The 7 Most Common SEC Filings Every Savvy Investor Should Know & Why

By Chika


Last Updated: December 14, 2021


If you aim to be a serious investor, scrounging for information about potential companies should be second nature to you. This is the due diligence process every astute investor performs when selecting companies to invest in. 

While public listed companies release information to investors through a plethora of channels, the best place that you can get information on the nitty-gritty of the company is in the filings with the Securities and Exchange Commission.

SEC filings contain information about the company's financial performance, business segments, management board, industry forecast, insider trading, and other relevant information that gives the investor a holistic picture of the company. 

Through the information contained in these public filings, investors would be unable to estimate the fair value of the stock. When the fair value is compared to the market price, the investor would be able to determine if it is too expensive, cheap, or mispriced.

As a result, SEC filings furnish investors with the information to develop a detailed understanding of a company, thereby equipping them to make appropriate investment decisions that would optimize profits. 


The 7 Most Common SEC Filings Every Investor Should Know

1. 10-K or annual report

The 10-k filing is usually the first port of call for most investors hoping to get information about a company. The 10-k is a comprehensive annual report filed by a publicly-traded company to investors detailing its financial performance in a fiscal year

The 10-K is divided into five segments. The first segments give an overview of the company's main operations, including products and services; any and every risk the organization is exposed to; and detailed financial information from the last five years. 

The fourth segment of the document contains a summary of senior management's financial results. The company's audited financial statements, encompassing the income statement, balance sheets, and statement of cash flow, are presented in the final part.

The 10-k filing is regarded as the meat of a company's financials. It gives an overview of:

  • the business segments
  • revenue generated and how
  • debt level and a class of debtors
  • free cash flow

These are some of the important factors which can be used to estimate the fair value of a company's stock.

In summary, the 10-K contains all the information an investor needs to make an investment decision about the company.

2. 10-Q

The 10-Q filing can be seen as an abridged version of the 10-K. While the latter covers a fiscal year, 10-Q filings cover a fiscal quarter.

Quarterly filings are important because they can provide an insight into where the company is headed, especially when the company's performance is compared on a quarterly and annual basis. As a result, 10-Q acts as a harbinger of what to expect from the company in the near future. 

A 10-Q filing is divided into two sections. The first section covers pertinent financial data for the period. This contains condensed financial statements, management discussion and analysis of the entity's financial status, market risk disclosures, and internal control disclosures.

The second section provides all additional relevant data. This involves legal procedures, unregistered equity securities sales, the use of profits from unregistered equity securities sales, and senior securities defaults.

In this part, the corporation reveals any further information, including the use of exhibits. SEC requires companies to file their 10-Q within 40 days of the end of their fiscal quarter.

3. Proxy statement (DEF 14A)

The proxy statement is often overlooked by investors, but it can be a viable source of information. The proxy statement contains information on when the annual shareholder’s meeting is and what issues will be up for voting. 

This form is filed with the SEC when a definitive proxy statement is given to shareholders and helps the SEC ensure that shareholders' rights are upheld. The proxy statement helps shareholders understand corporate governance practices when it comes time to cast their votes for the proposed items. 

It also contains information on how the executives are compensated. This is important because compensation can act as an incentive to management to achieve organizational goals and increase profits.

For example, if the management has a cash compensation, they may not be motivated to implement strategies that would boost the company's financial performance and profit.

However, if the compensation is stock-based, knowing that good financial performance would be rewarded by increased investment in the company's stock (which would invariably send the price of the stock higher), the management would have the incentive to seek ways to improve the company's financial performance. 

As such, compensation can act as a modicum of accountability for executives.

4. 8-K

An 8-K  is a report about a company's unforeseen activity that may be of interest to shareholders. A press statement from the corporation is usually, but not always, included along with these filings.

When something significant happens at a company in-between its quarterly reports, an 8-K is often filed to inform the investing public. 

The information must be deemed vital enough that it must be disclosed to shareholders and the general public immediately.

Examples of information that would be contained in an 8-K filing:

  • the resignation of top management
  • modified financial forecasts
  • a large merger or acquisition

By filing an 8-K, organizations comply with SEC's requirement for full disclosure thereby avoiding allegations of insider trading. As a result, the 8-K filing provides investors with timely notification of significant changes which could affect the company's performance in the long term.

5. Schedule 13D

When a shareholder purchases more than 5% of a company's outstanding shares, a Schedule 13D is filed. Also referred to as  beneficial owner report, the Schedule 13D requires the purchasing shareholder to declare their intent for the investment.

This information can be beneficial to other investors because it could have fundamental implications for the company.

For example, activist investors may purchase shares in a company in an attempt to induce management to adopt a different strategic approach. The way this can be done is by acquiring enough voting power by purchasing shares.

The objective of the activist investor has a significant impact on the performance of the company and its shares on the market. As a result, every keen investor should keep an eye on information contained in Schedule 13D.

6. Form 13F

Though a Form 13F filing isn't exclusive to a single firm, it might help narrow down your search for potential companies to invest in. 

Institutional investors with $100 million or more in assets under management are required to file this report quarterly, detailing their holdings at the end of the previous quarter. It aims to provide the public with a view of the holdings of the largest institutional investors.

Investors sometimes use 13-F filings to track the investment positions of institutional investors and high net-worth investors. Their rationale behind this strategy is anchored on the premise that the size of institutional investors gives them the power to move markets.

So by replicating their stock positions, investors can mimic their performance. 

However, following this strategy can also mean that you are late to the party because the filings are published three months after the investments have been made. SEC requires fund managers to file 13F reports 45 days after the end of each quarter. 

Most managers submit their 13Fs as late as possible because they do not want to tip off rivals to what they are doing. As a result, you would be pursuing a forgone investment position by the time you are reading the document. 

7. Form S-1

Form S-1 is the initial registration form that companies that are planning to go public are expected to file with the SEC. Also called the prospectus, the Form S-1 sort of introduces the erstwhile private company to the public.

Among other things, it states:

  • its operations
  • how it generates revenue
  • its financial backers
  • how much it intends to raise from the public offering
  • competition
  • risk factors to its operations

This gives investors an insight into the type of company coming to the market and if it is worthwhile their investment. 

Read this next: Getting Investment Advice From Social Media? 4 Wary Concerns & 5 Ways to Take Advantage


Bottom line

For investors seeking information about companies, SEC filings are a wonderful resource. Make sure you read the filings carefully because they generally contain information that isn't included in business news releases.

Consider utilizing institutional investor filings to help you come up with new investment ideas.

Photo by Jan Antonin Kolar on Unsplash


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