What are SEC Filings?
The SEC (Securities and Exchange Commission) is the governing agency of the U.S. securities markets, responsible for enforcing the federal securities laws and regulating public companies, broker-dealers, investment advisers, mutual funds and transfer agents. SEC filings are documents filed with the SEC by U.S.-based companies that have to do with their business or operations in order to comply with certain regulations or meet reporting requirements. The US Securities and Exchange Commission provides a lot of useful information for investors. One of the most valuable resources is the SEC filing archives, which give a snapshot into what each company within the market is doing with their shares. If you want to get a “reading” on how somebody’s business is doing at any given point in time, it’s best to pull up their filing documents. These filings are publicly available upon request through The EDGAR Database .
The information contained in the filings may be quite wide-ranging, but they are typically categorized into three types:
- Annual Reports are made with the SEC by all public companies, with an annual deadline of 45 days after the end of each company’s fiscal year. This report focuses on a company’s performance over the previous year, as well as its plans for future operations and financial statements.
- Periodic Reports are periodic reports that public companies must submit to the SEC between annual reports, with deadlines typically 90 days after the end of each quarter. These documents contain information about a company’s results of operations, cash flows and changes in stockholders equity for that period. Most periodic reports also contain financial statements and management discussions and analysis (MD&A).
- Current Reports are submitted with the SEC between periodic reports and annual reports, and typically contain information about a company’s operations, its financial statements and management’s statements (MD&A).
SEC filings can be made using electronic filing through The EDGAR Database , where the documents are electronically stored. The U.S. Securities and Exchange Commission’s website provides information on how to access this database, including instructions on how to make requests for certain types of transactions.
Use of SEC filings
SEC filings are used by investors, business entities and the general public to enable monitoring of companies’ performance over time. These documents are also used by market analysts, industry professionals and researchers to gather information about particular businesses. They can provide information about a company’s products or services, revenues, earnings statements and financial conditions. However, since these documents do not reflect all aspects of a company’s operations (e.g., some information may be omitted), investors should always compare these statements with other sources to get a clearer picture of the company’s performance.
What Helpful Information Can You get from SEC Filings?
If you’re looking for disclosures about who owns what stock, we recommend the following:
- Significant holdings in company A relative to company B. If company A holds 1% of two competitors and only 0.2% of another competitor, but company B holds 100% of a competitor and 0% of another competitor, you might think maybe they’ve got something against these companies. On the other hand, they might have a position you don’t know about. Of course, if company A has 70% of stock in company B and nothing in any of the others, that’s probably a better sign.
- Insider sales (of shares owned by executives). If company A insiders are selling shares and company B insiders buying shares at the same time, that can be an indication of some sort of conflict between the parties involved: management and management: shareholders: or shareholders: management:
- Other holdings. You don’t need to know who owns everything; you only need to look at the changes. If a company that you’re in is in a position of strength, and a company that they’re in is in a position of weakness, the chances they’re going to be friendly are lower.
- Direct holdings: You can look up who owns what stocks. And they’ll show you everything up to 100%. Anybody owning more than 100% isn’t revealed. In some cases this makes sense for them to keep it private, but in others it doesn’t. In any case, if there’s someone with 20 million shares under their name and they only have 2 million dollars worth of property listed on their tax return, you can say that they might not be holding all of it temporarily.
- Stock sales: If you’re at all familiar with share trading, this should tell you something. If company A is selling shares to company B, and vice versa, that’s also worth knowing.
While all of these information about other companies can be accessed through the filings, startups are also required to also disclose their own information also at some point through SEC filings of their own. These filings follow specific rules that are expected to be adhered to by all companies. Fintalent, the hiring and collaborative for tier-1 M&A and Strategy Professionals offers a variety of finance professionals that can help businesses with their SEC filings when required.