In mid-2009, Morningstar introduced what it calls "moat trend ratings." Moat trend ratings can be either positive or negative. A positive moat trend indicates that a company's competitive position in strengthening. Conversely, a negative moat trend indicates that it is weakening. These moat trends have been an excellent indicator of stock performance.

In the video below, Fool contributor Daniel Sparks discusses the importance of these ratings and he suggests one way investors can identify positive and negative moat trends. To illustrate, Daniel takes a look at Apple (NASDAQ:AAPL), Whole Foods (NASDAQ:WFM), and Nokia (NYSE:NOK).

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Apple, Costco Wholesale, and Whole Foods Market. The Motley Fool owns shares of Apple, Costco Wholesale, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.