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Researching Company Weaknesses
Beth Kniss, Insala Consultant
Sourcing "negative" information on a company can be challenging but can yield powerful results. Finding information on a company's competitors, company financial stresses and major lawsuits can counterbalance the positive information portrayed by the website.
» Identifying a Company's Competition
The following are a few tactics, using publicly accessible tools, for identifying a company's competition.
- Hoovers Online
This site, although subscription-based, offered quite a bit of useful information for free. The "Fact Sheet" for each specific company in their database lists the 3 "Top Competitors." If this information isn't listed, typically in the case of smaller or private companies, selecting the options under "Industry Information" (on the Fact Sheet), will bring up a "Most Viewed Companies" list. Generally larger companies will be on this list, but it is a great start and lists up to 10 companies.
- Online Yellow Pages
Targeting companies through online yellow pages directories will yield lists of similar companies - basically competitors. The two directories below can be used to find similar, competing companies.
- Superpages.com - enter the business name, then select the "business profile" link. An "Appears in Categories" section will list business categories in which this particular business appears. Click on the most appropriate category, and a listing appears of other companies in the database which also are in the category - basically competitors.
- Smartpages.com
Not quite as effective as superpages.com, this site doesn't offer the
option of entering a company name, and then selecting a category.
Instead, enter the "Business Type" for the company and a list of
corresponding popular categories appears. Click on the most
appropriate one to receive a listing of companies in that category.
Typically the company you know of, will be listed along with its
competitors.
- SEC Financial Filings -
If the company is public, they are required to file an annual report (form 10K) that contains a section titled "Competition." To access this information, search the SEC's EDGAR database below for a particular company, and source their most recent 10K. Locate the section labeled "Competition."
EDGAR database - http://www.sec.gov/edgar/searchedgar/webusers.htm
» Identifying a Company's Financial Stresses
A public company's falling stock price can be an indicator of financial stresses on the company. The website below offers access a compilation of resources covering a company's stock chart, earnings, financials and analyst recommendations.
» Identifying a Company's Legal Challenges
A public company is required to file information with the SEC regarding any lawsuits against the company. Such information is detailed in the following SEC financial filings:
- Form 10K - Part 1, Item 3 - Legal Proceedings
- Form 10Q - Part 2, Item 1 - Legal Proceedings
A company's 10K and 10Qs can be accessed through the SEC EDGAR database below:
EDGAR database - http://www.sec.gov/edgar/searchedgar/webusers.htm
» Search Engines
By entering targeted keywords into various search engines you can discover whether any lawsuits have been filed against a company. The keyword search string below will source web pages that mention a particular company along with the word "lawsuit." In many cases, this information will be about a lawsuit against the company. Sample keyword search string:
Companyname AND lawsuit
This tactic can effectively be used in the following search engine:
Google - http://www.google.com
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