Best Alternative Data Providers & Sources 2024

Alternative data is a trending topic in the investment space. After all, it provides investors with real-time insights and trends outside of traditional data sources.

But where is the best place to find alternative data?

This guide compares the 8 best alternative data providers for 2024. We examine the top providers for data accuracy, timelessness, pricing, and much more.

Top Alternative Data Platforms: Full Reviews

We will now move on to our comprehensive reviews of the best alternative data providers.

Each provider specializes in a niche area of alternative data – such as satellite imagery, geo-location signals,  and real-time aviation trends.

Investors can read on to choose the best alternative data platform for their trading requirements.

1. AltIndex – Overall Best Alternative Data Provider for Retail Investors 

While high-level alternative data often comes at a vast cost – this isn’t the case with AltIndex. On the contrary, AltIndex does not charge any fees at all. So what is AltIndex? In a nutshell, AltIndex provides real-time insights on thousands of data points. It serves two investment spaces – stocks and cryptocurrencies.

Regarding stocks, it supports thousands of companies that are listed in the US. This covers some of the best small-cap stocks on the NYSE and NASDAQ. There are various ways to find trending stocks on AltIndex. For example, users can search for their preferred stocks to reveal many alternative data points.

This includes social data, such as the number of followers, likes, and searches. Not to mention overall brand sentiment on social media. Website data is also provided, such as traffic and page visits.
AltIndex also examines job posting trends associated with the respective stock.

For instance, if the number of job postings is trending upward, this could highlight the firm is in a strong financial position. Additionally, AltIndex also provides alternative data on news mentions, ESG scoring, and the overall business outlook. Another useful feature is that AltIndex tracks patent filings.

This can be useful when searching for biotech stocks with new treatments. Those without experience in interpreting alternative data will also find AltIndex of value. It offers stock price predictions based on all of the data it gathers.

This is in addition to an overall investment rating that is generated by artificial intelligence (AI).
It also uses AI to give stocks an employment, brand, and growth score. Another way to find trending stocks on AltIndex is to click on a specific data point.

For example, when selecting ‘Reddit Mentions’, we find that Bank of America has increased by 371% in the prior seven days. Cryptocurrency investors will also find that AltIndex provides valuable insights. It offers data points on Bitcoin and some of the best altcoins.

This includes Dogecoin, Ethereum Litecoin, and XRP. We found that social media metrics are particularly useful when analyzing cryptocurrencies on AltIndex. For example, the number of mentions on Facebook, Reddit, Twitter, 4chan, and news articles.

It also provides trends on social media followers, website traffic, and Google searches. AltIndex also offers cryptocurrency price predictions and an AI score on whether the coin is a buy, sell, or hold. To get the most out of AltIndex, it’s best to open a free account. This enables users to create a watchlist and receive alerts.

2. FlightAware – Get Real-Time Insights on Commerical, Private, and Cargo Flights  

FlightAware provides an unprecedented range of alternative data from the aviation, travel, and supply chain industries. It is best known for tracking commercial flights on a global and real-time basis. That said, it also tracks private jets and cargo transportation.

Some of the use cases are as follows. First, those with exposure to aviation stocks can extract insights into specific airline performances. For example, the percentage of flights that depart and arrive on time, and the number of delays and cancellations.

Moreover, an analysis of the routes taken by airlines can yield information on efficiency and fuel costs. Crucially, this alternative data enables investors to assess the investment thesis on airline stocks, such as Delta, Southwest, and Ryanair. For instance, suppose an airline is constantly experiencing delays or cancellations.

This will not bode well for the airline stock in the long run. Another use case of  FlightAware is to evaluate broader travel industry trends. For example, a bullish market might see new routes and destinations being added by airlines. But a bearish market might see a reduction in flight numbers.

FlightAware can also be used to analyze the efficiency of supply chain routes, considering it also tracks cargo transportation. Those wanting full functionality on FlightAware will need to consider signing up for the Enterprise WX plan, which costs $149.95/month.

3. Plaid – Alternative Finance Data to Analyze Consumer Spending Habits   

We found that Plaid is one of the best alternative data providers for financial data. Plaid provides insights into consumer spending habits and trends, via credit card transactions. Not only is data extracted from over 12,000 banks and financial institutions in the US, but also from Canada, the UK, and Europe.

Moreover, alternative data is also extracted from over 8,000 financial apps and services. This provides an unparalleled amount of alternative data for investors. As such, the only way to use Plaid is via an API. This enables users to sort and filter data that is relevant to their needs. 

It is important to note that the credit card data provided by Plaid complies with privacy protection regulations. In other words, it doesn’t provide any personal information about the buyer. It does, however, provide a lot of insights into transactions themselves. 

For example, Plaid displays the size of the transaction in the local currency. It also shows the category, such as retail, entertainment, or energy bills. Plaid also displays the location of the transaction, including the full address and postcode. 

This information provides investors with a range of insights, fueling informed investment decisions. For example, if credit card data in the UK shows that there is increased spending on non-essential goods, this highlights that consumer sentiment is positive. 

In turn, the investor might consider gaining exposure to UK-based retail stocks. Similarly, if there is increased spending on travel-related services in the US, this could warrant investment in the aviation industry. When it comes to pricing, Plaid offers bespoke monthly plans. Users can also buy data on a pay-as-you-go basis.  

4. SimilarWeb – Leading Provider of Website Analytics and Internet Traffic Data

We found that SimilarWeb is one of the best alternative data providers for website analytics. This provides investors with invaluable data on internet traffic, enabling them to assess which brands are trending. There are many aspects to the SimilarWeb platform – so let’s break down the key use cases. 

First, investors can explore the most trending websites, in terms of daily and weekly visits, as well as percentage gains and losses. Investors can then break this information down further by the specific sector or industry. For example, an investor might want alternative data on the best stock trading platforms.

SimilarWeb will then provide real-time insights on visitor numbers, ranked from top to bottom. It will also display which stock trading platforms have witnessed the biggest jump or decline in visits over a specific period. Stock trading platforms rely on website visits to make money, as trading results in commission.

In turn, if a certain stock trading platform is experiencing a surge in visits and time spent on its website, this could mean the company is doing well financially. And hence, the investor might consider buying the platform’s stock. In addition to visits, SimilarWeb provides plenty of other alternative data points.

For instance, whether users are visiting the desktop or mobile version of the website. Or whether they have downloaded the platform’s app. Demographics can also be broken down by gender, age, and country of the visitor. In terms of pricing, the starter and professional plans cost $125 and $333 per month, respectively.

5. SECFilings.com – Real-Time Alerts on Filings Made With the SEC 

Another top-rated source of alternative data is SECFilings.com. As the name suggests, this platform provides an all-in-one dashboard for filings made to the US Securities and Exchange Commission. Currently, there are more than 18 million filings on the platform. However, the real value comes from its alert service.

For instance, suppose a large hedge fund files an application to the SEC to launch a Bitcoin ETF. This could result in a temporary increase in Bitcoin’s price. Those signed up to SECFilings.com would have received a real-time alert as soon as the application was submitted.

As such, they would have had an edge over the broader crypto market. Similarly, SECFilings.com is also useful for insider stock transactions, which also need to be submitted to the SEC. This provides information on stock purchases or sales made by company directors and executives.

For instance, suppose the company CEO sells a large quantity of stock. This could be viewed as a major red flag and a complete lack of belief in the company. Considering the information is received in real-time, investors can trade the filing.

Another use case is to keep tabs on small-cap stocks. After all, small companies rarely make the financial headlines, making it difficult to keep tabs on their performance. Other useful filings include company director changes, regulatory compliance, and legal proceedings.

6. Advan – Alternative Data for Foot-Traffic Analytics in the Real Estate Industry 

Advan is one of the best alternative data platforms for obtaining foot-traffic analytics. Put simply, this refers to real-time data on the movement of people. Advan obtains its alternative data in many different ways. This includes geo-location methods, such as WiFi, Bluetooth, and GPS signals.

It has also formed partnerships with over 1,000 mobile app providers. When installed on a user’s phone, this also provides real-time data on their movements. All data collection methods utilized by Advan comply with privacy regulations. This means that the identity of the individual users being tracked is not made public.

Although Advan serves many different industries, it is particularly useful for commercial real estate investors. This is because Advan provides alternative data on a wide range of real estate trends.

For example, it can break down specific housing markets by consumer behaviors, population growth, work-from-home metrics, and income bands.  This enables real estate stakeholders to make informed investment decisions.

Not only that, but Advan updates its data on a monthly basis. This provides investors with data two years faster than census reports. According to Advan, its alternative data correlates to the official census by 98%. The main drawback with Advan is that it doesn’t publish its prices. Instead, users will need to ask for a custom quote. 

7. Foursquare – Geo-Location Data for the Retail and Hospitality Sectors 

Foursquare is also one of the best alternative data platforms for obtaining geo-location data on foot traffic. But unlike Advan, Foursquare specializes in the retail and hospitality sectors. It has access to an unprecedented amount of alternative data from over 50 million users. 

The data is collected in real-time from GPS, BlueTooth, and WiFI signals. All of the information it collects enables investors to evaluate consumer trends and sentiment. For example, suppose an investor noticed that a new fast food chain is witnessing significant growth throughout the US. 

It also finds that people are spending longer time frames when visiting the fast food chain. Not only that, but the fast food chain continues to witness repeat business from previous customers. These trends highlight consumers have positive experiences with the chain. 

Perhaps because of food quality, service, and/or value.; Either way, the investor might then decide to buy stock in the company. Ordinarily, most investors would wait until the company releases its quarterly report to obtain information on revenue and operating income. 

But by using Foursquare, investors get a first-mover advantage. Moreover, Foursquare users can also leave ratings and reviews, which provides even more invaluable data. Foursquare pricing depends on the depth and number of API requests the user needs.  

8. Descartes Labs – High-Level Satellite Imagery for Commodity Traders

Descartes Labs is one of the best alternative data providers for commodity traders. It specializes in high-level satellite imagery. But rather than simply providing satellite images to its clients, Descartes Labs goes one step further. 

This is because the Descartes Labs team will analyze the images to assess potential trends surrounding demand and supply. For example, consider a satellite image of a large-scale wheat farm. Through satellite imagery, investors can assess the farm’s crop quality and potential production yields.

This enables investors to make forecasts on the demand, supply, and price of wheat. In another example, Descartes Labs is also useful for evaluating crude oil supplies. For example, a satellite image can provide information on the number of oil barrels being stored in key oil-producing countries.

Satellite images can also be used to gain insights into potential supply disruptions. This would then allow the commodity trader to enter a long or short position accordingly. Descartes Labs claims to have a commodity forecast accuracy rate of over 90%. Prices are not displayed on its website, meaning users will need to obtain a custom quote. 

What are Some Examples of Alternative Data?

Now that we have covered the basics, let’s explore some real-world examples of alternative data. 

Social Media Metrics

One of the most powerful alternative data sources is social media. After all, according to Statista data, more than 4.8 billion people use social media globally.

A good example of this is AltIndex, which scrapes real-time data from the most popular social media platforms. This includes Twitter, Facebook, and Reddit.

AltIndex provides insights on which stocks are trending on social media, in terms of:

• Mentions
• Searches
• Followers

AltIndex will then provide this alternative data in an easy-to-view format. For example, it provides a ranking list based on which companies are witnessing increased engagement on social media. It also does the same for companies that are seeing a decline in sentiment.

This enables investors to make informed decisions on which stocks to buy or sell. For instance, consider a stock that witnessed a huge increase in followers over the prior seven days. This could indicate that the company has positive sentiment from the broader social community.

In turn, the investor can then look at reasons for this sudden growth, such as a new product or service. After performing due diligence, the investor might then decide to buy stock in the company.

Website Traffic and Trends

Another example of alternative data is to look for website traffic and trends. One of the best alternative data sources for this purpose is SimilarWeb.

Let’s suppose that SimilarWeb data shows that the Etsy website continues to see a decline in the number of daily visitors. As an e-commerce marketplace, Etsy relies on visitors, who, in turn, pay commissions on sales.

This decline concerns the investor, who currently holds a position in Etsy stock. As such, the investor decides to offload their Etsy stock as a risk management strategy.

This example shows that alternative data not only highlights investment opportunities – but also potential portfolio risks.

Financial and Regulatory Filings

Companies listed on US stock exchanges must make filings to the SEC. This is required for various reasons related to regulation, compliance, financial performance, and director changes.

Another requirement for companies is to file insider transactions related to stock purchases or sales. This provides a great source of alternative data for investors.

However, a significant number of SEC filings are made on a daily basis. So staying up-to-date can be a logistical nightmare. This is where platforms like SECFiling.com can help. The platform sends real-time alerts when selected companies make a new filing to the SEC.

• For instance, suppose the investor receives an alert from SECFilings.com about a new filing made from a small-cap stock.
• The filing refers to an insider transaction, where a company director has purchased a significant number of shares.
• This highlights that the director is bullish on the future potential of the company.

As such, an investor might decide to follow suit, by also buying stock in the firm. After all, the director wouldn’t have invested their own money if they didn’t believe in its potential.

Foot Traffic and Geo-Location Data

Another great source of alternative data is foot traffic. This provides insights into the movement of people, usually in real-time. The data is collected in various ways, but the most effective is via geo-location information.

For example, Foursquare collects data from WiFi, Bluetooth, and GPS signals across more than 50 million users. There are many use cases for this data from within the hospitality and retail sectors.

• For instance, suppose a real estate investor is considering investing in a shopping mall.
• To assess the availability of the investment, they use foot-traffic analytics provided by Foursquare.
• The alternative data shows that the shopping mall consistently attracts foot traffic throughout the week, with an even bigger surge over the weekend.

This data convinces the investor to proceed with their shopping mall investment.

Satellite Imagery

Alternative data providers like Descartes Labs provide high-level satellite imagery. One such use case is in the commodity trading industry.

For example, consider an investor that receives a satellite image of a major oil production facility in Saudi Arabia. The image shows that storage tanks next to the facility are nearing maximum capacity.

This highlights that there could potentially be a short-term reduction in demand. In turn, the investor might enter a short-selling position on CME oil futures.

Key Advantages of Alternative Data for Investors 

Still not sure if alternative data warrants the hype?

Here are some of the main advantages of using alternative data to make investment decisions.

First-Mover Advantage

One of the main reasons seasoned investors use alternative data is it gives them a first-mover advantage. This means that investors can enter and exit trades based on information that isn’t readily available to the public.

For example, consider an investor that obtains satellite imagery on increased tensions near a major natural gas supply route. The investor can enter a long position on natural gas, in anticipation of supply chain constraints.

Early Risk Warnings 

Another advantage of alternative data is it can provide early risk warnings to investors. For example, suppose an investor analyzes data from FlightAware. They find that an increasing number of airlines are reducing flight schedules.

This indicates that the broader aviation industry is experiencing reduced demand. As such, an investor holding aviation stocks can exit their position at the earliest possible time.

Find New Investments Before They Become Mainstream 

Hedge funds, asset managers, and many other financial institutions use alternative data to find undervalued investments. For example, consider a newly listed pharmaceutical stock that specializes in medical cannabis treatments.

The pharmaceutical company recently filed a patent with US and European regulators. Alternative data of this nature is highly valuable. It highlights that the pharmaceutical stock has potentially discovered a groundbreaking treatment. Therefore, investors can buy its stock well before the news comes mainstream.

What to Consider When Selecting an Alternative Data Platform

Earlier in this guide, we reviewed the 8 best alternative data providers for 2024. However, there are many other providers in this space. As such, investors should know what to look for when selecting a platform. 

The key considerations to make are discussed below.

Type of Alternative Data

The first step is to evaluate the type of alternative data provided by the platform. For example, AltIndex specializes in social media metrics, website analytics, and brand sentiment on stocks and cryptocurrencies.

SECFilings.com, on the other hand, provides real-time alerts on new regulatory filings made with the SEC. Then there’s Plaid, which offers credit card transaction data from banks in the US, UK, Canada, and Europe.

Legitimacy

Next, investors should do some due diligence on the alternative data platform. After all, if the alternative data is being used to make investment decisions, it must be accurate.

The best way of assessing this is to explore how the provider obtains the data. For example, Advan uses geo-location tracking methods. It obtains real-time data from GPS, WiFi, and Bluetooth signals – not to mention partnerships with over 1,000 apps.

Having an understanding of how alternative data is collected will provide insight into its credibility and accuracy.

Time Delay

Timing is crucial when making investment decisions on the back of alternative data.

For example, suppose an alternative data platform offers website analytics. This enables investors to evaluate trending brands via website visits and other traffic data. However, if the analytics are not provided in real-time, the data is likely useless.

Ultimately, alternative data should be provided in the fastest time possible. The quicker the information is received, the greater the edge in the market.

Costs vs Expected ROI

In many cases, alternative data is expensive. This is because of the methods required to obtain the alternative data.

For example, not only does Descartes Labs offer high-level satellite imagery, but an in-house team that analyzes the data. This doesn’t come cheap, so providers like Descartes Labs are largely aimed at institutional investors.

With this in mind, investors need to consider the costs of obtaining the alternative data, alongside the expected return on investment (ROI). Crucially, there needs to be a suitable upside when purchasing alternative data. This is because there is no guarantee that the data will yield investment returns.

Conclusion

The best alternative data providers for 2024 have been ranked and reviewed. While most alternative data sets are costly, AltIndex is ideal for casual investors.

It offers fee-free data sets on thousands of stocks and cryptocurrencies, including social media trends, Google searches, and an AI-backed sentiment score.

AltIndex also sends alerts when a new trend has been discovered, giving investors an edge in the market.

References

https://coinmarketcap.com/currencies/bitcoin/

https://www.sec.gov/

https://www.statista.com/statistics/617136/digital-population-worldwide/

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

https://www.nasdaq.com/

https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.html

https://www.similarweb.com/blog/investor/asset-research/hedge-funds-use-alternative-data/

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