Posts Tagged ‘SEC Report’

Sunday Special: Learning about a company through lawsuits

November 23, 2008

I’ve talked about using SEC reports, specifically 10-Ks and 10-Qs as guides to understanding a company’s litigation profile.  What kinds of suits?  How big a deal are they?

Today I’m focusing on what this litigation says about the company itself.   Numbers may tell stories about profits and successes and the website and news generally tell you what the company wants you to know  but lawsuits against a company tell you what they DON’T want you to know.

Here are four things to think about when looking at a company’s legal proceedings:

o   Does the company carry litigation costs associated with asbestos claims or other large scale mass tort actions?

 

o   Are they hit with lots of class action claims based on faulty products and/or services?

 

o   Are they subject to lots of suits claiming shoddy or unfair business practices?

 

o   Have they been subjected to significant securities litigation because shareholders are claiming the company knew about material facts that depressed their stock price and failed to disclose them?

Poor Haliburton!

October 23, 2008

From their most recently quarterly filing: (thanks Footnoted.org!)

“Forecasted crude oil prices for the remainder of 2008 and for 2009 have dropped substantially in the last month…Any prolonged reduction in oil and natural gas prices will depress the immediate levels of exploration, development, and production activity. Perceptions of longer-term lower oil and natural gas prices by oil and gas companies can similarly reduce or defer major expenditures given the long-term nature of many large-scale development projects. Lower levels of activity result in a corresponding decline in the demand for our oil and natural gas well services and products, which could have a material adverse effect on our revenue and profitability.”