Disclosure: Investor’s Business Daily has provided ValueWalk a free subscription to Leaderboard for this review.
Thanks to the Internet, almost any investor can be their own trader or broker because robo-advisors and other tools have made it easy to execute your own transactions. However, deciding which stocks to buy is still a challenge, even with the whole of the Internet to help you out. It’s easy to get so bogged down with the wrong information that you get side-tracked and end up buying the wrong stocks or making a trade that ends up going wrong, but platforms such as Leaderboard from Investor’s Business Daily can help you make better trades.
What is Leaderboard?
IBD offers several premium tools for investors who want to act like their own traders. Leaderboard is designed to help investors spot stocks that are about to break out. The platform takes fundamental and technical data and combines it all with IBD’s proprietary algorithms and insight from the Investor’s Business Daily team. Leaderboard then streamlines it all so that investors can easily see which stocks are settling into a solid uptrend.
The Leaderboard team keeps a running list of stocks that are at attractive valuations and sets buy zones so that investors can see when to buy and when to sell out of the stock. The platform is designed for investors with short-term investing horizons, so the suggested stocks are not meant to be held for long periods of time.
IBD boasts that Leaderboard has returned 15.38% year to date through June 8, compared to the 2.82% return posted by the S&P 500 over the same timeframe. That is quite a strong level of outperformance, especially given the weakness we’ve seen among hedge funds and institutional investors earlier this year.
Here’s what’s good about Leaderboard
Investors who spend a lot of time studying the markets and picking stocks could get a lot out of Leaderboard. The platform is a great place to start looking when you’re trying to find some new stocks to add to your portfolio. It helps to narrow your focus to a handful of strong prospective trades where you might be able to turn a profit off a short-term trade.
IBD keeps the list of stocks in Leaderboard rather short and nicely organized so that it’s easy to zero in on attractive names quickly. The Leaderboard team sets a buy zone and offers a very brief analysis of what’s going on with each company. The platform fits in nicely with IBD’s other premium products, making it easy to see the Investor’s Business Daily staff’s ratings for each stock. In some ways, Leaderboard takes the analysis offered through IBD Digital but then focuses it so that only the most attractive stocks are in the spotlight.
In addition to identifying stocks that are in the buy zone identified by Investor’s Business Daily, Leaderboard also has a watch list for stocks that the team is keeping an eye on. Investors who are really on their toes could even buy into the stocks on Leaderboard’s watch list before IBD even pulls the trigger on them. For example, Cheniere Energy is the only stock on the watch list in Leaderboard at the time of this review, and the buy range was set at $60.32 to $63.34. The stock had already blown past that buy range and soared to $68.50 by the time I had written this review. Investors who were paying attention to Cheniere Energy when IBD added it to the watch list may have caught this trade before it got away.
How Leaderboard’s stock charts work
As with IBD’s other premium products, stock charts play a pivotal role in how Leaderboard works. Clicking on the Cheniere Energy stock chart inside Leaderboard brings up a lot of detailed information in true IBD form. The first thing I noticed was IBD’s ratings for the company, and Cheniere has a low composite rating of 79, which may be why it’s still on the watch list rather than on the Leaders list.
The Leaderboard stock charts are similar to the charts in MarketSmith, although they aren’t exactly the same. If you’ve spent time learning how to glean information from the MarketSmith charts, it will be easy for you to read the Leaderboard charts. The Leaderboard charts don’t have as many details as the charts in MarketSmith have, which is good in some ways because it helps to focus your attention on the most important details.
Cheniere’s chart points out some of the things the Leaderboard analysis explains, which is how the stock continues to recover off its February 2016 lows. It will be interesting to see how quickly IBD changes its other ratings on Cheniere Energy, as the staff’s analysis points out that the stock’s relative strength line reached a new high recently.
Overall, Leaderboard is basically just another set of stock lists compiled by the Investor’s Business Daily team. One thing I would like to see is a comparison of all these different stock lists to explain why IBD includes certain stocks on one list but different stocks on another list. Leaderboard offers some excellent analysis and explanations that go beyond the basics offered in IBD’s other lists through IBD Digital. Leaderboard’s strength is the price specifics it suggests in terms of when to buy each stock that’s included on the list. If you want help building a shortlist of stocks using any of these signals, IBD Digital is a great place to start.
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