Best Alternative Data Providers For Stock Market Investors

This guide compares the 7 best alternative data providers for stock market investors in 2023. We cover a range of alternative sources, including credit card transactions, flight data, social sentiment metrics, and geo-location tracking.

Pros

• Best alternative data for retail investors – prices range from $0 to $99 per month
• Specializes in social sentiment – discover broader consumer insights
• Tracks thousands of stocks and a selection of cryptocurrencies
• Streamline the research process through real-time alerts
• AI-backed stock recommendations with a 75% win rate
  
• Also offers one of the best free stock screeners

Cons

• Stocks outside of the US are not tracked
  

Next up is Plaid , which specializes in credit card transactional data. This is a solid alternative data source, as it enables stock investors to assess broader consumer trends, not to mention spending habits across key markets. For example, suppose credit card data shows discretionary spending has been on a steady decline for five consecutive weeks.

This means that consumers are tightening their belts and spending less on what they don't actually need. In this context, the investor might consider offloading stocks in relevant industries, such as retail, travel, hospitality, and tech. Conversely, they might increase their exposure to consumer staples, such as pharmaceuticals and utilities.

In terms of data sources, Plaid has formed partnerships with over 20,000 financial institutions, including banks, credit cards, and personal finance apps. This is a significant amount of alternative data to be privy to, which is why Plaid is one of the best alternative providers for investors.

Moreover, Plaid allows investors to niche down into local markets, separate transactions by the spending category, and see the size and date of each purchase. We also like that Plaid covers multiple international markets, including the US, Canada, the UK, and the European Union. Prices are curated on a custom basis, depending on the investor's needs.

Pros

• Leading alternative data source for credit card transactions
• Assess consumer spending habits and broader sentiment
  
• Niche down to local markets to see how specific industries are performing
• Covers millions of consumers in the US, Canada, the UK, and the European Union
  

Cons

• Just 100 transactions are available in the free plan

Foursquare is another leading alternative data provider that has access to unprecedented data streams. It specializes in geo-location tracking, through partnerships with the world's leading smartphone devices, apps, and social networks. It tracks user locations in real-time via Bluetooth, WiFi, GPS, and/or 5g signals.

In fact, more than 500 million devices are tracked in over 200 countries. As a stock investor, knowing where consumers are congregating is crucial. It can reveal key insights and trends about where people are spending their money. For example, if a particular fast food chain is witnessing increasing traffic in multiple markets, this is a very good sign.

Or, if consumers are increasing the amount of time they spend in certain establishments, such as vegan eateries or budget restaurants. Foursquare doubles up as a review platform too, allowing consumers to rate their experiences at millions of hospitality outlets. This alternative data source can be analyzed alongside geo-location tracking to paint a clearer picture.

Importantly, although Foursquare tracks millions of consumers around the world, it complies with all laws on data privacy. No personal information is revealed to users, as data is aggregated into larger batches. The main drawback is that investors need to have experience in managing large data sets. After all, you'll need to sort and filter through billions of data points.

Pros

• Specializes in geo-location tracking via Bluetooth, GPS, WiFi, and/or 5g signals
• Tracks over 500 million devices globally
  
• 15 billion check-ins have been extracted over a 14-year period
• Ideal for discovering broader insights into food and beverage trends
  

Cons

• Full functionality can be very expensive
  

FlightAware is also a solid addition to this list of the best alternative data providers. This is the go-to provider for high-level data on the broader aviation industry. At its core, FlightAware tracks thousands of daily flights, offering insights on departure and arrival times, not to mention fuel and route efficiencies.

As a stock investor, FlightAware can be used to assess key performance metrics of publicly-listed airline companies. For instance, consider an airline that is always on time, has little to no cancellations, and is frequently adding new routes. This highlights that the airline stock is operating effectively, which could be an early signal for solid quarterly earnings.

In contrast, airlines with above-average cancellations, delays, and inefficient flight routes could indicate the opposite. FlightAware can also provide early insights into the wider hospitality and travel industries, in terms of passenger and flight numbers. What's more, FlightAware is useful for assessing supply chain metrics, as it tracks cargo flights around the clock.

Pros

• Tracks 100% of global flights around the clock – including commercial, private, and cargo planes
  
• Discover trends in the aviation industry before the wider markets
• Explore how individual airlines are performing against their competitors
  
• Competitive pricing of $149.95 per month offers great value

Cons

• Very data intensive – you'll need tools to analyze and sort discoveries
  

StockTrot is an alternative data provider that specializes in Form 4 filings made to the SEC. These notify the SEC when an insider transaction has taken place on a publicly listed stock. In other words, whenever company insiders buy or sell their own shares, they must notify the SEC within two business days .

This is one of the best ways to assess how the company is performing long before it reports its quarterly earnings. This is especially the case with small-to-medium cap stocks, where information sources aren't quite as frequent. For example, consider a company director that invests $500,000 into their own stock.

They wouldn't invest such a considerable amount if the long-term business outlook wasn't positive. Crucially, they've got 'skin in the game'. StockTrot sends insider transaction alerts within minutes of the Form 4 filing reaching the SEC. Users can choose which companies they want to track. Prices are very competitive, costing $12.99 per month or $99 annually.

Pros

• Receive an alert within minutes of a Form 4 filing being made to the SEC
• Discover whether company insiders or buying or selling their own shares
• All US-listed stocks are tracked
• Very competitive pricing of just $12.99 per month or $99 when paying annually
  

Cons

• You'll need to choose which companies to track – otherwise, you'll be receiving too many alerts

Another invaluable alternative data source is internet traffic, and Similarweb is the market leader in this regard. Similarweb uses a four-stage process to provide real-time insights; data collection, data synthesis, data modeling, and traffic intelligence. It collects more than 10 billion website signals daily, translating to over two terabytes of data.

Not only does this include websites but also app data. Seasoned investors will use this data to analyze stocks that are reliant on website visits. Think along the lines of online brokers, e-commerce marketplaces, and retailers. For example, consider online-only brokers like Robinhood and Ally Financial.

These platforms do not have physical locations, meaning they are 100% reliant on website traffic. Without visitors actively trading, they're unable to generate commissions. This is just one example, but there are many other ways that website traffic can be analyzed to discover stock insights. For full functionality, Similarweb charges $399 per month.

Pros

• Market leader in website and app analytics
  
• Tracks more than 10 billion signals every day
• Ideal for discovering early insights on online-only companies
  
• More than a decade's worth of historical trends
  

Cons

• Full functionality costs $399 per month or $3,996 when paying annually
  

Last up is Advan Research , which offers alternative data streams for real estate investors. This provider is ideal for discovering property trends throughout the US. It tracks data from more than 150 million properties and 5,000 commercial building chains. Not only that, but Advan Research also tracks foot traffic data.

This helps real estate investors understand local trends, such as population shifts, migration patterns, and traffic flows. These are important metrics that can help property investors choose the best locations for their capital. For example, a previous client notes that they were about to purchase a residential unit near an industrial complex.

However, Advan Research advised them that nobody working at the complex lives in the area. This saved the client from making a costly mistake, as they would have struggled to find tenants. Advan Research doesn't have a price list per se, as it offers custom solutions based on the client's needs. Therefore, you'll need to contact Advan Research for a quote.

Pros

• Established alternative data provider for real estate investors
• Tracks data from 150 million properties and 5,000 retailer chains
  
• Discover local housing trends and migration patterns
• Collects over 300 billion data points every month via foot traffic insights
  

Cons

• Does not provide any information on pricing
  

Alternative data is information collected from non-traditional sources. In the investment scene, this would refer to data outside of the fundamental and technical landscapes. This means making stock trading decisions based on unconventional data streams. In doing so, you'll be part of a very exclusive club.

After all, one of the main benefits of alternative data is the time advantage. You'll be privy to insights and trends long before the wider markets, who are otherwise relying on earnings reports or pricing charts. A basic example of alternative data is social sentiment analysis.

Providers like AltIndex collect and analyze data from social media websites like X, Facebook, Instagram, TikTok, and Reddit. These platforms are visited billions of times each month, translating to unparalleled insights. AltIndex leverages AI to assess whether consumer sentiment on stocks, industries, and sectors is positive or negative.

Let's explore some of the main advantages of using alternative data when making stock trading decisions.

The stock market is often about timing. The best alternative data providers give you an edge in the market, as you're not relying on the same information as the broader market.

Consider this example.

• A stock listed on the NYSE releases its quarterly earnings report.
  
• It far exceeded Wall Street expectations across most metrics, including revenue, margins, operating income, and earnings-per-share.
  
• The likelihood is that the stock will immediately increase, as investors react quickly to positive quarterly earnings.
  
• There is no time advantage, however, as the earnings are released publicly.
  

Now consider an alternative data platform like AltIndex. Suppose AltIndex alerts you that Ally Financial is witnessing a continued increase in website visits and app downloads. Moreover, visitors are spending more time on Ally Financial, and broader social sentiment is positive.

This could mean that Ally Financial is in a strong market position and that the next quarterly earnings report will outperform expectations. As an AltIndex user, you know about this long before the wider markets. Therefore, you could buy Ally Financial stock to capitalize on this.

Alternative data streams are ideal for discovering broader industry and sector trends. For example, suppose you're interested in retail stocks. You'd want to know how consumers feel about the health of the economy. After all, discretionary spending increases when sentiment is strong.

This is where an alternative provider like Plaid comes in. It tracks credit card transactions from millions of global consumers. You can analyze the data to assess where consumers are spending their money, and how this compares to previous periods.

Similarly, FlightAware helps investors discover insights into the aviation industry. It tracks 100% of global flights, offering unparalleled performance metrics. For instance, suppose there is a growing trend in new flight routes being added. This highlights that global passenger numbers are increasing, as airlines need to add more routes to facilitate demand.

Suppose you're currently holding Samsung stock. Its primary revenue source is smartphones, so you'd want to know how its latest model is viewed by consumers. An alternative data provider like AltIndex is ideal here, as it can evaluate consumer sentiment across social media.

It achieves this by analyzing likes, shares, and comments – specifically related to Samsung's new smartphone launch. AltIndex discovers that sentiment is increasingly negative, in terms of performance, camera quality, and price. Therefore, you might decide to sell your Samsung stock position before the news becomes mainstream.

Let's explore how we ranked the best alternative data providers for this comparison guide. This will help you choose a suitable provider for your own investment needs.

You'll first need to assess what type of alternative data you seek. This should align with your investment goals and your preferred markets. For instance, if you're thinking about investing in airline or hospitality stocks,
FlightAware is a good starting point.

You'll get a heads-up on any potential market shifts, such as an increase or decrease in passenger numbers. You can also niche down into specific airlines to understand their performance. For example, if an airline is repeatedly canceling key routes, this could be a sign of operational issues.

If you're looking to invest in consumer-focused stocks, such as technology companies or retail, then AltIndex is the best option. You'll have access to near-real-time insights on consumer sentiment and public opinion across thousands of stocks. Crucially, you'll want to avoid stocks that have a negative outlook from the broader market.

We've established that alternative data gives investors a time advantage over the wider markets. In contrast, regular data sources – such as financial news and earnings reports, are accessible to everyone at the same time.

That said, it's important to assess how much of an edge you have when choosing an alternative data provider. For instance, StockTrot sends alerts when a company makes a Form 4 filing with the SEC. This means an insider transaction has taken place within the prior two business days.

As soon as the filing is made, StockTrot users receive an alert within minutes. This is a solid time advantage, especially if it relates to a small-cap company that doesn't get much exposure from the mainstream financial media.

This metric is more challenging to assess, especially if you have limited experience with alternative data streams. Crucially, you'll need to feel confident that the data being delivered is reliable and accurate. If it isn't, then you're making stock investments based on invalid information.

We found that the best alternative data providers have a section on their websites dedicated to data accuracy. They also explain how the data is sourced and how it complies with data privacy laws .

For example, Similarweb offers a fully-fledged methodology for its data collection and analysis processes. This showcases that its data is reliable, as it's transparent on how it is obtained.

If the provider collects data from European Union citizens, it must comply with the General Data Protection Regulation (GDPR) . The US equivalent of the GDPR is the California Consumer Privacy Act (CCPA) .

Both pieces of legislation are taken very seriously by state and federal governments. Not only does this mean that users should be aware that their data is being tracked, but they must agree to it.

Alternative data stream fees will vary widely depending on the provider, the type of data, and how much of an edge it provides. Just remember, there is increasing demand from hedge funds for reliable alternative data. In fact, according to a Research & Markets report, spending on alternative data streams is expected to hit $18.94 billion by 2027.

This translates to a compound annual growth rate of 46.7%. Therefore, some of the best alternative data sets are aimed exclusively at financial institutions with vast budgets. All that being said, alternative data providers have also seen growing interest from the retail client space. This means that alternative data is becoming more affordable.

For example, AltIndex's most premium plan costs just $99. Not only does this offer unlimited access to its social sentiment findings, but AI-backed stock recommendations, alerts, and portfolio management tools. Similarly, FlightAware is also competitive, charging just $149.95 per month for its most expensive package.

StockTrot – which offers near-instant alerts on Form 4 filings, charges just $12.99 per month or $99 annually. These fees are very competitive if you're using alternative data to make informed stock trading decisions. A single trade could cover all your monthly fees, as is the power of alternative data.

However, if you're a casual trader who typically buys and sells stocks in small fractions, alternative data might not be financially viable. After all, even if you're profitable, you might not make enough money to cover your alternative data subscriptions.

Alternative data is one of the most valuable information sources when making stock trading decisions. You'll have access to insights that aren't common knowledge, giving you a solid advantage over the broader markets.

One of the best alternative data providers for retail investors is AltIndex. Specializing in social sentiment analysis, you'll discover whether consumers view stocks positively or negatively. What's more, the data is analyzed by AI, ensuring that it's streamlined.

Alternative data providers extract and analyze data from unconventional sources. In the investment landscape, this can include social sentiment analysis, credit card transactions, satellite imagery, and geo-location tracking.

Yes, there is increasing demand for alternative data streams on Wall Street. According to a Research & Markets report, annual spending on alternative data will surpass $18.9 billion by 2027.

Social sentiment analysis is very popular with investors, as it highlights how consumers feel about specific companies. Credit card transactions are also useful, as they provide trends on consumer spending habits.

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