Lesson 5 of 6
Apart from the financial statements and supplementary information available about the company, a financial analyst also uses some other sources of information in his analysis. Some of these sources are discussed below:
Quarterly and semi-annual reports: Apart from the annual reports on Form 10-K, issuers must also submit quarterly reports on Form 10-Q. The Form 10-Q includes unaudited financial statements and provides a continuing view of the company’s financial position during the year. Form 6-K is a similar form filed semi-annually by non-US companies.
Form 8-K: In addition to filing annual reports on Form 10-K and quarterly reports on Form 10-Q, public companies must report certain material corporate events on a more current basis. Form 8-K is the “current report” companies must file with the SEC to announce major events that shareholders should know about.
Proxy Statement / Form DEF-14A: A company is required to file its annual proxy statement with the SEC no later than the date proxy materials are first sent or given to shareholders. It’s called a “DEF 14A” because it’s the “definitive,” or final, proxy statement. Proxy statement includes important information such as proposals requiring vote, details of securities owned by management, details of executive compensation, etc.
Form 3, 4 and 5: Corporate insiders – meaning a company’s officers and directors, and any beneficial owners of more than ten percent of a class of the company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934 – must file with the SEC a statement of ownership regarding those securities. Form 3 is the initial statement, Form 4 reports changes, and Form 5 is the annual report.
Corporate Reports and Press Releases: These are generally viewed as sale or promotional material however may contain important information that could help analysts. The analysts may also attend conference calls held by senior management where they could get their questions answered.
The analyst can combine the company specific information with other information such as industry trends and economic parameters while preparing their research.