Stockomendation – all of the tips at once
Today’s post is about Stockomendation, a tips aggregator that I came across last week.
Stockomendation (henceforth SM) is a subscription service, with premium packages at £100 and £150 per year, but there is also a free service, which is the one that we’ll be discussing today. The premium services are based around tracking and ranking tipsters, and there is also a social element in that individual subscribers can submit their own stock tips.
The free service sells itself on portfolio tools, a watch list and company information, but all of this is available elsewhere. We’re here for the tips.
Tipster hit rates
The first thing that you can do with Stockomendation is compare tipsters’ track records. The site uses the “Hit rate” to do this, a simple measure of what proportion of tipped stocks have moved in the right direction since they were tipped.
This is obviously simplistic, since the stock may have moved in the right direction at first, then moved back (or vice versa). SM makes reference to tips “timing out” after a fixed period, or ending when a price target is met, but there’s no drill-down into that data.1
But it’s still a fun game to play within those limitations, so I picked out ten tipsters that I’d heard of (there are more on the site, but not that many more). Here are the results:
That’s quite a spread of results, from 68% for the Share Centre down to 30% for Red Hot Penny Shares. We’ll come back to The Share Centre’s tips later.
Lots of tips
As you can see from the totals column in the table above, there are lots of tips on SM – more than 3000 for Investors Chronicle alone. And a decent amount of them are fresh. Here’s what the “latest stock tips” page looked like at the weekend:
All of those were added on Friday. When I scrolled down the list, I found that a grand total of forty-four companies were tipped that day:
The eagle-eyed will have noticed that the free account doesn’t show whether the tip was a buy or a sell, just a date and a start price. You can work around this by drilling into the individual tip, to bring up another screen which explains the Hit / Miss classification (Tip Performance):
Since the Share Centre won the battle of the tipsters, I thought it would be worth looking in more detail at their recent tips. Share Centre have already made 21 tips in March, but we’ll just look at the most recent ten.
Running the list through the 7C scoring system we use for the portfolios, we have the usual mixed bag. Three of the ten stocks score 20 or more (which is the level that we’ve been adding stocks to the portfolios). Another two score 19, which might earn them a place on the watch list.
Whether you will find Stockomendation of use depends on your approach to tips. I like to have a regular feed of ideas to research2 and it’s handy to have a lot of them in one place, but many will not be interested.
I’m less sure about combining this service with portfolio tools and league tables though. I’d rather see the work go into making the tips interface slicker. And I wonder how many people will pay for consolidated tips. I suppose some must or the tip sheets would be out of business.
I think that all this information should come free with the trading platforms. Hargreaves Lansdown do supply the Investors Chronicle tips, plus those from newspapers and brokers, but tips from the subscriptions sheets are missing.
In summary, for Stockomendation:
- SM has all the tips you could want, from the tipsters you recognise
- The Hit Rate table lets you see which tipsters you might want to follow
- Using the free account it takes a bit of work to get the data you need
- It will be a useful source of public stock recommendations for the Piggyback portfolio when we run out of portfolios to review
For the recent Share Centre tips analysed above:
- Berkeley Group and Lookers will be added to the Piggyback Portfolio
- InternetQ will be added to the SmallCap Growth Portfolio watch list (slightly expensive, no yield)
- BT group will not be added to the Piggyback watch list (expensive, high debt)
- Clarkson will not be added to the Piggyback watch list (expensive)
Until next time.