Beginner’s Guide to SEC Filings

Thu Jan 7, 2021, 06:20 pm | by Alexis Jurcak | No comments

If you’re a trader, you’ve most likely heard of the term “SEC filings.” You might have heard of them, but what exactly are they? You might be asking yourself, “How are they beneficial for me as a trader, and why is it important that I understand the different types?” There are many different types of filings registered under the SEC. 

In this blog post we’ll review what SEC filings are, and the most common filings that could be beneficial to your trading.

What is an SEC Filing?

First, what does SEC stand for? SEC stands for Securities and Exchange Commission. This is an independent federal regulatory agency created to protect traders and maintain a fair marketplace. The SEC is there to make sure that whenever a company decides to go public, the information they share is quality and transparent.

SEC filings are required to be registered by companies, certain company insiders, and broker-dealer relationships. The most important thing to remember when reviewing SEC reports is that the information contained in these filings are for the benefit of the trader and are provided to give you a clear view of company performance history and possible future performance. The data included in these reports can range from management decisions, breaking news reports, analysis of financial conditions, and much more. 

What are Companies Required to Submit? 

First and foremost companies must go through a registration process when proposing to go public. This registration process will include company details that outline what is going to be offered to traders and investors. This registration process consists of two parts. Part one is known as “prospectus” or the S-1 Form. The second part of the registration filing is known as private filings which must be shared with the SEC but not with the public. 

The company is required to file annual 10-K and quarterly 10-Q reports. The information provided in these filings are certified by the CFO and CEO when sending them to the SEC. Lastly, they are required to report current reports, better known as the 8-K report. 

Common SEC Filings to Know 

S-1 Form

This is required to be issued to traders and investors when the company first goes public. The functionality of this form is to highlight the future hopes of the company. Because the company just went public, they have little information to communicate to investors the history and future of the company. This form indicates the planned use of funds, the number of shares to be issued, the company’s business model, competition, offering price methodology, and risk factors. This form gives the trader a general idea of the health of the company and whether it’s something they think would be worth investing in. 

10-K Form

The 10-K form is one of the more well-known SEC filings. This form presents the annual financial performance of a company and must be submitted to the SEC within 90 days of the end of the fiscal year. 

This form includes a detailed summary of audited financial statements and company results. This is the most lengthy of the forms due to the amount of information that is required. A big portion of the 10-K is known as the MD&A which describes management discussions. This portion includes how the company performed in the prior year, the current financial condition, and management projections. 

This portion of the form contains 3 mains sections: 

1. Liquidity and capital resources

2. Results of operations

3. Accounting estimates. 

The importance of the 10-K is that it gives you a comprehensive analysis of the company. This form may be most beneficial when conducting initial research on a company for the first time.  

10-Q Form

As the “Q” indicates, this is a quarterly version of the 10-K form to report the performance of the company.. However, unlike the 10-K, this includes unaudited information. 

The main purpose of the 10-Q is to allow traders to have current updates on the financial performance of the company. This allows insights into how the company is performing even before they report their quarterly earnings. Some important sections most beneficial to review including changes in working capital, accounts receivable, factors that have changed inventory, and legal risks the company is facing or may face in the near future.

8-K Form

This form communicates any changes within the company that was unable to make it onto the 10-K and 10-Q Forms. These changes are those that are generally unforeseen by management but impact the health of the company. These changes could include bankruptcy, a director resigning, new executives being appointed, and or other significant developments in the works. 

Similar to the 10-Q report, 8-K’s are another method to determine the current state of the company and acts as another method for economic research. The great thing about reviewing 8-K forms is many of the changes that need to be reported are explicitly outlined by the SEC or reported because the company found it noteworthy for traders and investors to know. 

Form 4

These reports are submitted by investors who buy or sell shares in companies and are considered insiders. These insiders can be directors, officers, and or any shareholder that owns more than 10% of the company’s outstanding stock. Anytime that one of these insiders buys or sells stock, it’s reported on this form. The importance of reviewing this form as an investor or trader is it gives you a reflection of what’s going on within the company. The indication of buying and selling stock from insiders can indicate how these insiders consider the overall future health of the company. This type of knowledge acts like “private information” and can give you an insight into things unable to be considered by the public. 

How to Find SEC Filings in Benzinga Pro 

Benzinga Pro makes it super easy to find SEC filings of specific companies all in one platform.

All you have to do is open your Newsfeed, choose your source. In this case, you would choose SEC, and it’s as simple as that. You’ll have a dedicated Newsfeed just for SEC filings. The best part about this is while reviewing the SEC Filings you’ll be able to pull up other analysis about the specific company you’re researching. You can find more information on how useful the Newsfeed Tool can be in terms of researching companies with SEC filings here.

Don’t forget to check out our help site for more information on our tools in a video format!

Final Thoughts

Although there are many more SEC Filings, the ones mentioned in this blog post are the ones most commonly used and reviewed by traders and investors. As a trader, it’s important to keep up to date with these filings. You can use the SEC’s EDGAR database, or use Benzinga Pro to easily navigate a platform that allows you to find SEC Filings, news, and more. Start your FREE trial today and unlock the powerful information the SEC filings hold all on your desktop all in one place.