Looking for stock ideas? How to get started in the markets? Access to quality research?
As Canadians, we don’t have many options when it comes to investment services.
So, I took it upon myself to have a look at one of Canada’s leading investment platforms, along with one of Canada’s fastest growing in recent times, Motley Fool and Stock Trades Premium.
Both the Fool and Stock Trades offer a Premium subscription service whereby investors can sign up for an annual fee – is paying for these investment services worth it?
Let’s compare these two leading Canadian investment services, because they have enough differences that make them completely unique platforms.
Let’s start with the basics, website navigation and move our way through both platforms.
Stock Advisor Canada Vs Stocktrades Premium Review
When looking at Stock Advisor Canada and Stock Trades Premium, the platforms are directed at Canadian investors who are looking to either start building a portfolio, or earn more from their current portfolios.
While Stock Advisor Canada focuses on Canada and U.S. stocks, Stocktrades Premium is a platform that exclusively focuses on the Toronto Stock Exchange and Canadian stocks. This is the only platform in the country that does this, and as a result, it has gained a ton of popularity over the two years it’s been around.
When it comes to an online service, ease of use and online navigation is incredibly important. When members first log in, members are greeted by two very different dashboards.
Immediately, StockTrades slicker and more modern platform is noticeable. The platform is simple to navigate and very intuitive. You get all the important information up front on the Dashboard, and you can immediately get caught up on any new information.
The Fool’s dashboard looks like a typical ‘blog’ site. Although not necessarily a bad thing, it does look dated and you have to go searching for most of the information.
Outside of the Dashboard and the look of the sites, navigation is pretty self explanatory on both sites.
If someone were to ask me what website would get me where I need to be faster, Stocktrades is the clear winner here.
Verdict: StockTrades edges out the Fool thanks to its modern design and informative Dashboard.
Let’s get into the specifics of what the services offer. These platforms are very different, however they both have a few similarities at their core that I’m going to discuss.
Both services offer a basket of stocks tailor made for a beginner investor. These are intended to be strong ideas for those just starting out or new to investing. Stocktrades titles their 10 annual picks “Foundational Stocks” while Motley Fool has no specific name.
Out of respect for the effort and research put into these ideas, I will not comment on the picks themselves outside of the fact they were well thought out and presented on both sites.
Neither site tracks the performance of their beginner stocks. Although Stocktrades Premium has stated they will release and track returns on an annual basis.
Verdict: Tie – nothing in this area sets either service apart.
With an investment service, naturally investors will be looking for top picks. You’d think it would be a simple explanation, but the delivery and detail of these top picks are very different.
The Motley Fool’s “Recommendations”
They offer 1 Canadian recommendation and 1 U.S. recommendation per month.
One of the issues that present itself with the Fool is the confusion around these recommendations.
It was not immediately clear to me if every pick on the list was still a buy and although they have taken steps to clean up their list by introducing categories, it still was a very confusing experience for me.
Compounding the issue, once a stock is recommended there are no consistent updates provided by the team.
As I navigated the list, many had not had an update since the original recommendation. In some cases, it had been more than a year since the last update.
As someone who is looking for guidance on what stocks to buy, looking at a year old report doesn’t exactly provide me with a ton of confidence.
Overall, it was a very difficult list to navigate and members are left to discuss among themselves (in the forums) whether previous recommendations were still in fact buys.
In terms of the company reports, these are once again structured like a blog post. Although quality is not an issue, the presentation of these reports lack consistency and varies from company to company.
At times, I could easily see it being overwhelming for beginners. It is unclear how these picks are made exactly, but they appear to be a mix of growth, value and income plays.
They have their list of historical picks and display a running average all-time return. You can also see the individual’s pick’s performance in relation to the TSX Index.
Stocktrade’s “Bull List” picks
At Stock Trades, the top ideas take the form of what they like to call “Bull Lists”, which take the form of the Growth and Dividend Bull Lists.
They also add two TSX-listed stocks a month to their Bull Lists, one growth and one income. One particular thing I noticed is that the Motley Fool charges a separate subscription fee for income stocks. So, this was a huge positive for me.
Their lists and investment thesis behind them are quite clear.
Those on the Growth Bull List are added as a result of strong growth prospects. Those on the Dividend Bull List are added with income in mind.
Unlike the Fool’s top recommendations, the team at StockTrades is diligent in their updates. Each report is updated quarterly, within days of the latest quarterly report.
And, I was pleasantly surprised to see a recent email about a stock they’ve decided to remove from their list due to what they felt was an excessive run up in price.
This gave me confidence in the idea that they truly do mean that if a stock is on one of their Bull Lists, they still have confidence in it.
They have a unique and well-structured format for both types of Bull List stocks (Growth & Dividend). They are easily digestible by both experienced and beginners alike and the investment thesis is made clear.
Furthermore, each report is supported by their unique ranking system (more on that later). There is no confusion around the list – if a company is on the Bull List, then they believe in the long-term prospects of the company.
Where Stocktrades comes up short, is in keeping a visual running tally of the performance of each of their Bull List picks.
Although they keep members informed via monthly updates, it is not front and centre on the site itself. The results are there, but a bit of digging is required.
Verdict: StockTrades with a slight edge – Surprisingly, both the Fool and Stocktrades have similar outperformance metrics relative to the TSX Index. And by the way, the results are honest, from both platforms.
However, the Motley Fool runs a bit of a different system as they tend to “double down” on their losers, which gives the illusion that a stock they’ve highlighted has gone up in price, when in reality it could still very well be a losing highlight since they first mentioned it.
Stock Trades on the other hand, tracks a pick against their results indefinitely, regardless of price movement or if they’ve removed it from their lists.
Both offer two stocks a month, and the research behind each is sound. So why does Stocktrades come out on top?
Two reasons. First, the Stock Trades reports are more engaging and can appeal to investors of all types.
Secondly, and more importantly, StockTrades is committed to updating each report quarterly, there is nothing stagnant on the site. As a result, there is no confusion around which stocks they consider to be good opportunities today.
Question and answer segment
Once again, not surprised that both had a Q&A section where members could ask questions.
However, the quality of the Q&A sites was vastly different.
While the Fool has an active forum, many of the questions are answered by members themselves. It also can take days, if not longer to receive a response directly from the Fool team.
In contrast, I’ve never waited longer than 24 hours to receive a response from either Mat or Dan. And, the vast majority of the answers went above and beyond what the members question was initially about.
The one thing I did notice was that on Stock Trades Q and A, there was next to no member to member communication. Which, in my eyes, is a positive.
I don’t doubt that both platforms have some relatively experienced investors, but if I’m paying for an investment platform, I want answers from the brains behind the operation.
In my opinion, Motley Fool’s Q&A platform comes well, well short of Stock Trades Premium. In fact, I would argue in many instances that the Q&A over at Stock Trades Premium is worth the price of admission alone.
The only reason I don’t give it a 5/5 is the fact that sometimes the navigation can be a pain, as all of the buttons like back, forward, edit etc. are found inside of the website. Clicking back on the browser window doesn’t work. It’s taken some getting used to.
This is where the similar features end
That is about all that the Motley Fool and Stock Trades Premium have in common. Both offer stock picks, and a question and answer segment. However, even though these are similar features, as you’ve read, how they’re handled is very different.
But now, let’s move onto the features that are unique to Stock Trades Premium.
And be aware, there are a ton of them.
Stocktrade’s Dividend Safety Screener
This was a feature I found incredibly useful over the course of 2020, especially navigating a stock market where dividend cuts were happening all over the place.
Stocktrades has an in browser stock screener that analyzes the quality of a company’s dividend. The companies are then ranked on a grade of 0-5 and updated every single week.
The tables are easily sortable, readable on both mobile and desktop (although a little clunky on mobile) and from a single page I can see dividend growth streaks, growth rates, payout ratios in terms of earnings and cash flows and more.
Stocktrade’s Growth Stock Screener
These guys call their growth stock screener the “backbone” of their whole service, and it essentially ranks Canadian stocks on their forward growth potential.
They say the screener ranks stocks on safety, growth and valuation, and spits rankings out on a weekly basis.
In turn, they e-mail out the stocks their screener highlights on a weekly basis. One thing you won’t be left without is constant e-mail contact from the guys at Stock Trades.
More impressively, at the time I’m writing this they say their screener has outperformed the TSX index in over 83% of the weeks they’ve been tracking it. I verified this, as they have all of the data available, and it is correct.
Custom stock research on request
This is something I am truly amazed they have time for. But, you can request an in-depth report from the guys at Stock Trades. This isn’t an add on, this just comes with your membership. One a month, however.
But, the one report I did request, I received within 4 business days and it was in just as much detail as a Bull List report. All of these reports are available to all members as well.
9 Model portfolios
I’ve never followed Stocktrades model portfolios, but there’s no doubt they’re outperforming in a big way. They’ve got 9 portfolios, all aligned with different age groups, risk tolerances etc.
As I’m writing this, all 9 of them are outperforming the TSX since inception, with a couple portfolios posting over 100% gains since December of 2018. Impressive, considering the crash and all.
This is a new feature they’ve introduced over at Premium (they’re constantly adding new features) and it highlights all of Canada’s major IPOs. They dive into news, produce stock reports on recent IPOs and are constantly answering questions on them via the IPO.
They invest in the IPO’s themselves as well, and are fully transparent about doing so. All they state is that you should be doing so with capital you can afford to lose. You won’t see any IPOs on their Bull Lists, due to the high risk nature of them, but this is a really cool feature nonetheless.
Marketing and upsells
This is a critical component for me. When I purchase something like this, I do expect to have access to the full platform.
With Stock Trades, marketing is completely transparent. You sign up, and you get absolutely everything they’ve indicated inside the platform. They promise, under no circumstances will you be upsold to another more expensive platform once they’ve got you in the door.
Motley Fool on the other hand, after a few days of being inside of Stock Advisor Canada, I was hit with upsells. More expensive platforms offering more explosive stocks.
The issue I had with this right away, is the fact they promised me the most explosive stocks for the initial price I paid.
There is a type of “get rich” style atmosphere with a lot of the content Motley Fool produces, and pitches to prospective and current members, including the fact they just have to pay a little more to finally get there.
I don’t get this with Stock Trades.
In fact, once I got inside of Premium the only emails I ever received were helpful emails to navigate the platform, e-mails about tutorials, new stocks, strategies and other Premium related content.
Let’s get down to the brass tacks shall we? Pricing.
Pricing is huge when it comes to the selection of an investment service. A platform can make you money, but it needs to be able to cover the costs of the platform and also help you earn a positive return.
If it doesn’t, you’re better off giving your money to a fund manager.
Stocktrades Premium comes in at $249.99 a year. I was given an initial 30% discount so I got in for around $175. Stock Trades states that the price you pay when you sign up (full price) is the price you’ll always pay, if they decide to raise prices.
And, this isn’t an empty threat, the company went ahead and raised its service from $199.99 to $249.99 this past October. So, those who got in before October were locked in to the $199.99 rate.
The Motley Fool’s pricing structure is just downright confusing to be honest. Prior to signing up, I was hammered relentlessly with random discounts that “only lasted 24 hours”.
Typically, they offer their platform for $99 for the first year. They say this is $200 off, so you’d think that the platform would cost $299 annually right?
Wrong. It’s actually only $199. So, they’re essentially stating their membership is worth more than it is, to make you think you’re saving more.
Overall, the extra $50 for Stock Trades Premium is well worth the cost, especially considering the plethora of extra features. However, I’m going to give a tie to both, as they’re both extremely affordable.
Stock Advisor Canada Vs Stock Trades Premium final verdict
Overall, these are both two solid services for long term investors who don’t have the time to do the research, don’t have the knowledge, or need some extra tools.
But overall, I have to give a large edge to Stock Trades. While the Motley Fool labels themselves as a stock picking service, Stocktrades Premium is a complete investment platform, and I’ve found myself logging in multiple times a week to use their tools to better my portfolio.
With the Motley Fool, I’ve essentially read their stock picks when they were emailed to me, and that’s that. They don’t really offer much more than this.
The information on Stock Trades Premium is updated frequently. I have significantly more confidence using their information over the Fools. I’ve seen some reports on Stock Advisor Canada that were more than a calendar year old. The oldest report from a stock pick you’re going to get on Premium is 3 months.
You pay $50 more a year for Stock Trades Premium, but that $50 is easily justified by the amount of features they offer.
Looking at Motley Fool’s other services, they charge separate subscriptions for dividend picks, IPO research and model portfolios.
So if you include what you would have to pay with Motley Fool compared with what you get at Stock Trades Premium, you’d be paying thousands at the Motley Fool.
The guys over at Stock Trades claim to have started the service and website because of a lack of quality Canadian stock information. For years the landscape has been dominated by sites like the Motley Fool.
In my eyes, they’re doing a hell of a job. I’m going to be picking one service to renew next year, and it will be Stocktrades Premium.