10 Best Alternative Data Providers & Sources for 2024

Looking to source some high-level alternative data to get an edge in the market? In this guide, we compare the 10 best alternative data providers for 2024.

We cover a wide range of alternative data methods, including satellite imagery, social sentiment, geo-location tracking, and much more.

Best Alternative Data Sources Reviewed

The 10 alternative data providers listed above specialize in a range of fields. This covers everything from patent and SEC filings to geo-location data, credit card transactions, and social media metrics.

Read on to discover the best places to obtain alternative data in finance.

1. AltIndex – Best Alternative Data Platform for Beginners?

While most alternative data providers charge high fees, Altindex offers a free plan. This makes AltIndex one of the best options for beginners. AltIndex supplies alternative data sets for stock and crypto investors making it one of the best AI stock picking services on the market in 2024. It covers thousands of data points, enabling investors to make smart, informed decisions. For example, once a stock has been selected, investors are presented with a range of social metrics.

This includes website traffic trends, in terms of daily visitors. AltIndex also provides information on Google search trends. This can be used in assessing the current sentiment of a stock or cryptocurrencies. We also like that AltIndex provides alternative data from social media accounts. For example, investors can find trending assets based on followers, likes, and community engagement.

This is in addition to ‘mentions’ on social media sites, including Reddit and Facebook. For instance, AltIndex informs us that Tesla has seen a 124% increase in Reddit mentions in the prior 24 hours. It conveniently lists other automobile stocks, such as General Motors (66%) and Ford (150%). This enables investors to make industry-by-industry comparisons with ease.

We also like the ‘job postings’ feature offered by AltIndex. This provides insights and trends into which companies are hiring – often a sign of strong financial performance. Based on our AltIndex review we found that it also provides information on new and existing patents. This can be a great way to find companies that have recently developed an innovative product.

While the sheer amount of alternative data provided by AltIndex can be overwhelming, everything is broken down in a digestible format.?For instance, users can click on their preferred metric and view which assets are trending. Alternatively, AltIndex also offers summarized ranking scores for all of its supported assets. This is backed by AI and is based on all of its real-time data sets. Although AltIndex is free to use, there are limitations.

For example, the free plan comes with 20 daily visits and enables users to add two assets to their portfolio. It also comes with two stock alerts. The starter plan, at $29 per month, offers unlimited dashboard access, and up to 10 stock alerts. This is increased to 50 stock alerts when signing up for the pro plan at $99 per month. For unlimited access – including API fees, an enterprise plan is needed. Users will need to contact AltIndex for pricing.

2. Foursquare – Geo-Location Tracking on Over 50 Million Consumers?

Foursquare specializes in an alternative data method known as ‘geo-location tracking’. In a nutshell, the platform monitors foot-track in real-time via WiFi and BlueTooth signals. FourSquare is used by over 50 million consumers from more than 200 countries globally. It provides users with suggestions on where to eat, drink, and shop. By connecting to the Foursquare API, investors can obtain invaluable insights on consumer habits.

For example, Foursquare is useful for investors in the retail and hospitality industries. It allows investors to assess how many people are visiting specific establishments and for how long. Foursquare also provides reviews and ratings for each location, supplied by users of its app. Investors can evaluate which companies are worth keeping an eye on.

For instance, suppose a restaurant chain consistently scores high traffic and positive reviews around the world. This could highlight that the chain is about to report overly positive figures in its upcoming quarterly report. Moreover, Foursquare is ideal for identifying broader consumer trends. If more people are going out to eat and shop, this illustrates that consumers have a positive sentiment on the economy.

Foursquare can also be used by REITs (Real Estate Investment Trusts) to evaluate potential investments. For example, a REIT might be interested in a new residential complex location near a shopping mall. The REIT can use Foursquare to assess foot traffic and consumer spending habits to assess the complex’s potential. When it comes to fees, Foursquare doesn’t offer a free plan – but pricing is customized to the user’s requirements.

3. FlightAware – Gain Insights Into Aviation and Supply Chain Trends?

While FlightAware is popular with aviation fanatics, it’s also one of the best alternative data providers for investors. Put simply, FlightAware offers real-time tracking on global flights – including commercial and private jets. This enables investors to gain insights into broader industry trends. For example, when flight numbers increase, this signals that the travel industry is doing well. This will bode well for investors with exposure to aviation and travel stocks.

Moreover, FlightAware allows investors to make informed decisions when buying or selling airline stocks. For instance, consider an airline that is consistently behind schedule or prone to cancellations. This could highlight operational issues within the company and a red flag for further troubles ahead. But if an airline is always on time or it is regularly adding new destinations to its schedule, this is a bullish indicator.

FlightAware also offers alternative data on supply chain analysis. This is because FlightAware also tracks cargo flights. If a cargo flight carrying key shipments is delayed or canceled, FlightAware users are notified in real-time. Not only that, but FlightAware offers indicators on potential conflicts and no-fly zones before the mainstream media reports it. This can occur if planes are flying outside of their usual route to avoid a potential red zone.

We also found that FlightAware is used for private jet tracking. This can be useful in tracking the movements of blue-chip CEOs. In terms of pricing, FlightAware offers a free plan that comes with basic functionality. But investors looking for the most advanced and up-to-date insights will need to consider the Enterprise WX plan at $149.95 per month. This not only includes flight tracking but also real-time weather updates.

4. MetDesk – High-Level Weather Insights for the Commodity and Supply Chain Industries??

MetDesk is one of the best alternative data platforms for accessing reliable, accurate, and up-to-date weather forecasts. This alternative data method is hugely beneficial for commodity traders. For example, consider a commodity trader that specializes in corn futures. By using MetDesk, the trader can evaluate local weather conditions in major corn-producing regions. If MetDesk data suggests that severe storms or droughts are likely, this could negatively impact the corn region’s supply capabilities.

MetDesk is also used by investors in the renewable energy space. For instance, it provides indicators that can impact solar efficiency, such as irradiance forecasting. MetDesk is also useful for analyzing supply chain movements. For instance, suppose a MetDesk signal shows that extremely dangerous sea conditions are forecast in a key oil transportation route.

While this could lead to supply chain interruptions, MetDesk gives investors plenty of time to trade the signal. MetDesk also enables investors to analyze other transportation services, such as aviation, railways, and highways. Crucially, users can set their own parameters on MetDesk, ensuring that only relevant alerts are received. MetDesk does not display its pricing structure on its website. Those interested in its alternative data sets will need to contact MetDesk for a custom quote.

5. Plaid – Credit Card Transaction Data From Over 20,000 Banks and Finance Apps??

Plaid provides investors with an invaluable data set – credit card transactions from consumers in the US, Canada, the UK, and Europe. The platform has partnered with over 12,000 banks and 8,000 financial apps. This provides investors with a significant amount of alternative data, enabling them to evaluate broader consumer spending habits. Each credit card transaction displays the size of the purchase and the relevant category.

Plaid also provides the date and location of the transaction. Considering that millions of transactions are posted each and every day, Plaid allows users to set up their own filters and parameters. For instance, an investor with exposure to media streaming platforms might want alternative data on subscription payments. This provides early insights into whether stocks like Netflix and Spotify are seeing an increase or decrease in subscriber numbers.

Plaid is also useful for assessing consumer sentiment in specific countries and regions. For instance, an investor with exposure to retail and technology stocks might seek alternative data on discretionary spending. This refers to non-essential purchases. If discretionary spending is on the rise, this is good news for stocks in the retail and technology spaces.

We also like that Plaid allows investors to set up custom alerts. For example, an investor with exposure to a health and fitness ETF might want to receive daily alerts on gym subscription numbers. This enables the investor to keep tabs on broader industry trends. We found that Plaid offers a free plan that allows up to 100 transactions. But this won’t be enough to gain an edge in the market. For full functionality,? users will need to choose a custom monthly plan or simply pay for the alternative data they need.

6. Descartes Labs – Satellite Imagery Data With Expert Insights and Analysis?

Investors with exposure to commodities might consider Descartes Labs one of the best alternative data providers. It offers commodity traders an invaluable source of information – real-time satellite imagery. This provides insights into a range of metrics, such as production levels, yield quality, and supply chain movements.? This is because Descartes Labs has satellite positions on major production and supply facilities.

For example, suppose Descartes Labs offers satellite imagery on a Russian natural gas facility. The image shows that a significant repair operation is ongoing, highlighting potential issues with production levels. This would enable the investor to forecast the supply chain interruption in their prediction model.

In another example, Descartes Labs can be used to evaluate the impact of a major natural disaster. For instance, after a severe storm in a crucial wheat-producing region.? Once again, this alternative data gives the investor real-time insights into supply chain forecasts. While the data will eventually be reported by the mainstream media, Descartes Labs provides commodity investors with a first-mover advantage.

Another benefit of using Descartes Labs is that it provides clients with daily research reports and trade strategies. The analysis provided is based on its satellite imagery and expertise in interpreting the data. The main drawback of Descartes Labs is that it is aimed at institutional investors and hedge funds. While prices are not displayed on its website, Descartes Labs will likely require a significant upfront investment.

7. SimilarWeb – Real-Time Website Analytics and Trends for Online-Only Companies

SimilarWeb is one of the best alternative data providers for evaluating online-only businesses. For instance, e-commerce marketplaces like Amazon and eBay, or retail stock brokers such as Robinhood and SoFi. The reason for this is that SimilarWeb provides real-time insights into website analytics and trends. For example, suppose an investor is currently holding eBay stock.

eBay’s primary revenue model is based on marketplace sales, where it takes a commission from sellers. Through SimilarWeb data, the investor finds that the number of people visiting eBay has been on a declining trend for several weeks. This isn’t good news for the value of eBay stock – especially once the company reports its quarterly earnings.

With this in mind, the investor might decide to sell their eBay stock holding before its poor performance is announced. SimilarWeb can also be used to get insights into wider industry trends. For example, websites can be ranked by the number of website visits in terms of percentage growth. If an increasing number of video streaming sites are trending upward, this could highlight positive growth for the industry.

SimilarWeb is also useful for identifying consumer sentiment on specific asset classes, such as cryptocurrencies. If the number of people visiting crypto exchanges is rising, this could signal increased interest from investors. SimilarWeb offers a free plan with limited access. Paid plans offer more features and increased search results, and start from $149 per month. SimilarWeb also offers a 7-day free trial on its premium plans.

8. PatentAlert – Stay Informed on New Patent Filings With Real-Time Alerts

PatentAlert is one of the best alternative data providers for staying updated with new patent filings. The platform offers real-time notifications when patents are filed with the United States Patent and Trademark Office. This can be useful for investors in many different sectors. For example, technology companies regularly file patents when they have created an innovative product.

This ensures that the concept can only be used by the respective company.? Similarly, patents are also filed by pharmaceutical companies when they discover a new drug or treatment. This gives investors a first-mover advantage, especially if the treatment is of significance.

PatentAlert uses an email subscription system that comes with a free plan. This offers up to 40 patent alert updates, but users cannot select the industries or markets they are interested in. For full functionality, consider upgrading to the expert service. This costs just $5 per month and enables investors to choose which alerts they receive. This can be done on an industry-by-industry basis, as well as from research centers and individual stocks.

Each alert receives a direct link to the United States Patent and Trademark Office. The main drawback of PatentAlert is that investors need to be well-versed in how to interpret patent filings. Patent filings often consist of dozens of pages of legal jargon, not to mention industry-specific terms and concepts. Nonetheless, notable patents can yield impressive returns – especially when filed by a small-cap company.

9. Advan – WiFi, Bluetooth, and GPS Tracking for Real Estate Insights?

Advan is an established alternative data provider that specializes in geo-location insights. It tracks data from millions of Americans, largely via WiFi, Bluetooth, and GPS signals. To ensure data integrity, Advan has also partnered with 1,000 mobile apps, which provide more than 300 billion monthly data points. Advan is commonly used by real estate investors that seek up-to-date insights on local property markets.

For instance, Advan provides a range of useful metrics, including foot traffic, migration patterns, and population growth. It also covers employment data, including work-from-home trends. Advan packages all of these metrics together to give an ‘investment score’.?This enables investors to assess the viability of a commercial real investment, such as office blocks, health facilities, or shopping complexes.

Most importantly, Advan claims to offer a two-year advantage over census data. It also claims a historical accuracy rate of 98%, when compared to census figures. We also like that Advan protects user privacy, as it never reveals the identity of the people it tracks. It is also compliant with major privacy regulations, such as the GDPR and CCPA in Europe and the US, respectively.

10. SECFilings.com – Set Up Real-Time Alerts on New SEC Filings

SECFilings.com is also one of the best alternative data providers for stock investors. Put simply, the platform offers a simple yet effective way to stay updated with key regulatory filings. There are many reasons why a US-based company might need to file regulatory papers to the SEC. This includes everything from executive compensation, quarterly earnings, and insider transactions to director changes and initial public offering (IPO) applications.

Crucially, with the exception of earnings calls – which are given to investors in real-time via audio, SEC filings will almost always beat mainstream media reports. For example, an SEC filing is required for ‘material events’. This includes a new acquisition or merger, which can have a major impact on the value of the respective stock.

A filing also needs to be made when a new debt offering is made. For example, if the company issues bonds – the SEC filing will detail key terms, such as interest rates.?This information gives investors a huge advantage over the broader markets, which might rely on financial news and other traditional media. That said, the SEC handles approximately 3,000 new filings each day.

As such, this is an unprecedented amount of data for an investor to sift through. With this in mind, SECFilings.com enables users to select which companies or industries they want to receive alerts on. This enables investors to focus on the specific markets.

Alternative Data Examples

Let’s explore some examples of alternative data sets and how they can be used by investors.

Airline and Travel Industry Insights

Alternative data provides invaluable insights for investors involved in the airline and travel industries.

• For example, suppose an investor uses FlightAware to get real-time data on flight departures and arrivals over the prior month.
• After aggregating the data, the investor finds that a US-based budget airline is potentially running into operational challenges.
• This is because when compared to the industry average, the airline has canceled a significant number of flights.
• This is in addition to increased delays on key US routes.?The investor decides to short-sell the airline stock.

A few weeks later, the airline revealed in its quarterly report that it is facing major staff shortages, which has resulted in increased delays and cancellations. On receipt of the news, the airline stock declined by 15% in one day.

This example shows that alternative data provides valuable insights that would otherwise not be made public until the company’s earnings report.

Demand Insights for Gold Traders

Alternative data sources are also ideal for precious metal traders, especially those involved in gold.

For example:

• An investor obtains satellite imagery that shows a major gold mine is decreasing its scope in the region
• This highlights that the gold mine is potentially running dry
• Due to the size of the gold mine, the investor believes that this will have a positive impact on its global price
• The investor decides to purchase call options on gold, to profit from a potential price increase

A few days later, a mainstream news outlet reports that the mine has completely seized operations in the region. The price of gold increases and the investor closes their options trade at a profit.

Social Media Metrics

Social media metrics and trends also provide valuable alternative data to investors.

For example:

An investor uses AltIndex to find top trending cryptocurrencies. AltIndex data shows that XRP is not only trending on social media but Google too. For instance, over the prior 24 hours, ‘XRP’ searches on Google have increased by 880%.

Data also shows that ‘mentions’ on Reddit and Twitter are trending upward, as is the number of news stories discussing XRP. The investor decides to buy XRP in anticipation of a bull run.

AltIndex also offers social metrics on thousands of stocks. In addition to social media followers, mentions, and engagement levels, it also provides alternative data on overall brand sentiment.

Consumer Spending Habits

Alternative data is also used to evaluate consumer spending habits.

For example:

• ?An investor uses Plaid for extra credit card transactions from over 12,000 US banks and financial institutions
• The data shows that over the prior month, spending on discretionary products and services is on a prolonged decline
• This could highlight that consumer sentiment on the economy is weakening, meaning people are reducing their non-essential spending

In light of this, the investor decides to short-sell stocks involved in the travel and retail industries. These are two industries that suffer badly when discretionary spending is down.

Real Estate Insights

Real estate investors will use alternative data sets for enhanced insights.

For example:

• An investor uses Advan to extract alternative data on population growth and income bands
• They find that a specific housing market in the South West is witnessing high growth rates and increased average salaries
• This makes the housing market ideal for real investors, in terms of appreciation and rental yields

Crucially, the data provided by Advan is two years ahead of the official census. This gives investors a huge time advantage before the market catches up.

Benefits of Alternative Data

The best alternative data platforms provide the following benefits to investors:

• Timely Insights: Alternative data provides a time advantage for investors. This could be anything from a few minutes to several weeks. This gives investors an edge over the broader markets, as they can enter trades before relevant news is reported.
• Risk Warnings: Alternative data offers one of the best risk-management strategies. After all, why wait for financial news outlets to report a potential issue? For instance, satellite imagery of an oil rig explosion will likely notify investors before traditional media outlets.
• Trading Opportunities: Alternative data sources can also highlight new trading opportunities before the market catches on. For instance, suppose a pharmaceutical company files a new patent for a revolutionary drug. The trader is notified instantly via a patent alert service. They can then buy stock in the pharmaceutical company before the news is reported by the traditional media.
• Independent Analysis: Retail investors have a habit of buying and selling assets based on other people’s advice – whether that’s financial news websites or media influencers. Alternative data sources promote independent thinking, enabling investors to make smart, informed decisions.

How to Pick an Alternative Data Provider?

Investors who are still unsure which alternative data platform is best can refer to the checklist below:

• Privacy Compliance: Investors should ensure the alternative data platform is compliant with privacy regulations – especially the GDPR and CCPA. This is especially the case with geo-trackers that use real-time mobile signals.
• Pricing: Some alternative data providers offer competitive pricing. AltIndex, for instance, offers a free plan. Those needing additional data can sign up for the starter plan at just $29 per month. However, many alternative data providers do not have a set pricing plan, as they are tailored to financial institutions. This often translates into hundreds of thousands of dollars per year.
• ROI: Investors should also consider their projected return on investment (ROI) when using alternative data. The cost of obtaining the data should be a fraction of the projected upside.
• Timelessness: Consider how much of a time advantage the alternative data platform offers. For instance, Advan offers population and migration data two years before the official census.
• User-Friendliness: It is important to evaluate how user-friendly the alternative data is. For example, beginners likely won’t know how to handle millions of credit card transaction data – rendering it useless. AltIndex is ideal for beginners, as its data is aggregated into easy-to-understand score metrics.

Conclusion

The alternative data market is growing at a rapid pace, with hedge funds, institutions, and now retail clients looking for an edge.

To get started with an alternative data platform today, consider AltIndex. Stock and cryptocurrency investors will find plenty of valuable data sets, from social media mentions and website analysts to overall brand sentiment.

References

https://www.uspto.gov/

https://www.cnbc.com/quotes/EBAY

https://www.sec.gov/edgar/about

https://www.census.gov/programs-surveys/surveyhelp/we-conduct-surveys.html

https://gdpr-info.eu/

https://www2.deloitte.com/us/en/pages/financial-services/articles/infocus-adopting-alternative-data-investing.html

https://www.grandviewresearch.com/industry-analysis/alternative-data-market

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