Zacks Premium Review
This Zacks Premium review provides insight into the stock research service features like Zacks Rank, Equity Research Reports, the Focus List and the Premium Stock Screener. Is Zacks Premium worth it? Let's find out.
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About Zacks Premium
Back in 1978, a Ph.D. researcher analyzed hundreds of factors and hit on a stunning discovery:
Earnings estimate revisions are the most powerful force impacting stock prices.
This development led to the founding of Zacks Investment Research and the Zacks Rank method for harnessing the power of earnings estimates to generate market-beating returns. In fact, Zacks Rank #1 (Strong Buys) have more than doubled the S&P 500's +11.27% average annual gain since 1988. These Strong Buys average +25.57% per year on average since inception.
While stock picking services and investment newsletters often include Wall Street sentiments or interpretations, the Zacks Rank system is purely based on math.
|🏢 HQ||United States|
|🚀 Features||Stock picks, stock screener, research tools|
|🎮 Trial||30-day free trial|
|💻 Technology||Browser-based application|
Zacks Premium Features
Zacks Premium subscribers gain access to the Zacks #1 Rank List, Industry Rank List, Premium Screens, Focus List, Research Reports, the Earnings ESP Filter and some other excellent tools.
Zacks #1 Rank List
Let's start the Zacks Premium review with the core feature of your Zacks Premium subscription. Zacks Rank #1 (Strong Buys) is a list of stocks considered to have the best profit potential based on a mathematical evaluation of company details like earnings estimates.
Log in to Zacks, choose Services from the top navigation and select Zacks Premium. On the right, you find a little navigation called Premium Tools & Resources.
New stocks make it to the Zacks Rank list every day. The cool thing about this list is that you can sort by every available column, print it, or export it to Excel. At any given time, approximately 220 stocks are part of the Zacks Rank Strong Buy list.
How to Use
There are two main ways to use the Zacks #1 Rank List.
The first use case is to use the mathematical edge for stock research and analysis. Zacks offers a great set of research tools, and the Zacks #1 Rank list is only one of them. Investors can use the tools to find stock recommendations and ranks from existing investment strategies or build a strategy from scratch.
Alternatively, you may consider selecting stocks from the list to achieve a similar performance. In this case, the trading frequency can be exceptionally high.
Notably, Zacks Premium also gives access to the list of Zacks Rank #5 (Strong Sells). These stocks often look good but have performed more than 3-1/2 times worse than the market. So subscribers are advised to get rid of any of these stocks that find their way into your portfolio or watch list.
Zacks Premium is for investors who like to manage their own portfolios. You can implement your investment strategy using professional-quality research that is easy to use, even for casual investors.
On average, about 20 new stocks make it to the #1 list every day, and about 20 stocks lose their #1 list score and are removed from the list. Click on Additions/Deletions to access the portfolio changes per trading day. One possible portfolio rotation strategy could be to execute all changes market on close.
Does the Zacks Rank Really Work?
Zacks Rank works well. Stocks are categorized into 5 different ranks, where the Zacks #1 Rank is considered the most profitable rank.
|Zacks #1 Rank||25.57%|
|Zacks #2 Rank||19.14%|
|Zacks #3 Rank||10.74%|
|Zacks #4 Rank||6.46%|
|Zacks #5 Rank||3.16%|
The annual performance is tracked since 1988, and as of today, the average annualized gain is +25.57%. The system has beaten the market for 28 out of 34 years (including YTD 2021).
Zacks #1 Rank List performance within the past 5 years
- 2016: +27.43%
- 2017: +28.31%
- 2018: -7.40%
- 2019: +23.82%
- 2020: +33.86%
Now let's proceed with the review of Zacks Premium's other tools.Click Here for Zacks Premium Free Trial and Free 7 Best Stocks Report
Industry Rank List
Sector rotation is an important aspect for active investors to keep in mind. ETFs and mutual funds often rely on a specific sector or industry. Still, as a retail investor, you have the chance to adjust the portfolio based on particular strengths in particular sectors and industries.
Zacks analysts keep track of the recent positive earnings revisions and also for the negative ones. The Zacks Sector Rank and Industry Section helps to determine the sectors with the best positive earnings revisions. As of this writing, the construction sector leads the list, followed by finance and industrial products. This kind of research tool is helpful to any investor. You can also click on the Stocks button and then Sector Rank. Next, you can drill down to Industries in each Sector.
These screens let you become a research whiz on the Zacks platform. Beginners, more advanced traders and experienced investors will like this Zacks Premium feature a lot.
45 pre-configured stock screeners allow you to scan the markets based on specific criteria. Some rely on Zacks scores like the Zacks #1 Rank List. Others are independent of Zacks ranking algorithms and provide insights to stocks with recent stock price strength, dividend income details and fundamental data. Less experienced traders may feel overwhelmed at first, but this will change quickly since the screeners are well designed and easy to use.
Here are the main categories of the stock screener research tools:
- Bonus Screens
There are two remarkable features integrated into this research tool that I want to point out.
The Premium Screens are pre-configured, and you can check the exact screener criteria. First, choose your favorite from the list and click Run Screen.
The results will be displayed within a second. Now click on screener details to reveal the exact screener parameters. Let's use the Undervalued Zacks #1 Rank stocks screener as an example. If you click on it, you see the exact parameters:
- Zacks Rank = 1
- Price > 5
- Volume >= 100,000
- P/E using F1 <= 20
- Price to Sales <= 1
This feature helps you to understand the research tools and their results better. You can easily use it for your research and include filters like the Zacks ranking or use it to filter stocks for common criteria.
The Zacks Focus List is designed to give subscribers an edge for their portfolio by featuring the 50 stocks that are expected to outperform the overall market over a longer timeframe than the usual 1 to 3 months for Zacks #1 Rank stocks.
The list is curated by Zacks' Director of Research, Sheraz Mian. He picks the stocks based on the latest earnings to estimate revisions and includes stocks categorized as Zacks Rank 1 or 2. In addition, you gain access to an extensive research report for each stock by clicking on the symbol in the column called Report.
As of this writing, 22 of the 50 stocks on the list are up triple digits, and one is a quadruple. For example:
- Square, Inc. +1,060.1% since 3/28/17
- Sea Limited +414.7% since 3/26/20
- Lam Research +499.3% since 12/5/2016
- Boeing +131.2% since 3/23/20
- NVIDIA +259.4% since 5/20/19
The Zacks research reports are another highlight for Zacks Premium subscribers. You can use the search functionality on the Zacks platform and filter stocks to find the research report for the company of your choice or create a stock research report list based on the industry. A click on the symbol in the column Get Report reveals more than 1,000 in-depth reports with unique information.
The reports are available in Html format, but you can also save them as a PDF-file it for later reference. The report includes the company name, current price, price target estimates for the next 6-12 months, Zacks recommendation and rank, comprehensive insights into financial data and the price, earnings consensus and surprise.
The full report has about 8 pages and includes the following categories:
- Price, Consensus & Surprise
- Data Overview
- Sales and EPS Growth Rates
- Sales Estimates
- EPS Estimates
- Reasons To Buy
- Latest Earnings Report
- Industry Analysis
- Top Peers
- Industry Comparison and more
Earnings ESP Filter
Zacks Earnings ESP filter predicts positive earnings surprises with 80% accuracy and can be used to find stocks with the highest probability of upcoming positive or negative earnings surprises. Zacks uses the latest analyst revisions to predict potential surprises. The thesis is that when an analyst revises their evaluation closely before an earnings release, they may have insights and more accurate information at their hands compared to the time when the company announced their estimates a couple of months before. This feature can be powerfully combined with Zacks #1 Rank List to find the best candidates for the portfolio.
How Much Does Zacks Premium Cost?
Zacks Premium comes with a 30-day free trial and costs $249 per year after that. There are similarities in pricing with other trading services. For example, the Motley Fool Stock Advisor stock picking service costs $199 per year and Motley Fool Rule Breakers $249 per year. But with Zacks, you get access to more additional research tools and find recommended stocks with a mathematical edge instead of biweekly and monthly stock picks based on fundamental research.
In addition to Zacks Premium, Zacks offers a variety of actively managed services anchored in their ranking system and provides real-time buy and sell signals. For example, you can look into Surprise Trader, Home Run Investor, Stocks Under $10, Blockchain Innovators, Healthcare Innovators, Value Investor, Insider Trader, and more.
How do I cancel my Zacks Premium membership?
To cancel, just select Services from the top navigation and click on My Account. Then, in the left navigation, click Orders. Now turn off the Auto Renew option to cancel your membership.
Zacks Premium Review Summary
Zacks Premium is an excellent tool for value investors, long-term investors, and swing traders since it takes fundamental research to the next level. Zacks Premium combines the benefits of a stock advisor, stock picking services, and research tools. The price per year of $249 is reasonable, and it is worth it to subscribe.
The best way to find out is by testing Zacks with a 30-day free trial. The 30-day free trial provides access to all Zacks Premium resources and quickly answers whether Zacks Premium is the best choice for your investment style.
Zacks Premium is best for investors who want to combine the Zacks #1 Rank List of the best stocks with positive earnings surprises and the freedom to select the best stocks for the portfolio at their own discretion.
- Proven market outperformance since the inception of the Zacks #1 Rank List
- Stocks selected with mathematical accuracy based on latest earnings revisions
- New stock picks every business day
- Comprehensive tools and resources in addition to the Zacks #1 Rank List
- Export to Excel and PDF supported.
- Daily portfolio adjustments are needed to mirror-trade the Zacks #1 Rank List, although monthly rebalancing is recommended.
- Ads within the premium subscription area can distract from the research process.