By
Ilan Moscovitz (TMF Diogenes)
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More Articles
June 11, 2008
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At The Motley Fool, we like companies with a high level of insider ownership. We believe that leaders with large ownership stakes in their companies will have a greater incentive to do what's best for the business. The record appears to bear this theory out, since such companies tend to outperform.
Compare the performance of Garmin (Nasdaq: GRMN ) (41% insider-owned) to that of golden-parachute-burdened Home Depot (NYSE: HD ) (1% insider-owned). One has been a double over the past five years, while the other has done ... not so well. I’ll let you guess which is which.
With all of this in mind, I used our new CAPS screening tool to look for companies with high insider ownership. Below, you'll find five companies whose insiders hold at least 20% of shares.
They also have:
- Market caps greater than $150 million.
- Five-star ratings, the highest possible, from our CAPS community.
Remember, in the first year for which we have data, five-star companies outperformed with an average return of nearly 28%.
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Company
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Share Price
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Sector
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Market Cap
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Fuel Tech (Nasdaq: FTEK )
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$24.13
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Industrial Goods
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$542 million
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IPG Photonics (Nasdaq: IPGP )
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$18.41
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Technology
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$815 million
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Navios Maritime (NYSE: NM )
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$10.28
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Services
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$1.1 billion
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Steel Dynamics (Nasdaq: STLD )
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$37.77
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Basic Materials
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$7.1 billion
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ShengaTech (Nasdaq: SDTH )
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$7.74
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Basic Materials
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$419 million
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Data from Motley Fool CAPS and Yahoo! Finance as of June 10.
Of course, this screen is only a starting point in the research process. Come and join us on Motley Fool CAPS to dig into these companies further. Let our 105,000-strong (and counting) CAPS community help you make better stock selections.
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