Less Is More
The next time you look at an annual report, consider its size, especially if you own shares in the company. Stocks of business services companies with smaller annual reports performed substantially better on average than those with larger reports, says Merrill Lynch.
Analysts at the investment bank reviewed the 10Ks of such companies as Keane, Ciber, Acxiom, and Manpower that were published online at the Securities and Exchange Commission site. Shares of companies whose 10Ks took up less than 300KB of space fell an average 17 percent for the 12 months ended Mar. 31. Shares of companies with reports of more than 300KB fell an average 47 percent. The lengthier reports included many notes, presumably explaining the companies troubles.