough for experienced investors to get something out of it too.
Investors receive weekly newsletters from Motley Fool that include the latest stock picks, analyses, and information to back up their strategies. They also push through notifications when something is urgent, such as selling a stock they previously recommended.
Motley Fool doesn’t do the investing for investors, though. Instead, they leave that up to you. So you can take the information they offer and buy the stocks or skip it; there’s no obligation to purchase them.
All About Zacks
Zacks Investment Research offers independent investment research focusing primarily on corporate earnings estimates. Zacks offers a free option that anyone can view on their website; however, all free information is past content already pushed through to paid subscribers.
Therefore, the validity or value of the information may not be worth the time it takes to filter through it, which is why subscribing makes sense.
Zacks pulls readers in by offering two bear and bull stock picks daily. They also provide access to general market data, but the paid memberships offer much more.
A majority of the subscribers choose Zacks Premium membership, which I’ll focus on, but he offers two other memberships, too, including:
- Zacks Investor Collection ($59/month) – This membership offers access to eight long-term investment portfolios. It also includes content for every type of investor, from value to growth, exclusive tools and research, and Zacks Focus List.
- Zacks Ultimate – Includes everything from the Investor Collection plus private picks that are closed to new investors, market insights, and personalized investment approaches to fit your goals.
The Premium membership offers access to many lists and tools that everyday retail investors can use, such as:
- Industry Rank List
- Zacks #1 Rank List
- List of the top 50 stocks to focus on based on Morningstar research
- Stock screeners
- Style scores for ultimate stock ranking
- Earnings lists
As the name suggests, Zacks is heavy on research and best suits investors who use this information to make investment decisions. Unlike Motley Fool, Zacks doesn’t push out newsletters. Instead, investors must log into the website and search for the desired information.
However, the information you receive is exclusive and available for subscribers 24/7.
Motley Fool vs Zacks: Choosing the Best for You
As I said earlier, Motley Fool is a newsletter service. They send weekly newsletters that include the top stock picks. Every other Thursday, subscribers receive a newsletter with either the company’s top stock pick for the week or Best Buys Now.
The chosen subscription determines what you receive:
- Stock Advisors – Receive a stock pick every other week to add to your portfolio, plus a list of the top ten Best Buys Now out of the company’s 300 focused stocks. Some Best Buys Now are repeats from previous stock picks, so you get a second chance if you didn’t buy them when recommended initially.
- Rule Breakers – Receive a stock pick every other week based on the latest company earnings and growth forecast and a list of Best Buys Now from the company’s 200 focused stocks.
Each newsletter includes the stock pick and the reasons or strategies behind their suggestion. The combination of the stock pick and the reasons behind it can help you determine if you want to purchase the stock.
Motley Fool may also push out additional notifications if there’s a reason to sell previously recommended stocks. These notifications are sent in real-time so you can react immediately to protect your portfolio.
Motley Fool suggests stocks, ETFs, and mutual funds and considers all investment levels, from beginners to experienced investors.
When investors initially sign up, Motley Fool provides a list of ten starter stocks to build your base portfolio. From there, you can determine which stocks to buy based on their recommendations, but you’re never obligated to buy them, and Motley Fool doesn’t execute any trades for you.
Why Choose Motley Fool
Motley Fool has an incredible track record, so there’s no guessing if they’ll help you build a portfolio. Moreover, it’s built for both beginners and experts, so investors of all levels can benefit from the service.
Who Is Motley Fool Best For?
You should choose Motley Fool if you’re looking for ‘hand-holding’ when investing. The hand-picked stock suggestions help you determine what to invest in or at least provide a starting point to create either a buy-and-hold or growth portfolio, depending on the chosen subscription.
Zacks isn’t a subscription newsletter, but they offer a variety of tools and research to help you build a portfolio and may occasionally send newsletters, even in the free version.
Some of the most popular tools include the following:
- Earnings ESP Filter – The Earnings ESP Filter helps investors find stocks with a surprising probability of succeeding soon. However, you can also use it to find stocks with negative surprise earnings so you can sell the stocks in time.
- Premium Screens – Get easy access to the best stocks for your investment type, whether you’re a value, growth, or momentum investor.
- Custom Stock Screener – The custom stock screener allows you to search based on your chosen factors. There’s a large selection of criteria to filter your options.
- Portfolio Tracker – With Zacks Portfolio Tracker, you can receive information on the stocks you own to make buy-and-sell decisions. In addition, the tracker provides Zacks Rank and Style Scores in real-time and any other changes such as Earnings Estimates changes or Earnings Surprises.
- Zacks #1 Rank List – Stocks that made the #1 Rank List are within the top 5% of stocks predicted to perform well. The list changes daily and is a great way to start your morning before making any investment decisions.
- Focus List – Zacks Focus List focuses on the top 50 stocks long-term investors should consider. The stocks are chosen based on earnings momentum.
- Zacks Industry Rank – Filter and sort industries by their ranking to help you make investment decisions. The list includes over 250 industry groups.
- Weekly Market Analysis – A stock strategist provides market insights, reasons for choosing specific stocks, and sector allocation. The weekly analysis goes to all subscribers every Monday.
Why Choose Zacks
Zacks is best for more advanced investors with shorter-term goals. Zacks focuses on earnings estimates and changes, making it a service best for those who actively trade and want to monitor their portfolios.
Who Is Zacks Best For?
Choose Zacks if you’re comfortable frequently buying and selling stocks and doing so based on Earnings Reports or surprise earnings. Investors can use the suggestions and compare their portfolio to the Zacks Rank and Style Scores to determine if they’re headed in the right direction.
It’s best for investors with short to mid-term strategies, but long-term investors willing to actively handle their portfolio can benefit too.
Motley Fool vs Zacks: Similarities
Motley Fool and Zacks provide stock recommendations using different analytics.
In addition, both send newsletters (Motley Fool more regularly) and provide access to breaking news and immediate actions investors should take when the market changes.
Both platforms have free content to help investors determine which service is best.
In addition, you’ll get some degree of hand-holding from each service, helping you determine which assets to buy and sell.
Additionally, Motley Fool and Zacks continually beat the market. Of course, this isn’t a guarantee they will continue this trend, but looking at past performance can help determine which service suits your needs the best.
Motley Fool vs Zacks: Differences
The main difference between Motley Fool and Zacks is how they pick their stocks and what strategies they use.
Zacks focuses primarily on earnings estimates revisions and changes their rankings daily based on the latest occurrences.
Zacks Rankings are Based on These Key Factors:
- Do all stock advisors agree? Zacks researches the latest opinions on a particular stock to see if most analysts agree with their earnings estimates. When most analysts adjust their earnings reports for the better, the score increases.
- How much did the earnings estimate change? A significant change in earnings estimates will have a larger impact than a minor change, such as 2 to 3%.
- How accurate are the estimates? The accuracy of the estimates depends on the proximity to the earnings call. The closer the date to the earnings call, the more reliable or accurate they consider the information.
- Does the company have a history of surprise earnings? A company’s past surprise earnings dictate the Zacks score because those companies are more likely to have surprise earnings in the future.
Zacks puts all this information together to come up with Zacks Rank on a scale of 1 to 5, with 1 being a strong buy and 5 being a strong sell.
Motley Fool uses a different methodology to push specific stock recommendations to investors.
Here’s What The Motley Fool Suggests for Investors:
- Invest in at least 25 companies – Motley Fool provides a list of companies to invest in for a foundational portfolio. The list has 25+ stocks, but you don’t have to buy them all at once. Instead, you can buy them over time, building a strong portfolio.
- Hold onto the stocks for at least three to five years – Motley Fool provides a conservative approach to investing for long-term goals.
- Continually invest in new stock picks – Motley Fool sends out two new stock picks a month. Consider adding them to your portfolio as you can.
- Follow the sell recommendations – If a previously suggested stock performs poorly, Motley Fool may send out sell recommendations in real-time.
Motley Fool more directly tells investors what to invest in and when. Of course, you must buy and sell yourself, but their newsletters hold your hand and help you determine what you should buy and sell.
Motley Fool vs Zacks: Comparing Key Features
You should consider some key features when comparing Motley Fool vs. Zacks to help you decide.
If you’re after good customer service, Zacks wins in this category. Motley Fool is DIY-based with FAQs, message boards, and tutorials. Their customer service line is primarily for subscription and not investment questions. You’re better off getting your answers from the community or the educational material from Motley Fool when you have questions.
Zacks has a more robust customer service line, but they also have many DIY options, including FAQs, tutorials, and a variety of investment tools. Customer service is available from 9 AM to 6 PM EST, Monday through Friday.
Motley Fool and Zacks aren’t the only stock recommendation services out there.
While Motley Fool is somewhat unique in its service as it sends specific stock picks weekly, there are some main competitors to consider, including the following:
- Morningstar Premium: Morningstar offers insight from over 150 stock analysts to help investors focus on important data. They rank stocks, ETFs, and mutual funds, making the research and data easy to understand so investors can make smart decisions. Morningstar data is real-time and includes Portfolio X-Ray that allows you to link your portfolio and get real-time analyses on its allocation, performance, and diversification.
- Kiplingers: Kiplingers is another newsletter service that investors can subscribe to based on their needs, such as retirement planning or income generation.
Motley Fool uses a buy-and-hold strategy, whereas Zacks focuses on movers and shakers. As a result, their top stocks usually have the potential for earnings surprises and may be bought and sold more often based on their performance.
Motley Fool vs Zacks: Which Service Is Best for You?
Between Motley Fool and Zacks, you can cover a lot of ground. But each service is better for different types of investors.
I can’t say that Motley Fool is better than Zacks or vice versa. It depends on the type of investor you are and the information you seek. Motley Fool is the better service if you want hand-holding and someone to tell you exactly which stocks are a good buy right now.
However, if you want a service that offers the most in-depth research and analyses and focuses on surprise earnings reports, Zacks is better for you.
The key is to choose the service that suits your investment style and helps you reach your goals. No two investors have the same needs, so compare what each service offers to what you need and can handle and choose the right service for you.