Stockopedia recently expanded its coverage universe to include the USA. As part of that we produced a complete Guide to Getting Started in US Shares. You can read our introduction to the series here and take a look at the diversification benefits of investing in the US here. America has one of the most open and transparent stock markets in the world but the cultural nuances, unfamiliar terminology, reporting language and filing codes can still make it confusing to UK investors. So let’s have a closer look…
How to track US company reporting
Q) Where can US company reports be found?
The flow of market sensitive information in the UK is mostly handled by the London Stock Exchange via its “RNS” Regulatory News Service. In America, company reports can be found in one place through EDGAR (Electronic Data Gathering of Annual Returns). These are made available to all-comers by the SEC for free - frankly the UK has a lot to learn from the US.
TIP! Since Edgar was fully launched in 1996, the SEC has been pursuing the use of XBRL (an offshoot of XML computing language) as a way of digitising financial statements. XBRL will over time make financial reporting faster, and allow market participants to react more quickly to financial statement releases.
Q) How often do US companies report financial statements?
In the UK, companies are obligated by the Financial Conduct Authority (FCA) to report their financials at least twice a year as annual results and interim results. By contrast, the US Securities and Exchange Commission (SEC) requires corporations to report quarterly - every three months.
There are no fixed rules on when quarters must fall, but most companies have financial years that run from January to December. Quarterly reports are therefore frequently released in batches during ‘earnings season’ which starts roughly two weeks after the end of December, March, June and September.
TIP! Earnings season is a huge event in the US, far bigger than in the UK, and it gets wall-to-wall coverage in the financial media. Company executives can become heroes or villains on the back of their updates. The same goes for Wall Street's army of analysts, who rush to predict and digest the latest filings.
UK investors may already be familiar with quarterly reporting because some British companies produce financial results that meet US standards. Usually, these companies are either dual-listed in…
