The Sales+Profit Margins+ROE (SMR) Rating -- part of the IBD SmartSelect® Corporate Ratings (A set of five key stock performance indicators.) -- saves you the arduous task of going over the financial reports of every company and helps you find the best companies in terms of financial performance. The rating looks at a company's sales growth over the last three quarters, its before- and after-tax margins and its return on equity. These four fundamental factors are widely used by analysts.

The SMR Rating ranges from A to E, with "A" being the best and representing the top 20% of all companies. The "B" stocks are in the next 20% and so on. The "E" stocks represent the bottom 20% and the lesser-quality companies. The rating also assigns a greater value to stocks in which any or all of these fundamental factors are accelerating. Look for stocks with ratings of "A" or "B."
 

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Daily Graphs®, a stock chart service that's a sister company of IBD, contains the SMR Rating (abbreviated "SMR Rate") and specific figures on sales and return on equity.

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In IBD's stock tables, companies with top fundamentals are highlighted with a black bar. Stocks are selected weekly through a proprietary formula.

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