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Independent investors must have useful data and investment recommendations to make smart and financially successful moves on the stock market. Zacks Investment Research is one of the most popular investment analysis companies in the country.
Let’s break down everything you need to know about Zacks, including how they provide their investment analysis and whether they’re a good choice for your needs.
What is Zacks Investment Research?
In a nutshell, Zacks Investment Research is a company that provides research and analysis for stocks, mutual funds, and ETF investment.
The goal of the company is to provide accurate and useful research information so that investors who subscribe to the company will have a tangible advantage compared to others.
At this time, Zacks is run by an expert team of investment professionals who perform wide-ranging qualitative analyses for ETFs, mutual funds, and equities.
Zacks is best known in the industry for “Zacks Rank”: a proprietary rating system built by the experts mentioned above.
This system provides ratings for individual stocks so that investors know which stocks will potentially outperform the S&P 500.
Furthermore, Zacks includes a rating system for exchange traded funds and mutual funds. It’s mostly favored by independent investors, although investing professionals might also find some value with a subscription.
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Learn More: Motley Fool Review
Zacks Company Overview and History
The company was founded in 1978 by Leonard Zacks. Though it originally began with only basic tools and a few staff, it’s now one of the largest and most comprehensive investment firms in the industry.
Compared to other investment subscription software or platforms, Zacks is quantitative and focused on providing its members with high-profit potential.
This stands in stark contrast to other investment companies, which may be more focused on unbiased scaling or fundamental analysis.
Keep in mind that Zacks uses one mutual fund ranking system for US stock-based funds and a separate mutual fund ranking system for other fund types. This does mean that information from Zacks is often considered dense and complex, and it takes a little getting used to.
Related: Motley Fool Stock Advisor
Zacks Research Key Features
As mentioned, Zacks is primarily valuable due to its own mutual fund ranking system. This allows its members to distinguish which mutual funds are most important for investment or which hold the highest profit potential.
As of September 2020, almost 19,000 mutual funds were being actively tracked with the Zacks Rank system.
With this system, Zacks gives every fund a ranking between one and five. Rankings of one mean that the firm recommends that you invest in each stock or index fund. A ranking of five means that you should try to sell the stock or fund.
Related: How to Invest $1,000
How Much Does Zacks Investment Research Cost?
Zacks’ cost depends on the membership package you choose to utilize. However, anyone can start trying Zacks for free since the basic membership option doesn’t cost anything.
The paid packages cost:
- $249 per year for a Premium subscription. This comes with a 30-day trial
- $299 per month or almost $3000 per year for an Ultimate subscription. Members can try this membership option out for $1 for one month
- Lots of member services. Investors with Zacks can take advantage of tons of free services and perks, like insightful articles, a daily newsletter, the Zacks Rank system, and more.
- Zacks Rank. This titular ranking system is easily the star of the show. It includes an excellent ranking program so you can tell which stocks, ETFs, and mutual funds hold the highest potential for profit.
- Good site navigation and functionality. Zacks’ website is pretty user-friendly and intuitive, even when you get to the higher-priced subscriptions with more features.
- Zacks is a relatively in-depth investment platform, so beginners may find themselves overwhelmed, even with the basic package.
- Zacks is also quite pricey, especially when you get up to the middling and highest priced subscription tiers. Premium is a better choice for many since few will see the value in paying almost $3000 per year for some extra tools and insights.
Zacks Investment Research Packages
Unlike many other investment firms, Zacks offers several membership options. You can actually start with Zacks for free with a basic membership plan.
Included is the Zacks electronic newsletter, chock-full of valuable information and advice for potential investors.
Free members also get the Zacks Portfolio Tracker, which allows investors to check out the Zacks Rank and other scores for a variety of stocks, mutual funds, and ETFs.
Learn: Index Funds vs Mutual Funds
#1. Zacks Premium
In addition to everything before, Premium members will get access to funds that are top-ranked by the Zacks Rank system, plus full access to company research reports, screening tools, and more in-depth rankings.
These members will also get detailed information about their Zacks ratings as well as daily email alerts.
#2. Zacks Investor Collection
The Zacks Investor Collection membership is a kind of middling option between Premium and Ultimate. It offers everything in the above membership tier as well as the ability to buy and sell certain stocks under $10 in real-time.
It’s a potentially good choice for those who don’t mind doing a lot of research for themselves and who still want the tools and ranking from Premium, but without having to totally empty their wallets for Ultimate.
#3. Zacks Ultimate
The Ultimate membership gives Zacks members access to every recommendation the firm produces, plus even more in-depth research and report tools.
This highest tier of membership comes with additional strategy recommendations that are broken down into exacting detail, like the number of trades you should make per month, how many stocks you should have in your portfolio, and so on.
Interestingly, members can also pay for each strategy at an individual price if the Ultimate subscription is a little too pricey to stomach.
Ratings: How Zacks Ranks & Compares Assets
Let’s break down exactly how Zacks ranks and compares the assets on its site.
For starters, Zacks offers a basic investment report for mutual funds, including performance numbers and other basic fund information like its size or manager details. Zacks shows the top nine funds by default.
Furthermore, Zacks showcases how a fund will perform on a zero-sum scale and compares it to a benchmark rating.
The site then provides annual data points like the total return for the fund, the annual dividend yield, fund assets, dividends paid, capital gains paid, and so on. Members can see three and five-year measures for individual fund ratings.
In addition, Zacks uses a colorful pie chart design to break down stock sectors, as well as breakdown asset classes and style analyses.
Each fund gets a one-paragraph description that tells you about the history of the fund and the original investment objective, plus capital gain frequency and schedule alongside other information.
Basically, Zacks provides a wealth of information and ranks funds based on individual data points. It ranks stocks with rising earnings estimates in the hope that they might be able to outperform the S&P 500.
How Good is Zacks Rank?
Zacks.com itself states that its stock-rating system could have theoretically produced an average gain of over 25% every year over the last 30 years, had someone used it that entire time.
Ultimately, Zacks Rank as a rating system is a strong tool and investment analysis estimate system for long-term traders who want to specifically target stocks and funds that might eventually outperform expectations from the market at large.
It may also be useful for short-term traders that are interested in Zacks’ opinions of the market and general trends.
Is Zacks Research Any Good?
Yes. The site is run by a team of financial and investment experts that put together their ranking system years ago. Since then, it has produced worthwhile and valuable results for long-term members.
Related: Best Stock Analysis Websites
Is a Zacks Investment Research Subscription Worth it?
That depends on your investment goals. We’d say that Zacks’ free and middling (Premium) membership options are quite valuable without being too pricey for comfort.
However, the Ultimate subscription is so expensive that very few people will likely want to take advantage of a few extra tools and analytical sheets that come with the price uptick.
In the end, Zacks is a worthwhile investment analysis company that could help you see better long-term returns for your investments.
Bottom Line: Zacks Investment Research Review
Zacks Investment Research is one of the most successful and largest investment research firms in the US. It’s a worthwhile service for many who want to enjoy long-term success on the stock market and who will actively take advantage of its fund recommendations.