Got the post-Enron jitters? Crave insight into the companies whose stock you hold? Then don’t throw away those snooze-inducing proxy statements. “If you don’t pay attention to these statements, you can get in trouble,” says shareholder activist Nell Minow, whose Corporate Library Web site lists CEOs’ employment contracts. By examining federal filings, Minow says, she and her colleagues saw red flags at Enron in early 2000. Among the questions to ask: Are directors invested? If board members hold little or no stock in the company, perhaps you shouldn’t either. “That’s how we figured Enron would have problems,” Minow says. “They tied for last place in our database of director stock ownership.”      

Who’s on the audit committee? Remember, O. J. Simpson once sat on the audit committee of Infinity Broadcasting. “All the members don’t have to be CPAs, but if they go out of their way to get English professors and ex-football players, they don’t want the numbers scrutinized,” Minow warns.

Who’s got a beef? Anyone holding more than $2,000 worth of stock can submit a shareholder proposal; look for signs of discontent from heavyweight pension-fund investors and others with large stakes in the company. A raft of proposals can indicate a board unwilling to negotiate.

Minow also suggests checking insider transactions. “Who is selling stock? That’s what Wall Street looks at, and you should, too.”

Eric Hirst, an associate professor of accounting at the University of Texas at Austin, adds a cautionary note. “If you’re going to use financial statements to make investing decisions, you need to know how they were generated,” says Hirst. “If we go in thinking these nice laser-printed numbers are all truth and beauty, we’re fooling ourselves.”

Visit the Securities and Exchange Commission’s EDGAR site (www.freeedgar.com) for company financial statements, insider transaction notices, and other info-rich filings.