Is Altimetry’s “Hidden Alpha” Legit? [Unbiased Review]

Welcome to my Hidden Alpha Review.

As one of the investment research services published by Altimetry, it is all about trading large-cap stocks that have the potential to deliver big returns without exposing you to a lot of risk.

Prof. Joel Litman, the editor behind it, claims that he can expose inconsistencies in financial reports and use that information to identify stocks that, from the outside, look unlikely to move the needle in a significant way but that are actually severely undervalued. He’s put together a report called the Stock X Ray Machine where he details his strategy.

In this review, we will be taking a closer look as Joel’s system and examine its merits and downsides. Read on to find out more in this Hidden Alpha Review.

Before I start…

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Altimetry’s Hidden Alpha Review

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Introduction to Altimetry’s Hidden Alpha

Altimetry’s Hidden Alpha is an investment research service offered by Altimetry, an independent publishing firm, and edited by chief investment strategist Joel Litman.

It is one among a few other stock market services offered by the firm and Professor Litman. For example, the professor edits another closely related one called Altimetry’s High Alpha where he shares his alpha hidden strategy that also uses the Stock X Ray Machine.

With Hidden Alpha, and the Stock X Ray Machine, Joel concentrates on large-cap stocks that he feels have huge profit potential (his other service, High Alpha, is all about small-cap stocks). His goal is to find big-cap stocks, which if he invests in, can generate alpha [EXTERNAL LINK]. If you become a member, you will learn how his Stock X Ray machine strategy works.

These are usually companies that are doing better than what most investors think. Therefore, their performance when their true value is priced in tends to surprise people.

Investing in undervalued stocks that can beat the market (generating alpha) is a common strategy used by money managers and hedge funds on Wall Street. I encountered this before as I was reviewing Teeka Tiwari Alpha Edge and again while I was going through The Alpha Signal System by Graham Summers, just to mention a few.

How Does Hidden Alpha’s Stock X-Ray Machine Work?

Speaking of Joel’s strategy, he utilizes an analysis system called “The Altimeter” (aka the Stock X-Ray Machine) which he and the hidden alpha team spent a decade developing.

He uses it to find more than 130 discrepancies between the numbers that companies report publicly in their financial statements (while adhering to GAAP guidelines) and the actual numbers that reflect the true financial health of the company. He’s been known as the stock cop due to the in depth research he undertakes.

He claims that understanding these discrepancies and determining what they indicate about the future of a company can enable you to earn a lot of money even from relatively stable stocks.

Joel’s team of more than 100 accountants and analysts carry out market analysis on thousands of American stocks using proprietary forensic accounting techniques. They load all that data into The Altimeter, which filters them.

They end up with around 200 stocks that have shown the greatest disparities between actual value and the market’s perceived value (reported earnings) which allows them to provide trading tips and stock recommendations to their subscribers.

They filter those stocks further by running earnings calls forensics and end up with a list of about 30 that have the greatest upside potential. After that, they sort them according to size and volatility and end up with the best candidates for investment.

With a subscriber registration account, you have access to the Stock X-Ray machine, it provides you with analysis of over more than 1,700 companies that it has assigned a grade ranging from A to F based on viability.

When you want to find out whether a company is a viable investment, all you have to do is click on it and it produces an image that looks like this (the image below is from one of Joel’s presentations advertising the service):

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Who Is Joel Litman?

Altimetry’s Hidden Alpha is edited by Professor Joel Litman, who is often referred to as the Stock Cop. Joel Litman is the CEO of Valens Research in addition to being the chief investment strategist of Altimetry Research. He specializes in offering advice to investors on matters to do with corporate credit, macroeconomic strategy, and equities.

He reminds me of other experts I’ve come across lately such as Jeff Brown and Teeka Tiwari.

He works closely with Rob Spivey (director of research), Paulo Gutierrez (Chief Information Officer), and Sam Latter (editor in chief).

He is a Certified Public Accountant (CPA) with a BS in Accounting from DePaul University. He is also a member of the CFA Institute and the Association of Certified Fraud Examiners and has an MBA/MM from the Kellogg Graduate School of Management at Northwestern University.

Prof. Litman is a professor at Hult International Business School, an international MBA program. He has also taught at the University of Chicago Booth, Harvard Business School, SAIF Jiao Tong, and Wharton, just to mention a few.

Joel Litman has spoken at various financial and industry conferences around the world and is the chair of the UAFRS Advisory Council, which advocates the use of Uniform Accounting.

Owing to his experience in as an economist, Joel has been featured by Barron’s, Institutional Investor, and Forbes and contributed to SeekingAlpha. He has also appeared on CNBC as a guest commentator.

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What you get when you join Hidden Alpha

If you subscribe to Altimetry’s Hidden Alpha, you will receive a complete rundown of the latest stock recommendation, warnings, predictions, and forensic analysis on the first Monday of every month.

Apart from that, you will regularly receive updates regarding your open positions along with other important updates from time to time. Those updates will also guide you on how to take full advantage of various situations to maximize your earnings.

You will also receive a comprehensive research report called Stock X Ray Machine Quick-Start Guide that covers everything that you must know if you wish to understand how Joel’s investment strategy works. You will also learn how the proprietary truth detecting system works when analyzing thousands of stocks.

Joel claims that the data he uses to identify stocks for Hidden Alpha is used by large hedge funds, government-run sovereign funds, high net worth individuals, money managers, and institutional investors and that they pay tens of thousands of dollars per year for that kind of research.

Access to the model portfolio

When you sign up for the newsletter, you get access to the model portfolio where Litman gives you a complete breakdown of all the stocks he thinks are likely to generate hidden gains, the right price entry points, as well as expected returns.

The model portfolio also enables you go gauge the performance of the newsletter.

Bonus Reports

When you join Hidden Alpha, you will have free access to the following reports:

 The 3 Pillars of the Internet

Joel reveals three companies that he claims will be responsible for the next ten years of the infrastructure that will keep the internet going. He calls them “the pillars of the internet.” Joel believes that these companies will dominate technology for the next ten years.

The Giants of Online Shopping

In this special report, Joel highlights the significance of the eCommerce industry, especially since it thrived during the lockdowns. He acknowledges that online shopping is going to be even more important in “the new normal.”

He has identified two stocks and the first one is a payment processing company that handles over $2 billion worth of transactions every day from people shopping online or making remote payments. It is quite ubiquitous because it is used by eight out of every 10 online shoppers.

The second company provides cloud computing services to big technology firms. It generates revenue of up to $60 million per month.

How to Be a Stock Cop: The Secrets of the L.O.C.K. System

In this report, Joel explains his thought process and why he thinks his technique works. He walks you through his process of identifying market trends step by step as well as how you can use his method to find hidden gems in the stock market.

He also gives you an introduction to the L.O.C.K System, which he uses to make predictions of the market. Previously, the L.O.C.K System was only available to his Valens Research clients.

The 14 Fad Stocks to Sell Before You Get the Vaccine

In this one, Joel explains why many companies that thrived during lockdown while people were working remotely and spending most of their time indoors will lose their edge when the economy reopens fully. He wants you to remove these stocks from your portfolio if you want to avoid losing money when this materializes.

3 High-Flying Home Entertainment Stocks to Buy Now

This report centers on the companies that are gaining the most in the video streaming and gaming industries. Litman says that the pandemic has had an impact on both industries and specific companies stand to benefit more from that by earning huge gains.

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How much will you pay to join Altimetry’s Hidden Alpha?

If you subscribe to Hidden Alpha Today, there are two subscription options available:

1. You can opt for a one-year Hidden Alpha subscription that is priced at $99. It renews automatically every year with each subsequent year (after the first) costing $149. If you don’t want it to renew automatically, call customer support to cancel any day before the day it is due to auto-renew.
2. You can go for a lifetime membership that will cost $599 upfront with an annual maintenance fee of $24. This means that you never have to pay regular subscription renewal fees after that. The maintenance fee, according to the publisher, is meant to “cover the cost of administration and data licensing.” Ultimately, this subscription plan is designed to save you money in the long run..

The price you pay for a subscription also depends on whether you qualify for a discount. For example, as part of a marketing campaign, you may only be required to pay $49 for a one-year subscription, which is 75% off the normal retail price of $199.

Is there a money back guarantee if you cancel your subscription?

You have thirty days to cancel your subscription package.

If you call the customer service team within those thirty days, you may receive a complete refund or they may ask you to divert your subscription fee to any other service they offer worth the amount due. The customer service team will advise you accordingly. You can reach them by calling 1-800-701-9346 or by sending an email to info@altimetry.com.

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Pros

• Large-cap stocks are some of the safest investments because they are not volatile. They are also well-established enterprises.
• If you find Joel’s insights to be helpful, you can significantly minimize the amount of money you spend on the subscription fee by choosing the lifetime membership option.
• You gain access to a team of analysts and accountants with tools you’d otherwise not have if you do things alone.
• Hidden Alpha has a lifetime access option that enables you to extend your membership indefinitely if you like the service. This ultimately adds up in savings on your credit purchase in the long run.
• It has a good BBB rating because it has a track record of earning decent returns.

Cons

• Although investing in large-cap stocks is relatively safe, like any investments, you are still subject to market risks and may lose money.
• The refund policy may prevent you from getting your money back.

Is Hidden Alpha Legit?

I think Altimetry’s Hidden Alpha is a legit investment newsletter.

With the help of a team of analysts and accountants, Prof. Joel Litman breaks down the financial documents of thousands of companies, re-orders the data in a uniform way to get a sense of the true financial health of those companies, and picks the ones that show a huge disparity between their actual value and their market value.

One of his picks was a streaming service that blew up in the wake of the pandemic with more people having to work from home.

Does his analysis guarantee that you will become rich (from his recommendations)?

The short answer is: I don’t think it will. The longer explanation is that his recommendations, no matter how great they look on paper, are still subject to market risk. As such, they may underperform (compared to his projections) or even lose money.

That being said, I think his advisory service is legitimate and something that can provide you with tremendous value.

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Altimetry’s Hidden Alpha Verdict

Altimetry’s Hidden Alpha is an investment advisory research service that is edited by Professor Joel Litman and published by Altimetry Research.

It is geared towards providing its members with recommendations that are large cap stocks whose value has not been portrayed accurately by the market due to inconsistencies in financial reporting by the company intentionally or unwittingly.

Although Joel Litman is a qualified analyst, I wouldn’t sign up expecting to become rich all of a sudden because that may not happen, particularly when investing in large-cap stocks. Therefore, if you are considering joining, temper your expectations and understand the potential risks involved.

The good news is the stock market strategies are legitimate and are even used by hedge funds; they are not fad stocks. Joel also has a proven track record when offering investment insights and his research reports speak for themselves.

If you want to receive insights from Prof Litman, you may find Altimetry’s Hidden Alpha to be worthwhile (as well as his Stock X Ray Machine report because it explains his line of thought).

Just remember that some of the promos you see are from a new marketing campaign designed to sell you into the newsletter, so you’ll still need to do due diligence and take any claims with a pinch of salt.

Since we have covered the most important aspects of the newsletter, I hope you find this Hidden Alpha Review useful as you try to make sense of it.

Before you leave

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