And what a year it was. The total number of (public) documents filed with the SEC crept inexorably upward, by a modest 4.4% to 659,210 from 631,200 last year. That’s a lot — an increase of more than 28,000 filings — but still well below the peak of 750,200 in 2007.

As was the case in 2010, about a third of last year’s filings were insider-transaction filings: Forms 3, 4, 5 and the like. Of the rest, nearly one in six was a Form 8-K, those catch-all filings that can mean anything from press-release puffery to the disclosure of impending criminal charges.

And if you’ve ever heard us wax on about the Friday night dump — the tendency of companies to try to bury bad news during the 90 minutes after market close that the SEC continues to take filings — last year’s stats show it’s a very real phenomenon. Fully 6,259 of the 8-Ks filed in 2011, or some 8% of the total, came after 4 p.m. on Fridays. And that doesn’t count the day before Thanksgiving or any Thursdays before Friday holidays, or the stragglers that miss the deadline and show up first thing Monday morning.

In addition to an overview, we also had the good folks at MDR dig up the outliers for us: the biggest, ugliest, filings, and the companies that just can’t stop themselves from filing again and again.

The 2011 Heftiest 10-K Award goes to Realogy Corp., a closely held real-estate brokerage (subsidiaries include Century 21, Coldwell Banker and other familiar names) that was taken private by Apollo Management in 2007 but still has plenty of public debt. It won with a beauty of a 10-K filed on March 4, 2011, that weighed in at 2,229 pages and included no less than 31 exhibits. (Plus, it’s worth noting, the company filed a 10-K/A amendment later in the month, with another 66 pages.)

But Realogy’s opus is dwarfed by the 10-Q filed on February 8, 2011, by aluminum-can maker Novelis Inc., another closely held company (taken private in 2007 by the Mumbai-based Aditya Birla Group). Its masterpiece clocked in at 4,543 pages — and managed to do so with just 11 exhibits.

By contrast, the biggest 8-K was a pipsqueak, if a home-grown pipsqueak, filed November 18, 2011, by venerable pineapple-marketer Dole Food (DOLE), shortly after it acquired SunnyRidge Farm. At a mere 2,683 pages, the document and its exhibits disclosed details of the company’s credit agreements, as well as a couple stock and long-term incentive plans for executives.

Clearly, “biggest” doesn’t always mean “most exciting.”

As last year, the most prolific filers of 2011 were generally financial companies — after all, they have to file all kinds of documents about their products and investments as well as their own issuances.

This year, the repeat offenders were based outside the U.S.: Barclays Bank (BCS) took the brass ring with 2,885 individual filings — that’s nearly eight for every day of they year, including weekends and holidays — followed closely by UBS (UBS), at 2,812 filings, and then BlackRock (BLK) at 2,669. JPMorgan Chase (JPM) (with 2,096) and Morgan Stanley (MS)  (with 1,764) rounded out the top five.

And then there’s the stat we pay closest attention to here at footnoted: the busiest days of the year, when public companies keep Edgar’s virtual gears spinning most furiously. Last year, unsurprisingly, February and March once again took most of the top spots — right where 10-K season and proxy season start to merge. The busiest day of all was Valentine’s Day (awwww…), with 9,982 individual love-notes to investors, followed by November 14 (with 7,398), March 1 (with 6,612), February 28 (with 6,300) and February 11 (with 6,130).

Our slogan notwithstanding (“We read the filings so you don’t have to”), we didn’t actually read every word of all 659,210 filings last year. Instead, we zeroed in on the most interesting ones using the search capabilities of MDR, matching language in the filing with dozens of proprietary search terms.

We at least skimmed those filings, and in many cases read them closely. And in the process, we racked up some pretty impressive stats of our own — stats that we think underscore the signal-to-noise ratio in public disclosures, and (not coincidentally) the value of the services we offer over at footnotedPro.

During the year, we reviewed 31,591 alerts triggered by filings that matched one or more of our search strings (each filing can trigger more than one alert), an average of more than 600 a week. From that fire-hose, we identified nearly 4,900 filings worth recording in our database, many of which we deemed significant enough to send to paying subscribers. (A relatively small number were useful only for blog posts, or were recorded as part of our ongoing R&D efforts.)

The very best of the lot — the most significant, most actionable material we found — was distilled down into the 56 footnotedPro reports we published last year. Those reports covered more than 160 unique tickers — and included early alerts for subscribers on four acquisitions and a warning about AMR’s bankruptcy, among other tidbits.

Oh, and the blog that started it all? Here on footnoted.com, we published 268 posts in 2011, up to and including the winner of the year’s worst footnote contest, Hewlett-Packard (HPQ), for the remarkably generous severance package it gave to Léo Apotheker after his short and less than distinguished stint as CEO.

So much for 2011. We’re already deep into 2012, and we’ll let you (and our footnotedPro subscribers) know what we find.

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Corporate disclosures aren’t all about numbers. At footnotedPro, we highlight unusual opportunities and potential problems well in advance of the market, based on what’s buried in the footnotes and text of SEC filings. To find out what you’re missing in SEC filings, and to inquire about a trial subscription, email Todd Serpico.

Every day that the SEC is open, the folks here at footnoted trawl through Edgar (well, actually 10KWizard, which is now known as Morningstar Document Research) to find the nuggets, pearls, giant stinking piles of poop, and, yes, some rare diamonds, that publicly traded companies pass off as their public disclosures to investors both large and small.

We do it for each of you, of course, our loyal readers, many of whom have been reading the site since the very beginning, when it was just me and the late-great brain, Kumara, steadily rowing the boat across the River Styx.

Following Morningstar’s acquisition of footnoted in Feb. 2010, we were able to build a small team, who join me day in and day out on this mission to help dig through the mud that often passes as corporate disclosure.

We all work in different places and only really get together a few times a year at Morningstar’s offices in Chicago. The rest of the time, we live on IM, email, texting and the cloud to communicate with one another about our latest finds. So the four children pictured above — Soren, Max, Ian and Aliyah — have never actually met one another. Chalk the picture up to the talents of Mr. footnoted, aka my husband, Scott Cooper, an animator/storyboard artist who’s also a black belt in Photoshop.

Hopefully, by the time our children are ready to start investing on their own, they won’t have to dig through a 1,000 page 10-K to find out what’s really going on. Or, perhaps even know what the words “tax gross up” actually means. That’s our collective holiday wish!

Happy holidays!

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Don’t forget to vote for the worst footnote of 2011! The winner will be announced next Friday, Dec. 30.

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Over on  footnotedPro, we’re preparing for tonight’s pre-Christmas Friday night dump. With most people already out the door for the holidays, we’re expecting some interesting disclosures later today. For more information or to inquire about a trial subscription, please contact Todd Serpico.
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When I started footnoted eight years ago, the idea was simple: to start a daily conversation that built upon some of the concepts that I covered in my book, Financial Fineprint. Because I came from a daily journalism background, where new things constantly percolated to the top, the idea of putting something out there like a book and not being able to update it regularly when things changed, seemed a bit odd. Luckily, this coincided with the release of tools like Blogger, and later, WordPress and Twitter, that were designed to let people with interesting ideas, but no coding experience, get those ideas out there.

When I started the site eight years ago, I had no idea that I’d still be at it eight years later. Or, that eventually, a company like Morningstar (MORN) would find what I was doing interesting enough to invest money in the site and give me the opportunity to continue growing it. Last month, for example, we launched a footnoted portfolio within Morningstar to more fully test out some of our ideas that we’ve picked up from eight years of reading filings.

With the addition of Theo Francis and Sonya Hubbard, not to mention some talented interns, including our current intern, Andy Cheng, we’ve been able to read a lot more filings. And while some of our more actionable content — like our list of our Top 10 M&A picks — is behind the wall at footnotedPro, we remain committed to providing ordinary investors with a daily dose of the crazy things we routinely find buried in the fine print.

Of course, none of this would be possible without you — our readers. Whether you’re a footnoted regular or relatively new to the site, we’re glad to have you here and hope that you continue to find our content interesting. As always, any ideas for improvements (not to mention any tips on filings to read) are always welcome. You can send them to me directly here.

Image source: City the NZ Cupcake Queen via Flickr

On Friday night, around the time that Kumara and I would normally be busily digging through the Friday night dump, my husband, Scott, and I, with the help of our vet, Wendy Westrom, put Kumara to sleep at his home for the past 11 years, otherwise known as footnoted World Headquarters.

Anyone who has ever loved a dog (or cat, or really any other animal) as much as we loved Kumara, knows how hard this can be. But over the past 10 days, we had watched as an 11 year-old dog who loved to hike and swim and especially, to eat, quickly turn into a shell of himself and both Scott and I knew it would be unfair to let him continue to suffer.

Kumara had stopped eating a week ago Wednesday when I was on a regular visit to Morningstar’s offices in Chicago. At first, Scott and I thought it was due to the unusually hot weather we had in New York on July 20 and 21, when temperatures reached over 100. But when his appetite didn’t improve, even as the temperature outside slowly declined, we became very concerned. Given that Kumara’s tummy clock was finely tuned — he would often walk over to the freezer at five minutes to noon to demand his lunchtime chicken foot snack — we always knew that if he ever stopped eating, it would be a very bad sign.

During the 10 days leading up to Friday, we took Kumara to several vets, eventually ending up at the new Cornell University Veterinary Specialists in Stamford. That was last Monday. On Thursday evening, Dr. Marnin Forman called to tell us that preliminary biopsy results had come back and that they didn’t look good. The impression slides showed undifferentiated carcinoma in his liver. Dr. Forman explained to us that Kumara’s liver was failing and was not responding to any drugs. On Friday morning, after paying Cornell a whopping $6,800 for four days of care, we took Kumara home, instead of putting him to sleep there.

This past weekend has been full of lots of second-guessing: did we miss early signs of a problem? Did one of our vets? Should we have been feeding him something different? Was it related to him swimming regularly in the Hudson River, so close to Indian Point? Did it have anything to do with the Rimadyl we gave him after his two earlier surgeries for his cruciate ligament? And that’s just a sampling of the grief-driven gerbils that have been going through our heads!

The bottom line is that we’ll never really know, just as we rarely ever know the exact cause of cancer in most of us. What I do know is that there’s an empty space in our hearts that’s likely to be there for a very long time.

For those of you who have pets at home, give them an extra cuddle (or Kumara’s favorite, a belly rub) sometime today. And, if any readers of footnoted really want to honor Kumara’s memory, a donation to New York Pet Rescue, or any other animal charity of your choosing, would be an even nicer gesture.

Reading the filings on Friday night — or really any other time — is going to be a lot less fun now that Kumara is no longer at my side.

Let’s just say that Sonya, Theo and I are in good company when it comes to reading the filings. Unlike Buffett, we actually know how to operate our printers (see pg. 8 in this transcript for the reference) though if we were to actually print out copies of everything that we read, we’d have to form some joint-venture with the Arbor Day Foundation.

During the lengthy Q&A over l’Affaire Sokol, Buffett made two comments about reading SEC filings (for full and extensive coverage of the meeting, be sure to visit this page on Morningstar.com), both of which were music to our respective ears. Here’s the first snip:

And the 10K and the 10Q that got printed out on Saturday have that date on them, the 15th, when I looked at Lubrizol for the first time.You might be interested in knowing I’ve been looking up 10Ks and 10Qs for 20 or 30 years, but I don’t know how to print them out.

But it was this comment — it’s on page 15 of the transcript — that really warmed our hearts:

The most interesting part of every proxy statement is something that says — it’s basically the history of the transaction, and it’s — it’s the first thing I read on any deal because it gives you a blow-by-blow of what has taken place.

Needless to say, that’s one of the first sections we read whenever we come across a merger proxy! Here’s an early one that we footnoted all the way back in 2006. That prompted our good friend Broc Romanek to tweet that footnoted and Buffett were probably the only two people in the world that actually read these things, which Broc said “is not a shabby book club”. Indeed.

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Last week’s news that Lawson Software (LWSN) is being acquired in a $2 billion deal brings our M&A batting average up to .300: On Jan. 14, we gave FootnotedPro subscribers a list of 10 M&A picks and Lawson was one of them, along with Smurfit-Stone Container (SSCC) and Pride International (PDE), which announced deals earlier this year. You can find out more about FootnotedPro here. FootnotedPro: Interesting. Actionable. Profitable.

For this morning’s main post, on tool-making giant Stanley Black & Decker (SWK), please see the next item.

As regular readers know, two of the companies we named to our Top 10 list of M&A targets for 2011 have already announced deals. Now it looks like a third may follow suit: Lawson Software (LWSN), which said on Friday that it was considering a takeover bid at $11.25 a share from Infor Global Solutions and Golden Gate Capital.

DealBook pegs the offer, which works out to $1.8 billion, at a 2.5% discount from Friday’s close, after the stock jumped last week in response to news that Lawson had hired an outside adviser and was considering its strategic options. But the stock is up this morning to around $12.24 in what StreetAccount.com is attributing to speculation that Oracle (ORCL) might come in at as much as $15 a share.

The offer may be a discount to Friday’s price, but on January 14, the day we published our M&A report, the stock closed at $9.34. That means a deal at even $11.25 a share would be a 20% premium for anyone who had bought at the time, and $15 (if it were to materialize) would ring up a whopping 61% gain.

We’ll see what happens. In the meantime, to get more information about FootnotedPro, you can request a copy of our M&A report or inquire about  sample reports or a trial subscription.

]]> http://www.footnoted.com/urge-to-merge/will-lawson-software-give-us-a-triple/feed/ 0 http://www.footnoted.com/urge-to-merge/and-then-there-were-eight/ http://www.footnoted.com/urge-to-merge/and-then-there-were-eight/#comments Mon, 07 Feb 2011 16:04:33 +0000 Theo Francis http://www.footnoted.com/?p=5769 We’ve got a post this morning on stock compensation at Krispy Kreme for you (below), but first this: Another of the companies on our list of top targets for M&A activity in 2011 is being acquired. Pride International (PDE) said this morning that it plans to be acquired by Ensco PLC (ESV) in a cash-and-stock deal at $41.60 a share.

For those keeping score at home, that’s $7.62 (or 22%) higher than the stock’s close on January 14, when we published our M&A report (and PDE was trading at $33.98). Pride’s shares have been trading at a little over $40 this morning, up more than 18% from January 14. You can see the full report on our 2011 M&A picks if you’re a FootnotedPro subscriber, or you can request a copy if you’re not.

In any case, with Smurfit-Stone Container (SSCC), two of our Top 10 picks for 2011 now appear to be heading to a deal. Not bad for the second week of February.

Smurfit-Stone Container (SSCC) said this morning it will be bought by Rock-Tenn (RKT) for $3.5 billion to create a cardboard- and paper-container company that Bloomberg News calls second only to International Paper (IP). The company’s shares are trading around $35.40, up 27% from Jan. 14, when we first published our top 10.

In our report, we noted that Smurfit-Stone, which had emerged from bankruptcy reorganization over the summer, lost its chief operating officer, Steven Klinger, just months after signing a new employment agreement with him. This despite having all but promised to make him the next president and chief executive. Moreover, Klinger was sticking around as a consultant through March 31 this year, with favorable equity-award treatment should a change-of-control occur in a relatively narrow window.

Given these and other signals, we said, “it’s possible that negotiations for a sale are occurring.” Looks like we were right.

You can still get a copy of our Top 10 Top Nine for 2011 by filling out this short online form. But we’re only able to send the report to people with institutional or educational email addresses (so please don’t send in requests from your gmail, aol, hotmail, yahoo, etc.. accounts). The other companies range from around $390 million to $6 billion in market-cap, in telecom, health-care, energy and other sectors.

Enjoy.

Of course, we’re hardly the only ones engaging in this guessing game. There are literally countless websites that focus on M&A speculation, many of which we read regularly. But we’re pretty sure that our institutional level subscription service, FootnotedPro, is one of the only ones out there that uses our deep understanding of SEC filings and how they work, to make our calls.

Last week, we put out a report with our top 10 M&A picks for 2011 based on our research. For the past week, it’s only been available to subscribers of FootnotedPro. Now, we’ve decided to make it available to our readers. Just fill out this form (and be sure to include a valid email address from either a corporate or university domain) and we’ll send you a copy.

FootnotedPro: Interesting. Actionable. Profitable.

But the news shouldn’t come as much of a surprise to FootnotedPro subscribers. Indeed, we put out a report back on March 19, 2009 that suggested that J0-Ann Stores was a likely takeover target. At the time, the stock was trading at just over $14 a share.

Granted, it took a lot longer for the deal to materialize than we initially expected. Still, we’re guessing that few people would pass at the opportunity to have a stock in their portfolio increase three-fold in less than two years.

For more information on FootnotedPro, you can contact us here or call us here: 866-603-4565.

Image source: Metro Group Architects