Investor's Corner: Charts Packed With Ratings, Key Details

What do all those figures and codes mean? What's most relevant for stock selection?

Here's a brief guide to these mini-charts, which are found not just in the IBD 100 but also in Your Weekly Review (on Fridays) and the Big Cap 20 (on Tuesdays).

At the top, the term "Grp" with a number next to it (point 1) tells you where the stock's industry group ranks in IBD's 197 group rankings. The leading industries are generally in the top 40 or 50.

The number of shares outstanding is shown nearby, with the letter M to tell you the figure is rounded to the nearest million (point 2). This number is not so relevant. What is much more important is the average daily volume, which you'd find next to "Avg. D. Vol." (point 3) Institutional-quality stocks tend to trade 200,000 to 300,000 shares a day or more.

IBD's Earnings Per Share, Relative Price Strength and Composite Ratings are abbreviated as EPS, RS and Comp.

In general, leading stocks have ratings above 85, though the Composite Rating for leaders is usually higher.

The debt figure is expressed as a percentage of shareholder equity (point 4). Lower is better, although in some industries, such as telecom, a high amount of debt is normal.

Quarterly earnings data are crucial. The percentage increase or decrease in earnings per share for the most recent quarter is given as "Last Qtr EPS." (point 5) Look for at least a 25% increase. "Prior Qtr" is the result for the second-to-last quarter. It's best when that number is also 25% or higher.

"Last Qtr Sales" tells you the percentage change in sales for the most recent period. Most leading stocks come in with 25% or better growth in this category.

Below the quarterly data is a line that goes something like "5 Qtrs EPS >15%." This is shorthand for saying the company's earnings per share grew at least 15% for each of the past five quarters. The more quarters that a company makes this benchmark, the better its chances of being a winning stock.

Most charts include a line about "EPS Due." (point 6) That's when the company either has confirmed when it will report its next quarterly results or the best estimate of when that will happen.

This is a time for shareholders to buckle up, because stocks often move sharply depending on how the latest numbers come in.

At the bottom of each chart is the most important piece of information (point 7).

IBD market writers analyze each chart and summarize the most relevant action. Stocks said to be extended more than 5% from a buy point 18e in risky price areas. It's better to focus on stocks closer to their buy points.

If a quality stock is near a buy point, it gets a heavy black border. That's IBD's way of telling readers that the stock has many traits of leadership and may be at an opportune time to buy.