5 Companies Key Business Insiders Love

Business insiders recently unveiled their most admired companies. The corporations topping the list are thought of as leaders in their respective fields. But does the love affair a business insider has with a company inevitably equal a great investment for you and me? 

Best of the best
The Fortune survey solicited executives, directors, and analysts to rate companies on nine criteria. Respondents were asked to select the 10 companies they admired most.

Here are the ones insiders consider the cream of the crop.

Rank

Company

1-Year Stock Return

Motley Fool CAPS Rating (out of 5)

1

Apple (NASDAQ: AAPL  )

(19%)

****

2

Google (NASDAQ: GOOGL  )

40%

****

3

Amazon.com (NASDAQ: AMZN  )

15%

**

4

Coca-Cola (NYSE: KO  )

11%

*****

5

Starbucks (NASDAQ: SBUX  )

15%

****

6

IBM (NYSE: IBM  )

1%

****

7

Southwest Airlines (NYSE: LUV  )

72%

***

8

Berkshire Hathaway
(NYSE: BRK-A  )

34%

*****

9

Walt Disney (NYSE: DIS  )

49%

*****

10

FedEx

12%

****

Sources: Fortune, Yahoo! Finance, The Motley Fool.

Not surprisingly, perched at the top of the list is Apple, a company greatly admired for its status as an innovative leader in digital lifestyle solutions. Even though Apple has received criticism in response to its capital allocation strategies, many business insiders agree that Apple is in an enviable position because of its pristine financials and gobs of balance sheet cash.

Coffee giant Starbucks sits a few notches down on the list. Transforming the way the world experiences coffee, Starbucks still possesses a great deal of international growth potential. And according to CEO Howard Schultz, with its Teavana acquisition, Starbucks "intends to do for tea what it's done for coffee". 

Coca-Cola is continually admired for its blockbuster brand. And though U.S. soda consumption is declining, Coke is successfully reinventing itself into the world's premier beverage (not exclusively soda) company. It comes as no surprise that key insiders admire Berkshire Hathaway, with Warren Buffett widely considered the planet's best-regarded businessman. And Disney probably appears in the top 10 because of the company's diversified stream of revenues and ability to produce seemingly endless billion-dollar movie franchises. Coca-Cola, Berkshire, and Disney are all crowned five stars (out of five) in our Motley Fool CAPS community.

But are these companies good investments?
Whether the companies are worthy of your investment dollars is a story that stock return data will tell. During the past year, only four of these 10 companies outperformed the broad stock market. No. 2 Google, No. 7 Southwest Airlines, No. 8 Berkshire Hathaway, and No. 9 Disney beat the S&P 500's 20% return over that same period.

But when looking at a longer snapshot of time, eight of these 10 companies outperformed the market during the past five years (the exceptions were Southwest Airlines and FedEx). The most noteworthy performers were No. 5 Starbucks, No. 3 Amazon.com, and No. 1 Apple, whose stocks returned 292%, 256%, and 150%, respectively, over the past five years, compared with the S&P 500's 20% return during the same period.

Foolish takeaway
By and large, the companies that insiders believe are admirable really are good investments. Most of them significantly outperformed the S&P 500. But it's important to remember not to take the word of any "experts" as the last word.

Thanks to the savvy of investing legend Warren Buffett, Berkshire Hathaway's book value per share has grown a mind-blowing 586,817% over the past 48 years. But with Buffett aging and Berkshire rapidly evolving, is this insurance conglomerate still a buy today? In The Motley Fool's premium report on the company, Berkshire expert Joe Magyer provides investors with key reasons to buy as well as important risks to watch out for. Click here now for instant access to Joe's take on Berkshire!


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2425089, ~/Articles/ArticleHandler.aspx, 12/19/2014 1:15:50 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement