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Online Investor
"Why You Should Get to Know EDGAR"
From 2000 to 2001 I was contributing editor at Online Investor. All of my articles were aimed at helping individuals better utilize the enormous resources for the Internet for higher returns. Besides numerous website reviews I wrote one article each issue that helped investors exploit the information available on the Net. The topics included choosing an online broker, researching mutual funds, finding accounting information, and using the SEC's EDGAR database.
For complete text, please download EDGAR.doc (56KB)
EDGAR: Your Best Source for Company Research (2000)
Are you one of the millions of investors who'd rather be caught in a bear trap than read an SEC filing? We don't blame you. The SEC requires public companies to submit dozens of forms describing their operating and financial activities. The millions of documents from thousands of firms are collected online in the SEC's Electronic Data Gathering, Analysis, and Retrieval database (we're tired already). If EDGAR, as it's known, sounds like the name of a persnickety schoolboy, both exasperating and exhausting, well, that's an apt description. Indeed, if you've ever tried to find a specific piece of information in an EDGAR document, you might think MEGO doesn't stand for My Eyes Glaze Over, but rather Mining Edgar Gets Outrageous.
And, really, who needs EDGAR anyway? Mega-data sites like Hoovers do a great job of distilling its terabytes of data into easily digestible formats, like company profiles and tables of key indicators. Legions of analysts, on Wall Street and off, pore over EDGAR documents to find clues about a company's future and stock price. With so many experienced hands scouring EDGAR for you, why bother to learn how to explore it yourself?
SEC filings cover an extraordinary range of territory. They discuss in intricate detail the company's earnings, cash flow, and financial position. They assess the company's legal exposures. They tell you when and at what price insiders are buying and selling the stock. They describe the impact of accounting changes. They disclose the risk factors that face IPOs. They track the company's performance quarter by quarter. They offer biographies of the company's directors.
We'd continue, but we're running out of verbs. In short, EDGAR represents the most extensive, most accessible, least biased, cheapest, and single best source of information on publicly traded companies. Mega-data sites and analyst reports are important resources; but as information intermediaries, they have their inevitable constraints and biases. EDGAR gives you the freedom to access original company documents at no cost, so you can do your own research and make your own investment decisions.
But didn't we just say using EDGAR is a hassle? While EDGAR has traditionally been difficult to use, over the past several months new websites -- and better features at existing sites -- have made searching, retrieving, reading, and manipulating EDGAR files much, much easier. Of course, you're still dealing with a massive database of government documents encrusted with a fair amount of legalese. But using EDGAR successfully doesn't require any great skill or perseverance, just a desire to learn some basic tools.
The SEC's EDGAR site
Let's take a quick look at the EDGAR site itself. The traditional launch point for finding SEC filings is the Search EDGAR Archives page. You type your keywords in the search box, confusingly placed above the title at the top of the page. EDGAR doesn't give you much of a Help section, and there's little explanation of how to do successful searches.
The EDGAR Form Pick is more useful -- if you are searching for an entire filing from a specific company. The form is a little confusing, but just follow these four steps:
a) Select the form type from the dropdown box on top.
b) Type as much of the company name as you know in the box below Enter a company
c) Select the Date Range (ie, when the form was filed)
d) Click Submit Choices.
Among other data, your hits will include the date filed, the form type, and the company name. To open the document, click the [text] link. For documents filed after May 1999, EDGAR also offers filings in HTML. But don't expect beautifully designed pages -- the HTML documents we looked at looked much the same as text documents. Also, remember that full text of SEC documents usually can't be retrieved until a day or two after filing.
EDGAR's Guide to Corporate Filings also deserves mention. It provides a short description of the more common forms. It can help you get a handle on the purpose and nature of most SEC forms. It's not particularly well-organized and the text is somewhat bureaucratic, but it's certainly useful for getting a handle on a particular form type.
No-Cost EDGAR Search Sites with Special Tools
If you retrieve SEC filings from the EDGAR site, you'll quickly discover they're difficult to navigate and use. To begin with, they have no hyperlinks and no index, so you can't jump quickly to different sections. The text is unformatted and doesn't fit snugly in your browser window. The search tools are weak. And wouldn't it be great to be able to download tables directly into Excel to do your own analysis?
Fortunately, several excellent EDGAR search sites pick up where the SEC leaves off. Their attractive design, easy navigation, and powerful tools make EDGAR a pleasure to use (well, almost). As you would expect, each has its particular strengths.
For complete text, please download EDGAR.doc (56KB)
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