A Beginner’s Guide to EDGAR (Or ‘How I learned to love the SEC’)
A lot of people don’t realize the amount of knowledge that there is available on publicly traded companies. When they say ‘public’, they really mean ‘public’. Public companies - the kind that trade on stock exchanges and you can find in your 401k plans - are required to file a slew of documents with the Securities and Exchange Commission (SEC) which they provide over the Internet for free to potential investors on a server called EDGAR.
It’s not the most user friendly system in the world, but what they lack in interface they make up for in content. You can find the following types of documents on their server:
- 10-K: This is the standard yearly financial statement filing. They’re audited by independent accounting firms to make sure they’re doing it right.
- 10-Q: These are the quarterly filings. Generally they’re not audited by firms, but are more like guideposts that can be useful in predicting what the 10-K will be for the year.
- 8-K: Anytime there’s a material change to a firm (basically something investors would want to know) the company files an 8-K with the SEC. This is where you get information like mergers and acquisitions or significant events occur.
So let’s say you want to look at Coca-Cola.
- Click on ‘Company Listings’
- Click on ‘Company Searches’
- Look up the company’s ticker symbol here or here.
They provide a link that can look up the CIK. This is nice, but it tends to provide an almost confusing amount of companies sometimes. ‘Coca Cola,” for example, brings up 46 entries. This is because many companies can have multiple entities that must file separately (Coca-Cola’s bottling company vs. holding company, for example), as well as the fact that many companies can have similar or identical names if they’re incorporated in different states and/or different industries.
4. Click “Enter” and look for the document you want; Form 10-K is generally the most interesting.
Here’s the link for Coca-Cola Enterprises.
As you can see, there’s a wealth of information about the company, it’s core business, who the major shareholders are, its financial statements, risk factors, pending court cases, corporate governance…
It’s a great resource not only for investors, but for entrepreneurs who want to learn more about their major competitors and the way they’re doing business. Even people who are just plain curious about how an industry or company works can look these up. I’ve found that if you ever have an important job interview coming up it’s a great way to get a very solid understanding about a company’s business model and how the company presents itself to the public. All in all, it’s a neat little database.