Researching SEC Filings

Tracking SEC Filings is a step you can take when researching particular stocks. In particular, if you want to know when large purchases or sales are made by insiders at a company, this is one way to keep tabs on what's going on.

There are many websites to find this information. Below you'll find ones that I have used in the past and found useful myself.

While the main topic of this article is geared towards researching insider purchases and sales, there are many other forms which you can research while checking SEC Filings.

The form researched most frequently to track insider transactions is called SEC Form 4, which is a "Statement of changes of beneficial ownership of securities". You can find out details about each form on the SEC website:

Here are a few of the websites I use, and have used in the past for my own research:

  • SEC Form 4: By far, one of the best sites I have used in the past on this topic. You can search by Company, Insider name, Purchases, Sales, Significant Purchases, Penny Stocks among others. You can also register and set up an Insider Watch to be notified of any new purchases or sales as they are filed on specific companies or Insiders.
  • U.S. Securities and Exchange Commission: Access and download forms that are filed for free here. There is a tutorial on this page with information on how to use the database. Here is a link to the latest filings page:
  • Yahoo Finance SEC Filings You can access Sec Filings through a link in the left column for a particular stock you are researching.
  • Yahoo Finance Insider Transactions You can access Insider Transactions for a particular stock through a link in the left coumn of each stock you are researching.
SEC Filings

If you have a trading plan designed to ride the coat tails of successful insiders, learning to research SEC Filings will be a requirement that you cannot do without.

Even if you don't have this type of trading strategy, checking to make sure there were no large recent insider sales right before you think about buying, might be a good idea.

Keep in mind that not all Insider Purchases are Bullish, and not all Insider Sales are Bearish. There are many reasons an Insider will purchase or sell any particular security.

For example: an insider who receives stock as compensation often receives it in the form of Options at a prior price level. At the time they actually are able to exercise the Option to receive the shares, they may want to sell the shares due to a variety of circumstances such as: they need the money at the time or the share price has increased dramatically from the exercised price making it worthwhile to sell the shares. This doesn't necessarily mean there are problems down the road.

The same can go with some Insider purchases. Some insider purchases may be due to an Insider trying to lower their cost basis as a share price is moving lower. Does this mean something good is coming soon? Not necessarily at all.

As with any type of research, the information can be useful but should not be used by itself in many cases. Combining several methods of research for confirmation of each other may prove to be more beneficial before making any investment decisions.




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