7 Top Insider-Owned Stocks

Successful investing is about concentrating on the factors that really count.

For us Fools, few things are more important than finding honest management teams with a whole lot -- their reputations, their careers, and preferably, a boatload of common stock -- riding on the success of the business. Seeking high levels of insider ownership makes particular sense for several reasons:

• Founders and managers who "eat their own cooking" are inherently motivated to act in the best interests of the company,

• Insiders have a better sense of the prospects for their business and industry, so a high ownership stake is often a very positive signal, and

• Portfolios with a high average of insider ownership outperform the market over long periods of time.

Partners for profit
After all, billionaires like Bill Gates and Warren Buffett got where they are today by betting on their own companies. In winning their respective bets, they've made millionaires out of thousands of investors in the process.

So with the goal of finding real insider-partners to go into business with, here are seven top stocks from our Motley Fool CAPS community. In addition to having insider ownership that exceeds 15%, these stocks have received a four- or five-star rating (out of five) in our database:

Company	% Owned by Insiders	Key Shareholder	CAPS Rating
Amkor Technology (:AMKR)	48%	Chairman/CEO	****
Elbit Systems (NASDAQ:ESLT)	45%	Chairman	*****
Alleghany (:Y)	23%	President/CEO	*****
II-VI	18%	Founder/Chairman	*****
Rollins (NYSE:ROL)	59%	Chairman	****
Midland (NASDAQ:MLAN)	38%	President/COO	****
OPNET Technologies	33%	Co-Founder/Chairman/CEO	****

Data from Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS

As always, don't view these stocks as formal recommendations. There are still plenty of risks involved with heavy insider ownership -- like the relative inability of outside, dissident shareholders to spur changes -- so due diligence is very much required.

Defending champion             
I've seen investors get defensive about their stocks before, but stock reaches a whole new level. Elbit Systems, an Israel-based producer of defense products, has been rated a five-star stock by our community for the last six months straight -- and it still hasn't attracted even one bearish player. Let's take a closer look, shall we?

Naturally, as a manufacturer of everything from helicopter systems to combat training simulators to optic sensors, our Foolish CAPS community loves Elbit as a play on increased defense spending -- particularly because of the ongoing war. So far, at least, that affection has certainly been warranted.

Fueled by voracious demand from its largest customers -- the U.S. Government and the Israeli Ministry of Defense -- revenue and free cash flow have grown by an annual average of 23% and 66%, respectively, over the last three years. Even better for shareholders, the stock has returned 145% during that time period, more than reflecting Elbit's blossoming fundamentals.

Analysts are expecting 40% earnings growth next year, and 10% for the next five, so Elbit's business prospects aren't exactly bleak. But for new investors looking to jump in, the stock's run currently has it trading at a PEG of 2.2. Even with the 1.3% yield and Chairman Michael Federmann's 45% stake in the company, it's probably best not to pull the trigger right away. But given a considerable pullback, ESLT could be one investment worth defending.   

What are the CAPS players saying?
CAPS All-Star amassafortune says:

Elbit is an Israeli defense contractor with many NATO contracts. Growth has exceeded that of the S&P average for over three years. Based on new night vision contracts, increased demand for unmanned military devices, and the current 30%+ quarterly earnings growth rate, Elbit should continue to exceed average S&P results.

CAPS All-Star alon2k5 leaves us with an inside scoop:

Elbit management is very aggressive in pursuing new countries/customers. To this end, Elbit cooperates with various big names like Boeing (NYSE: BA  ) , Lockheed Martin (NYSE: LMT  ) and Thales and/or with local companies at the customer's country. In addition, Elbit is growing by a proven and successful acquisition strategy into new business areas.

The financials are available, but what you don't read in the filings is the dedication of management to long term steady growth.

Now get inside, Fool
Buying a stock means becoming part-owner of that business. When the people you've essentially hired to run your company are also owners, the odds of profiting from their decisions increases dramatically. Remember: finding dedicated partners is still the secret to outsized returns.

To learn more about the ideas mentioned above, or to find even more stocks with high insider ownership, join Motley Fool CAPS today. It's 100% free -- an insider's deal if I ever saw one.