Analyzing companies in a volatile market can be frustrating and, if you’re not careful, can lead to bad investment decisions.
Here is the problem: most investors rely on information about a company that comes from reports required by the Securities and Exchange Commission.
The best known of these reports is the annual report, however companies are required to file a more detailed report with the SEC known as the 10-K.
The 10-K strips away the color photos and self-lauding rhetoric and focuses on the numbers and other important disclosures.
When you look up a company’s annual report or 10-K, you are looking at a snapshot of the business taken at the end of its fiscal year.
If you study the annual reports of the big financial companies from the most recent fiscal year, which for many ended on December 31, you could be looking at information that has changed dramatically.
Most online services that track companies’ financial information update on a regular basis.
However, most update the information on a quarterly basis. They use a SEC report known as a 10-Q, which is filed on a quarterly basis.
However, investors can view the reports as soon as they are posted on the SEC Web site.
Edgar is one service that lets investors retrieve 10-K and 10-Q reports along with all the other reports the SEC requires.
It is not particularly easy to use, but with some practice you’ll be able to navigate your way around the site.
The take away here is that if you are considering investing in a company that is in a fast-moving sector, take some time to view the most up-to-date information filed with the SEC.
You may find some interesting information, such as huge write downs of bad loans.
Here is the problem: most investors rely on information about a company that comes from reports required by the Securities and Exchange Commission.
The best known of these reports is the annual report, however companies are required to file a more detailed report with the SEC known as the 10-K.
The 10-K strips away the color photos and self-lauding rhetoric and focuses on the numbers and other important disclosures.
When you look up a company’s annual report or 10-K, you are looking at a snapshot of the business taken at the end of its fiscal year.
Problem Stocks
The problem for investors is that a lot can happen in a year, so if you are looking at the latest annual report or 10-K you may be studying information that is many months old.If you study the annual reports of the big financial companies from the most recent fiscal year, which for many ended on December 31, you could be looking at information that has changed dramatically.
Most online services that track companies’ financial information update on a regular basis.
However, most update the information on a quarterly basis. They use a SEC report known as a 10-Q, which is filed on a quarterly basis.
Lag Time
There is some lag time between companies file their 10-Q and when the information is available to investors.However, investors can view the reports as soon as they are posted on the SEC Web site.
Edgar is one service that lets investors retrieve 10-K and 10-Q reports along with all the other reports the SEC requires.
It is not particularly easy to use, but with some practice you’ll be able to navigate your way around the site.
The take away here is that if you are considering investing in a company that is in a fast-moving sector, take some time to view the most up-to-date information filed with the SEC.
You may find some interesting information, such as huge write downs of bad loans.