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SIC code
Also called: Standard Industrial Classification, SIC, industry code
The four-digit Standard Industrial Classification code the SEC assigns to each registrant to describe its main line of business.
Explanation
The SEC tags every registrant with a SIC code, shown on its EDGAR page, and uses it to route filings to the right review office. Examples: 2834 pharmaceutical preparations, 2836 biological products, 3674 semiconductors, 7372 prepackaged software, 6022 state commercial banks, 6798 real estate investment trusts and 6770 blank checks (SPACs).
The system dates from the 1930s and has been replaced elsewhere by NAICS, but EDGAR still uses it. Codes are assigned from the company’s own description and rarely updated, so a company that has changed its business may carry a stale code.
Why it matters
A SIC code is a quick, free way to find comparable companies, and to spot business models that standard metrics misread, such as banks, insurers and blank-check companies.
How Equity Dictionary measures it
Issuer types are classified from the SIC code first: banks and thrifts (such as 6021, 6022 and 6035), lenders (6111–6198), broker-dealers (6211), insurers (6311–6411), SPACs (6770) and commodity funds (6221) have the factors that do not apply to them marked n/a. The Outlook tab compares a company with up to 12 peers sharing its SIC code, closest in public float, using the screener’s data.
Related terms
- Special purpose acquisition company (SPAC): A shell company that raises money in an IPO, holds it in trust and has a limited time to merge with a private business, taking it public.
- Piotroski F-score: A 0–9 score of financial health built from nine pass/fail tests of profitability, balance-sheet strength and efficiency, comparing the last two fiscal years.
- Altman Z-score: A formula that combines balance-sheet and income ratios to estimate how close a company is to financial distress.
- XBRL: The machine-readable tags SEC filers attach to every number in their financial statements, so software can read financials without parsing documents.
Plain-English summary for research; not legal or investment advice.