In a recent presentation on the Altimetry website, Joel Litman says we’re on the verge of the “complete disruption of a $12 trillion industry.”
And as it turns out, he was referring to the health care industry.
He also said that, with the help of his “Alpha Profit Code,” you could see gains of 250% to 1,000% in “less time than you think” by accessing his latest research and recommendations.
It’s a bold prediction, but Litman says hedge funds have paid him up to $100K per month to access his research. And that, for $49, you can join his advisory, Hidden Alpha, to benefit from the same kind of research he shares with eight of the top 10 money managers in the world.
Sounds good, but is it the real deal?
That’s a question I’ll strive to help answer in this post.
We’ll start by taking a closer look at what Litman is predicting. Then we’ll look at how his system works, who Joel Litman is, and whether or not it’s worth joining Hidden Alpha.
What Is Alpha Profit Code?
Joel Litman uses the term “Alpha Profit Code” to describe his system for finding opportunities in the stock market. He says he calls it this because the term “Alpha” has to do with beating the market, and his system has a long track record of identifying massive winners.
Here’s how he puts it:
Alpha is a term used in the investment world to describe a strategy’s ability to beat the market, or its “edge.”
More simply, it’s a way to systematically see returns that crush the market.
That’s why I call my system the “Alpha Profit Code.”
Because it has a long track record of identifying massive winners on a continual basis.
How does it work?
The way the Alpha Profit Code system works is grounded in Litman’s background as a forensic accountant. As a forensic accountant, he says he investigates a company’s operations in a similar manner to how a detective would look at a crime scene.
And that this helps him uncover things most people miss.
Instead of taking a company’s “reports, numbers, or press releases” at face value, Litman says he uses his skills to “prove there are discrepancies lingering below the surface.”
He also says he has identified “130 flaws and discrepancies” in how most American companies keep their books. And that, instead of relying on flawed data, he and his team screen over 25,000 stocks per week and “correct” these flaws to reveal the true picture.
From there, he says he takes another look to find the most undervalued or overvalued stocks based on these accounting flaws and that this is how he finds “hidden gems in the market.”
He doesn’t stop at the numbers, though. Litman says that once he’s narrowed his list down to between 30 to 200 stocks, he takes an even closer look at the company. For example, things like their operations, long-term strategies, and the industries critical to its growth.
And apparently, he even takes it a step further than this.
Interestingly, Litman says he uses an electro-audiogram (EAG) to analyze changes in the CEO’s voice during earnings calls. He likens this to a lie-detector test that helps him get a better idea as to whether the person speaking believes what they’re saying.
I used what’s called an electro-audiogram (EAG) to analyze quarterly earnings calls for changes in the CEO’s pitch and voice patterns.
It’s like putting every CEO through a sophisticated lie-detector test.
My system has nine different speech markers it uses to gauge whether the speaker believes what he’s saying.
If he’s hiding something, my system will catch it.
I’ve never heard of anyone using an EAG in this way (lol).
But I have to admit; I think it’s pretty cool. And it seems as though he actually does this. I found a video on the CNBC website from back in 2015 where he talks about it in more detail.
And according to Litman, he has used this method to help detect when a CEO is excited about something, not just when they’re lying. And says he’s used this to help him net large gains.
In any case, that’s the gist of how his “Alpha Profit Code” system works.
Essentially, Litman puts stocks through a rigorous, systematic vetting process to find the ones he believes are best and shares his top picks with members of Hidden Alpha.
And according to the presentation, after running 25,000 stocks through it recently, he uncovered a “massive trend that’s currently underway” in the health care industry. And he says there are five stocks with the potential to be “massive winners” if his prediction unfolds.
Let’s start by looking at his overall thesis and what he’s predicting, then we’ll go over the five “healthtech” stocks he’s bullish on and how you can learn more about them.
Profit From a $12 Trillion Health Care Trend?
Joel Litman’s core thesis, at least related to this presentation, is that the traditional healthcare industry will be disrupted by health-related technology (AKA “healthtech”).
Specifically healthtech as it relates to data.
In the presentation, Joel Litman talks about how Americans spend $10 billion per day on health care. And he suggests that this, along with modern medicine, is why we shouldn’t be surprised that the average life expectancy of Americans has increased from 48 to 79 years.
However, he also says that we’ve “just scratched the surface” of what’s possible and claims that what we’re about to see could change everything.
See, we’ve just scratched the surface of a brewing revolution that could make the extraordinary medical advances we’ve already accomplished look like child’s play.
From there, he points out that we could be about to see a major disruption to the $12 trillion health care industry. The presentation even likens it to the “death of traditional health care.”
Why is he so bullish on health care?
And what “disruption” is he talking about?
To explain his thesis, Litman talks about how the science behind modern medicine is good but says the system itself is flawed. And he uses numerous examples to illustrate this.
For example, he points out the extreme cost of receiving health care and everyday medications compared to other countries, the long wait times, and the overall lack of transparency.
He also shared some stats and examples to illustrate why he thinks the system is broken.
One example had to do with the extreme difference in prices of certain drugs between Australia and America, and the other was about a colleague of his.
Apparently, one of his colleagues ended up at the ER for shortness of breath and a fever, which turned out to be bronchitis. And instead of being a short stay, it became an eight-hour-long event which left his colleague with a bill for $4,500.
That doesn’t surprise me one bit, either.
In any case, to sum it up, Litman makes the case that the current system is a mess and that a “shift” is coming that he says could disrupt the entire health care industry. And says billions of dollars are flowing into health technology (or healthtech).
In fact, he says that within the next four years, healthtech is projected to be a $657 billion industry, more than triple what it was in 2020.
What exactly is “healthtech?”
According to an article on pitchbook.com:
It includes any technology-enabled healthcare product and service that can be delivered or consumed outside of a hospital or physician’s office—one notable exception being hospital and practice management software.
So healthtech is essentially just “technology related to health care.” And during the presentation, he cites numerous examples of healthtech and what it’s used for.
For instance, healthtech like smartwatches that help us sleep better, track our performance and monitor our heart rate, the artificial intelligence used in clinical trials for major illnesses, and tech that helps with things like diagnostics, measuring vitals, and detecting falls.
Litman then says that, despite how amazing these technological innovations are, as an investor, he’s more interested in the “driving force” behind these technologies – their data.
Without huge amounts of data, these devices either wouldn’t work at all, or they’d provide only minimal advantages.
But with data behind them, they become extremely powerful tools.
And it’s the companies that supply the data that stand to be the biggest winners out of this entire revolution.
He then points out that there are five specific stocks he’s bullish on and says these five stocks have the potential to be “massive winners thanks to the tsunami of cash that’s about to be unleashed.”
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What Are Joel Litman’s Five “Healthtech” Stocks?
Towards the end of the presentation, Joel Litman talks about five specific stocks he’s bullish on as part of his overall “healthtech” thesis. He gives the first one away for free, but the other four he details within four special reports you can only get by joining his service, Hidden Alpha.
The following is an overview of Joel Litman’s “Alpha Profit Code” stocks, based on what he says in the presentation:
- Stock 1: Litman’s first recommendation is a retail pharmacy company called CVS Health that he says is a longtime favorite of his. Despite its more than 10,000 store in the U.S., he says it’s positioning itself to be one of the “biggest health care data companies in the world” within the next few years.
- Stock 2: This company provides electronic medical records to more than three million health care providers and holds data on nearly 250 million patients worldwide. And according to Litman, it could double within the next six-to-twelve months.
- Stock 3: The third company on the list combines data that has already been collected and applies advanced analytics to help make services better for patients and increase profits for businesses. And Joel Litman says this stock could at least double in the coming months.
- Stock 4: The fourth pick has to do with personalized medicine. Specifically, a company that develops technology that allows specialists to taylor treatments and predict the health risks a patient might experience in future based on their DNA, through gene sequencing technology.
- Stock 5: The last company on the list collects health care related data and combines it with hospital care data to help improve patient care on a local and global level.
Other than the first stock (CVS Health), Litman doesn’t reveal his picks. So to find out what these companies are and the details behind why he’s recommending them, you need to read the four special reports he’s put together. Here are the names of the reports:
- The Data King’s Billion-Dollar Bet
- One Stock to Rule the $657 Billion Healthtech Industry
- The Future of Medicine and the End of Cancer
- The Great Hospital Shakeup
I usually analyze the recommendations on these types of presentations to try to figure out which companies are being teased. However, in this case, there weren’t many clues.
The fourth company he talked about somewhat reminded me of what Adam O’Dell was teasing in a presentation about “Imperium Machine.” In short, it’s about gene-sequencing technology, and in the article I just linked to, I break down the stock I think he’s teasing.
In any case, the company O’Dell is bullish on could easily be (and probably is) different from the one Litman’s teasing. So the best way to find out for sure is to check out the reports I just mentioned because that’s where you’ll get all the details on Litman’s stock picks.
The only catch is, to access those reports, you need to join Hidden Alpha.
What Is Hidden Alpha?
Hidden Alpha is an investment research service run by Joel Litman and published by Altimetry Research. The service aims to help subscribers profit from his “Alpha Profit Code” research, insights, and large-cap stock recommendations.
According to the Altimetry website, the idea behind the service is to find companies that are “more profitable and better run than what 99% of investors believe.”
And the method behind this is grounded in what we discussed earlier. In short, Litman and his team of more than 100 financial analysts and accountants analyze over 25,000 stocks and “rebuild” their financial statements – essentially “correcting” the 130 flaws they’ve identified.
There’s more to it than that, but that’s the general gist of how it works.
And the site says that, by understanding these discrepancies, it’s possible to see massive gains, even from large-cap, relatively “safe” stocks. Because it essentially allows you to see the truth about how publicly traded companies in the U.S. are operating.
And as a member, you get to benefit from this research, primarily through the monthly newsletters that contain Litman’s latest research and stock picks.
But also through other resources, like the special reports I mentioned earlier, a getting started guide called “The Alpha Profit Code Quick-Start Guide,” and weekly updates.
How much does it cost?
Hidden Alpha typically costs $199 per year, but if you join through the “Alpha Profit Code” presentation, it only costs $49 for a full 12 months.
And according to the website, it comes with a 60-day money-back guarantee.
Who’s Joel Litman?
Joel Litman is the man behind the Alpha Profit Code presentation, heads up the Hidden Alpha service, and is the Chief Investment Strategist for Altimetry.
He’s also the CEO of Valens Research, a professional research firm that provides individual investors, companies, and institutions with high-quality finance-related research.
As mentioned earlier, Litman’s background is in forensic accounting, which is a unique skillset and, as you can imagine, requires a keen eye for detail.
This is a big part of why he’s such a successful investor, too. Litman seems to approach things in a more data-driven, analytical manner. And from what I can tell, he looks beyond what most gurus in the space do when evaluating a company.
He also runs a research firm that employs over 100 people and works with private clients and institutional investors.
Of course, this doesn’t guarantee that Litman’s recommendations will make you money. And there are risks involved with investing, no matter who you follow. However, based on everything I’ve seen, he is the real deal, and his research is well-regarded.
Aside from sharing his insights with subscribers of his advisory services and private clients, Litman says he’s shared his investment strategies at universities like Harvard and Wharton, with law enforcement agencies, and government departments.
Not to mention, according to his profile on the Altimetry website, he’s a Professor at Hult International Business School, holds numerous qualifications related to finance and accounting, and his insights have been featured on Barron’s, Forbes, and Seeking Alpha (among others).
The Alpha Profit Code presentation centers around Joel Litman’s latest prediction about the health care industry. Specifically, it’s about “healthtech,” and the five companies he says could make investors triple-digit gains in the coming months.
To find out what stocks he’s recommending, you need to read the four investment reports he created that break down each of his stock picks in detail. And to access those, you need to join his advisory service, Hidden Alpha, for $49.
Is Hidden Alpha worth it?
Whether or not Hidden Alpha is worth joining ultimately depends on you.
On the one hand, Hidden Alpha is a legitimate service run by a genuine expert, and it’s backed by a respected company with a team of financial analysts and accountants.
Litman says he and his team analyze over 25,000 stocks per week and narrow down the list by understanding their financial statements’ “flaws and discrepancies.” From there, they dig deeper to find the best potential stocks and share these with subscribers.
So it could be worth checking out if you’re looking to find large-cap stocks with good upside potential. Not to mention, if you want to learn from Litman, to see how he finds these opportunities and use that knowledge to become a better investor in your own right.
That said, there are always risks involved when it comes to investing. Even though you could make money by following Litman’s recommendations, there are no guarantees. So I wouldn’t join expecting to make lots of money in a short period of time.
In any case, I appreciate you stopping by and hope you found this helpful.
3 thoughts on “Alpha Profit Code Review: Is Hidden Alpha Worth It?”
Thank you very much for your education, again, Mr. Mckinlay!
Shall look into the last point. You are right. We have publications in our own backyard, Baltimore, MD and Jax, FL which claim to have physical addresses and still ripoff customers. If Litman’s responds, I’ll share.
BTW, do you know of a pre-IPO investment course/advisory “early stage playbook’ by crowdability? It sounded believable but also has detractors. I focus in Biotech startup space, hence my interest.
Good morning Mr. Tim McKinlay.
Impressive & educational article. Shall visit your “#1 stock advisory” & “4 steps” links.
My major concerns are: 1. Valens homesite’s alexa rank is an abyssmal1.25M. 2. A ’30’ (of 100)Trust factor. 3. NO paypal, only credit cards (many like these, esp from MD, FL and overseas use this access and defraud $100s-$1000s from customers). 4. NO physical address – this is big. How do we know that thisn’t a sweat-shop cubicle in India or worse the caymans.
I have emailed them for Mr. Litman’s last 2 yrs trade performance. Let us see.
Thank you, Mr. Ranganathan.
I appreciate your comment and it’s nice to see someone doing such extensive due diligence before joining.
My thoughts on your findings…
1) Alexa rank means very little, especially when it comes to determining the legitimacy of a company. So this is not something I would look at myself. If you’re looking to use to gauge traffic a site gets, there are much better tools (SEMrush, ahrefs for example and there are free tools you can use too).
2) Not sure what the “Trust Factor” is you’re referring to, but how relevant that is would depend on how it’s calculated and how legitimate the site providing the score is. Some of these so-called “trust verifying” sites exist to take advantage of popular companies/people. Not all, but some. What they want is for people with “bad scores” to pay them to improve their trust score or otherwise improve their “rating.” There’s a whole business model around this sort of thing.
3) I do feel better about buying from companies with PayPal and I use it myself. However, at the same time, there are many legitimate businesses that don’t use PayPal. So it’s not exactly enough to stop me from buying in and of itself.
4) Based on this page (valens-research.com/contact-us) Valens Research, the company that owns Altimetry, has offices in Cambridge, Chicago, Hong Kong, and the Philippines. I’m not 100% sure but it looks like these are physical addresses and not virtual offices. But I am not certain about this.
The main thing that would concern me is the fourth one. Because Altimetry/Valens apparently has over 100 employees. So unless they all work from home, the company should have a physical office. Based on my research, it looks like they do.
Anyway, thanks for commenting, appreciate the points you’ve made here.