In the majority of cases, a public company financial filing is a financial statement that is filed with the United States Securities & Exchange Commission (SEC) from a company who has shares that trade on a public exchange. However, there are circumstances where other firms must also file with the SEC. This can include private companies as well as foreign firms. There are a number of important implications for investors as they analyze companies and look to gain an edge in their research process. (For more, see Policing The Securities Market: An Overview Of The SEC.)
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Why SEC Information Exists
There are a number of instances where a private firm must file with the SEC. As of 2010, firms that have more than $10 million in assets and more than 500 shareholders are required to file. Overall, any firm that sells securities to the public is required to disclose quarterly and annual financial statements. This usually refers to equity but also covers securities that are considered to be hybrid because they contain equity and debt features. In regard to foreign firms, those that registered securities in the U.S. are required to file financial statements with the SEC. (For more information revealed by the SEC, read SEC Filings: Forms You Need To Know.)

Why the Data is Important to Investors
Private and foreign company information can be extremely useful for a wide array of reasons. The key reasons are detailed further in the sections below, but essentially, it lets an investor learn important information about a firm's industry, the firm itself (including its industry positioning) and how it affects the overall industry. This is information that can go unnoticed by most investors. As such, it can provide an investment edge when looking for profitable investment opportunities. Finally, there are many instances when private firms go public and this can give investors unique insight well before the firm releases its initial public offering (IPO). (To learn more, see our IPO Basics Tutorial.)

Private Companies are Worth Knowing
When researching public companies, it's easy to forget that private ones consist of important players that are leaders in their respective industry. Certain firms are industry bellwethers that deserve close attention. Each year, financial publications including Forbes publish lists of the largest private companies in the U.S. and the world. The most recent Forbes list has Cargill, Koch Industries, Bechtel and HCA as the four largest private firms in the U.S.

Learning more about these firms lends insight into the farm products, chemicals, heavy construction and hospital industries. Both Cargill and Koch count as industry bellwethers, as they log more than $100 billion in annual sales. The other two companies posted revenues just over $30 billion, which qualifies them as important industry players.

Proving that the investigation of public filings for private firms can be hit-or-miss, only HCA files quarterly and annual statements with the SEC. However, other firms on the list, including supermarket chain Publix and Toys "R" Us, file public financial statements and results. In the case of HCA, this stems from a number of trips between public and private company status given a couple of private equity buyouts in recent years and allows for looking at its business and financial trends. Toys "R" Us was also a public company taken private. Knowing these financials exist can provide an investor an edge over other analysts and individuals in the investment field. (Many SEC filings are intimidating in length, but you can learn to filter out the filler and hone in on pertinent information. To learn more, read Speed Read SEC Filings For Hot Stock Picks.)

Competitive Analysis via Private Firms
As alluded to above, finding unique insight on private rivals can be extremely valuable for gaining an understanding of the competitive landscape for an industry or group of leading industry players. The same goes for looking at a public firm and comparing it to archrivals that include other public companies, yet also private ones. As an example, Zimmer Holdings, Stryker and Smith & Nephew are three leading orthopedic makers that are publicly traded. But investors tend to leave Biomet, which files SEC statements, off the list.

A review of Biomet's most recent annual filing leads an investor to discover that Biomet is the fourth-largest orthopedic maker and serves 60% of the hospitals that perform joint replacement surgeries. Investors that took Biomet private include ones that also took HCA from the public realm. Other important details include descriptions of Biomet's product line and sales mix across the globe, all of which are needed to gain an understanding of the industry landscape. Also, an understanding of Biomet can help an investor discern if Zimmer or Stryker are likely to be appealing stock investments.

Insight When a Private Company Goes Public
Investors that track the private equity industry are well aware that public companies that are taken private are likely to be taken public again at some point. The minute a private equity firm consummates a buyout deal, it starts thinking of a liquidity event in the future to turn a profit on its investment and for its partners. This has occurred with HCA once already and is may happen again as the company looks to return to being publicly traded. Burger King was taken private a second time, as was drug marketing research firm IMS Health. With these firms, historical annual and quarterly reports are available from when the firms were public and many continue to be file public SEC statements while private. (Companies use mergers, acquisitions and spinoffs to rekindle investors' interests. Learn how to benefit from a company's M & A, read Cashing In On Corporate Restructuring.)

The Usefulness of Foreign Company Information
An example of a security that a foreign firm issues on a U.S. exchange is an American Depositary Receipt, or ADR for short. The most useful foreign firm filing is called a form 20-F. This form provided a reconciliation of filings made in a firm's home country with U.S. accounting standards as prescribed by Generally Accepted Accounting Principles (GAAP). This reconciliation is extremely useful as it makes for an apples-to-apples comparison with other U.S.-based firms and rivals. It also provides additional company insight that can be easier to understand for U.S-based investors. Foreign firms may also choose to file 10-K annual statements, which is more stringent. Though rare, it can be extremely useful, as the filing is in full compliance with GAAP and other matters that U.S. investors should be familiar with.

An example of this type of foreign information can be found through the data that is now available for Anheuser-Busch InBev. Anheuser-Busch was a U.S.-based company but was acquired by Belgium beer giant InBev. The firm dropped its U.S. security for a time but recently returned under the "BUD" ticker that Anheuser-Busch originally had. The firm now issues the form 20-F whose contents have become an important way for investors to track company and overall industry developments.

How to Find this Information
As you are probably now aware, SEC filings are the best places to utilize the above information. Many of these filings can be found at the website at The 10-K is a useful form that is filed annually while 10-Q statements are filed quarterly. In addition, most company websites provide this information or at the least will link you to their information from the SEC. Private equity news flow is also a good place to look for private companies, and general searches on foreign firms can also be productive.

The Bottom Line
This information can be extremely useful for investors interested in bottoms-up and fundamental research. Another key benefit is it's less likely to be uncovered by most investors. In particular, it can give you a leg up on other investors when a private company goes back to being public.

More insightful analysis is possible in the case of foreign firms, as is the enhanced ability to obtain apples-to-apples comparisons with domestic firms. And as a final aside, even if SEC filings aren't available for many private or foreign companies, there are many resources that track their financial developments and operational results. (To learn more about the SEC's history and purpose, read The SEC: A Brief History Of Regulation.)

At the time of writing Ryan C. Fuhrmann owned shares of Zimmer Holdings but did not own shares in any of the other companies mentioned in this article.