This week and next, I’ll briefly discuss a couple of important types of filings required of companies by the Securities and Exchange Commission (SEC). Today, I’ll mention the form 4 filing.

The SEC requires all companies subject to its oversight to report insider trading activity as it occurs. Once an initial statement of ownership is filed by an insider party on an SEC form 3, changes to that initial position are reported on an SEC form 4. Every director or officer of a company must file his or her trading activity with the SEC. Also, any party that owns over ten percent of the shares of a company must file activity in the stock with the SEC.

Trading activity can involve purchases or sales in the open market; or it can involve private transactions; it can also involve stock option activity. Of course, it is a good thing that the SEC requires those that have superior knowledge of the company’s ongoing operations, namely upper level corporate management, to report their trading activity to the external investment community as it often reflects their sentiment toward the current level of the stock price.

One of my screening criteria looks for recent net positive insider transactions. They say that there are many reasons for insiders to sell company stock but there’s only one reason for them to buy.

I really like going to nasdaq.com to view company filings. After going to this site, you simply input a particular stock symbol to gain access to numerous links on the subject company, including a link for a long history of SEC filings, starting with the most recent filing. You can keep a lookout for the latest corporate filings via the nasdaq SEC link, including Form 4 filings.