There is one thing we can all agree on; that whatever activity we take part in, we always try to make things as easy as we can for ourselves.
This includes investing in the stock market, which can be confusing, especially for beginners. Things only get harder when you realize that you have to do extensive research before investing in a particular stock.
Luckily for you, there are stock picking services that do all the hard work for you. Instead of letting you spend all your time digging on a particular company, the service does the research and recommends the stock for you.
In this article, we are going to discuss two of the leading stock-picking services i.e., Motley Fool vs IBD Leaderboard service.
We are going to discuss the similarities and differences so that you can decide which one is the best for you.
- A Brief Overview of The Stock Advisor and IBD Leaderboard
- What are the Similarities?
- The Differences: Stock Advisor Vs. IBD Leaderboard
- Which One is The Better Option?
- Wrapping It Up
A Brief Overview of The Stock Advisor and IBD Leaderboard
While the Motley Fool Platform was founded in 1993, the Stock Advisor Service launched in 2002, and it is designed to help investors make long-term picks. So, if you are an investor who is looking to buy and hold, this service is just for you.
The Stock Advisor has a way of pointing out stocks with the greatest growth potential and is credited with identifying the value in companies such as Amazon and Gilead. This is way before the firms grew into what they are today.
It gives you two stock recommendations per month, and they come with detailed reports explaining why they are worth investing in.
This service claims that its picks have averaged a return of 300% over its 18 years of existence.
The IBD Leaderboard is relatively new and has been ‘beating the market’ since 2011. The stock picks are more short-to-medium term and are based on the “CAN SLIM” strategy by William O’Neal.
The picks in the Leaderboard are based on both technical and fundamental signals, but the research report accompanying each pick is more advanced than with The Stock Advisor.
The reports include technical charts that show you the ideal entry and exit points.
What are the Similarities?
The main aspect that applies to both The Stock Advisor and the IBD Leaderboard is that they are stock picking services. Not only that, but the picks come with detailed reports explaining the rationale behind their selection.
Another thing is that both services rely on fundamental signals, although this applies less to the Leaderboard.
The Differences: Stock Advisor Vs. IBD Leaderboard
When we have a more in-depth look at both of these services, you will realize that there are glaring differences between the two.
We are going to break down and analyze some of these differences so that you can have a clearer understanding of what we are talking about.
1. The Performance Record
The Stock Advisor has been around for many more years than its competitor the IBD Leaderboard, and so has a longer track record. Not only that, but the Stock Advisor is also a better performer than the Leaderboard. It claims to have generated returns exceeding 300% since 2012, and this is quite remarkable.
As for the IBD Leaderboard, it claims a return of 77.7% over the last three years. Whereas this performance is impressive compared to the 44.3% for the S&P 500, it still lags behind The Stock Advisor, which averaged 84.8% over the same three-year period.
So, you can see that although The Stock Advisor is a better performer, the difference between the two is not that great.
2. The Investment Strategy
The Motley Fool Stock Advisor has a more straightforward setup, and it is purely based on fundamental analysis. Before they settle for a specific company as having the greatest potential for growth, the service’s analysts look at aspects such as the financial statements and reports, the company’s management as well as the industry trends.
You should not expect to find any guidance on The Stock Service about the ideal price to buy a stock on a given trading day. Instead, stocks may show up based on a catalyst or on specific trends in the markets.
As for IBD Leaderboard, it is more advanced and uses the “CAN SLIM” strategy, which involves both fundamental and technical factors such as:
- Current quarterly earnings
- Annual earnings growth
- New Products Introduced into the market
- Supply and demand forces
- Institutional sponsorship
- Market movement
So, we can see that stock appearing on both platforms have qualities that give you reasons to smile about the future.
3. The Pick Presentation
There is a difference in the format in which the picks are presented on both services. Let’s start with The Stock Advisor, which is somewhat straightforward. As a subscriber, you will be receiving one email per month with two top picks and their summaries.
Also, the stocks come with in-depth reports explaining why the analysts believe they have so much potential.
As for the IBD Leaderboard, you have to be keen as you will be dealing with an online dashboard, email alerts, and a mobile app. All these are designed to help you keep up with all the updates on the Leaderboard.
Just like The Stock Advisor, each stock pick is accompanied by a research summary. However, there is also an annotated technical chart that spells out the entry and exit points as well as the stop levels.
4. The Resources
When it comes to resources, both services are quite packed. For instance, all the picks on the platforms come with detailed research reports explaining to you why that particular stock has been recommended.
The reports on the Stock Advisor tend to offer more coverage as compared to the IBD Leaderboard. Besides that, both services have market commentary with the IBD Leaderboard being more frequently updated than the Stock Advisor.
5. The Pricing
Here, we find The Stock Advisor to be more affordable than the IBD Leaderboard. This service comes at $199 per year, but there are discount offers that may bring the price to as low as $99 a year.
The IBD Leaderboard is relatively pricey, and it comes at $69 per month.
6. Money-Back Guarantee
This is another aspect that creates a distinction between the two services. The Stock Advisor has a 30-day money-back guarantee provided that you sign up for the annual plan. In that period, you can see all the recommendations of the past year as well as the returns.
It is then that you can decide whether or not the service is what you are looking for.
On the other hand, the IBD Leaderboard does not have a money-back guarantee. Instead, it has a 14-day trial period whereby you can verify whether the returns are as the service claims.
However, the 14-day period is simply too short to determine whether the service has everything that you need to make it in stock trading.
Which One is The Better Option?
Before we spell put our winner, we can all agree that both services are handy in helping you beat the market due to the resources they offer.
But we can point out several reasons why The Stock Advisor is our top pick. For starters, it is affordable and gives you 30-days to try out the service. If it is not up to your standards, you can always cancel your subscription.
Then, The Stock Advisor has a better track record over the years. Over the last three years, the service boasts of a return of 84.8% as compared to 77.7% of the Leaderboard over the same period.
The Stock Advisor system is also likely to give you an easier time as compared to the IBD Leaderboard, which requires more time and attention to get what it’s all about.
Maybe the fact that the IBD Leaderboard is ideal for short-term trades is what makes it pricier, but the gap between the two is too big for us to understand this justification.
Wrapping It Up
If you talk to many of the stock market investors out there, they would tell you that stock picking services are one of the greatest inventions by humankind. These platforms save a lot of time that you would have used in conducting an extensive research on the best stock to invest in.
Now we hope that our comparison of the Stock Advisor by Motley Fool and the IBD Leaderboard has helped you decide on the one that would serve you best.
If you are a day trader, the IBD Leaderboard would be perfect, while if you are looking for stocks to buy and hold, The Stock Advisor would be ideal.
However, in general, we realized that the Motley Fool Stock Advisor outdoes the Leaderboard in so many aspects. Not only is it cheaper, but it also calls for less monitoring of the market. The track record is also something that makes the service so appealing.
But this does not make the IBD Leaderboard to be inferior as it makes use of both fundamental and technical indicators to end up with the top picks.