The Best Investment Information Sources
Using SEC Filings, Analyst Reports, and Company Websites
Investors are inundated with information from high-level press releases to detailed SEC filings. While it's always better to be informed, the sheer volume of information has made it difficult to separate the signal from the noise.
- Press releases often ignore bad information and focus on the good
- Analysts have a notoriously bullish bias
- SEC filings can be difficult to parse for useful information amid the legalese
However, the three most important sources of information on a company's performance are still the Securities and Exchange Commission (SEC) filings, reputable analyst reports, and information from the company website.
The U.S. Securities and Exchange Commission requires most U.S. listed companies to report financial data, insider transactions and other material information in so-called SEC filings. Many foreign companies are also required to make periodic filings containing the same information if they're listed on U.S. exchanges. By knowing how to find and analyze these SEC filings, investors can ensure that they are well informed and up-to-date on all of the most important developments.
Investors can find SEC filings in many places. The SEC's own EDGAR database is a quick and easy way to find any filings, while specialty services like SECFilings.com or EdgarOnline offer customizable alerts and other features.
Some important SEC filings to know include:
- 10-K (Annual Report): Annual reports provide investors with a detailed overview of a company's fiscal year, including financial statements and a discussion of the results by management in plain English terms.
- 10-Q (Quarterly Report): Quarterly reports provide a slightly less comprehensive overview of a company's quarter, but also include the quarter's financial statements and some management discussion.
- 8-K (Current Event): Current event reports are filed for any material events that affect the company, ranging from basic press releases to new partnerships.
- Form 3, 4 and 5 (Insider Trading): Insider trading reports provide investors with notifications whenever company insiders purchase or sell shares, which can be an important indicator, especially when done outside of stock plans.
- Schedule 13D and 13G (Institutional Investment): Institutional investment reports provide investors with notifications when an institutional investor (such as a hedge fund or mutual fund) acquires a significant stake, which can be very helpful for investors.
International investors have it a little harder. While many American Depository Receipts (ADRs) file regular SEC filings, some file foreign issuer reports that can be much more difficult to access and parse for useful information. And foreign stocks trading on non-U.S. exchanges often file only with their own country's regulatory body. Unfortunately, these filings may appear in foreign languages and can be much more difficult to analyze than SEC filings.
Two common foreign SEC filings include:
- 20-F (Annual Report): These annual reports are filed under U.S. GAAP principles, which can make them easier to understand and compare with U.S. companies.
- 6-K (Quarterly/Current): These are the foreign version of 8-K reports, which also tend to include 10-Q-type information for most ADRs.
Some common foreign regulatory bodies include:
- Canada's SEDAR Database
- China's SAIC Agency
Corporate websites can contain a wealth of information about a company, from financial statements to presentations, and they can be much easier to navigate than many government agency websites when looking for financial information. This is especially true for international investors looking for information. The most important things to look for include:
Sometimes finding financial statements for foreign companies is much easier using their website than the country's filing system.
Company presentations can provide a great overview of past performance, as well as projections for the coming quarters or year.
Company news and press releases can contain a wealth of information about day-to-day operations and financial performance.
Investor contacts, such as Investor Relations Officers, can be a great resource for investors looking for something they can't find elsewhere.
Securities analysts can be a great source of information for investors. While sell-side analysts may be biased at times, they still offer some valuable information in a single location. This makes research a lot easier, especially for international investors. Buy-side analysts are an even better source of information since they are typically not as biased, but their research usually isn't as widely available. Analyst reports can be found in places including:
Many stockbrokers offer access to certain analyst reports for their clients, including many discount brokerages such as Schwab and ETrade.
Some companies offer analyst research to potential investors, either through their website or by e-mail or phone request.
Some news agencies write about analyst research, while services like Yahoo Finance, Morningstar, Investopedia, and others provide research synopsis and financial literacy information to readers.