How To Use SEC Filings For Your Market Research

The Securities and Exchange Commission (SEC) likely isn’t the first organization that comes to mind when you need to conduct market resear
President, Proximo, LLC
May 09, 2011

The Securities and Exchange Commission (SEC) likely isn’t the first organization that comes to mind when you need to conduct market research. But it turns out that the SEC offers a wealth of valuable data for small businesses–all for free.

Any company that has publicly traded debt or equity securities must file certain documents and forms with the SEC. Since 1996, most of these filings are available online via the Electronic Data Gathering, Analysis and Retrieval system or EDGAR. The system offers access to hundreds of thousands of filings, going back to 1994 for thousands of companies. The filings are indexed and searchable by company name, ticker symbol, central index key (an SEC-used ID number), file number and more. There is also a free text search form, which accesses filings from the most recent four-year period.

The available filings provide mountains of market research and information. Even if your business is just starting out and only has a single employee, you can benefit. Your larger, publicly-traded competitors must include relevant information about their businesses in these filings. You can use this information to learn about your industry, see how competitors are responding to changes in the market, learn about their revenues, expenses and margins. The list goes on and on.

Unlike press releases, brochures, phone calls with salespeople and other market data gathering techniques, SEC filings are very reliable. A company’s management team has carefully prepared all of the content and lawyers and accountants have carefully reviewed them. Most importantly, the managers are putting their reputations on the line based on what these filings contain. They risk criminal and civil penalties based on their veracity.

There are many dozens of types of SEC filings, each identified with an alphanumeric code. Some are more important than others. When looking for information consider downloading the following filings.

  • S-1: This is the basic registration filing used when a company is going to offer publicly-traded securities for the first time. It can provide a great overview of a company’s industry, competitive landscape and future trends.
  • S-4: Registration of public securities as a result of a business combination or exchange offer. This is commonly filed when a merger or acquisition takes place. It can be a great source of information on valuation.
  • 10-K: Audited annual report. This provides a comprehensive overview of a company’s business. It must be filed within 90 days of the end of the company’s fiscal year.
  • 10-Q: Unaudited quarter reports. This must be filed within 45 days of the end of the quarter. It provides a good overview of the company’s most recent performance.
  • 8-K: This report is filed whenever there is material news or events in the life of the company that could be important to investors. This includes a merger, acquisition, changes in management, changes to the Board of Directors, major contracts and more.

This list is hardly exhaustive of available SEC filings (that list is here), but these documents are more than sufficient to conduct effective market research. Take a few hours this Saturday morning to read the most recent 10-K of a large competitor. You’ll be impressed with how much you will learn about them.