Why use a directory database?

The company characteristics below will determine how much information you can expect to find about the company you're researching, and where you should look for that information.  Use directory databases to answer the following questions about your company:

–   Public or private?
–   Parent or subsidiary?
–   US-based or foreign?

Below is more discussion about the implications of the answers to the questions!  Here are the directory databases to start with:

Directory databases:

Private

If the company is privately owned, then your research sources are often more limited.   Just as private citizens do not have to publish their tax returns, neither do private companies.  Therefore, you are limited primarily to:

• News reports in business magazines and newspapers
• Company web sites and press releases
• Directories

Public

If the company is publicly owned (traded on a stock exchange), then you usually have access to lots of information!   Public US companies must file disclosure documents (e.g. 10-K and 10-Q reports) with the SEC, or Securities and Exchange Commission.  These are completely public information sources.  For public companies, you have access to the following sources of information:

• SEC documents (10-K's, annual reports, etc.)
• Financial analysts' reports
• News reports in business magazines and newspapers
• Company web sites and press releases
• Directories

Parent (or headquarters) company

For parent, or independent, companies, the more important question in determining how much information your may find (and where) is whether they are public or private.

Subsidiary ... Division ... Branch ... Unit

If the company is not a parent, this question is most important with regard to public companies: since the SEC requires companies to report or disclose information at the level of the parent company only, not for subsidiaries or divisions, you may not find much information about a specific division (detailed financial data is especially unlikely). Yes, for larger subsidiaries or divisions the parent company often provides some information specifically about them (often in the ARS, or annual report), but they have more discretion in this disclosure.

US companies

For US companies, the more important question in determining how much information you may find (and where) is whether they are public or private.

Foreign companies

For foreign companies, here are a couple of issues you'll have to deal with:

• Language: the company's own documents may or may not be available in English. And there may be far more news about the company in journals and newspapers that are not in English.
• Reporting (disclosure) requirements: other countries have different reporting requirements for their public companies. For some countries, this means a lot less information will be available than for a US company.

ADR foreign companies

This is one type of foreign public company for which you'll find a good deal of information (ADR stands for American Depositary Receipts). These are foreign companies which get traded on US stock exchanges through the intermediary of a bank. By the way, that's the only way for them to get traded on US exchanges! As ADR's, they also have to submit or file financial and other information with the US SEC. The reporting requirements are not exactly the same as for US companies, but pretty close. And the reports will be in English!  The 20-F is the annual report for ADR's that is submitted to the SEC.