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 whole boatload of common stock -- riding on the success of the business. Looking for high levels of insider ownership in particular makes sense for a few 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.

• 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 are where they are today by betting on their own companies. And by winning their bet, they've made millionaires out of thousands of investors in the process.

Conversely, management teams with little or no stake in the company -- aside from huge options packages and obscene salaries -- have an inherent "edge" over smaller shareholders. As Fools are quick to point out, this advantage turns into excessive greed way too often.   

High and inside
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 20%, these stocks have received a four- or five-star rating (out of five) in our database:

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.

The CAPS stock ratings represent the collective wisdom of more than 31,000 community members, so think of it as a great place to begin your stock research. With that said, Greif Inc. looks like something worth peeking inside.  

Good Greif!      
I've been waiting a long time to use that subheading. After noticing the company included in several Foolish columns about stocks that deliver, growth stocks at a discount, and even among the best consumer goods stocks, I thought I'd finally take a closer look to see what all the Greif's about.

Currently, all 114 CAPS players (63 of whom are All-Stars) who have an opinion on Greif are bullish, so that in itself is a pretty impressive fun fact. But, when you consider that this little-known package producer is 27% owned by director Michael Dempsey, has the top market share in most of its packaging products, and has been growing sales and operating profits for the last decade at an average rate of 16% and 23%, respectively, it's understandable why there isn't a single bear in sight.

Greif operates three segments -- industrial packaging, paper packaging, and timber. As you can tell, these aren't exactly the sexiest businesses to be in, but the company's growth prospects are pretty attractive -- particularly for Fools looking for international exposure. Greif has operations in more than 40 countries, serving industries all the way from food and paint, to petroleum and automotive. Results of late have been bolstered by favorable currency translations, so it's clear that our CAPS community loves how Greif is levered to global growth.

The stock's 245% run over the last five years may be some cause for concern, but with an EV/EBITDA under 10 and PEG of 0.74, the price may still be in line with Grief's intrinsic value. A dividend yield of 1.90% doesn't hurt, either. Add the fact that All-Star firm Deutsche Securities recently placed an outperform call out on Greif, and you've got a few reasons to believe this packager will keep delivering the goods.

Here are three CAPS All-Stars with some heartfelt advice on how to deal with Greif:

• Gtrinvestor recommends a holistic, "big picture" mentality: "I like that this company is in a niche industry that relies on packaging for shipping products, which is generally how we get anything in the U.S. anymore. In addition, I think the world is truly becoming more global in regards to trade, so shipping will only increase, and so will the demand for these types of products."

• CAPS All-Star reddingrunner, meanwhile, wants us to use Greif to grow: "Growth at a reasonable price (GARP). Expanding in China and Russia, just the kind of specialty industry to take advantage of global economic development. I'm going to have to see about putting some real money in this one."

• Finally, Joelre81, just yesterday, lets us know that he's dealing with his Greif head-on: "(Greif) makes packaging for almost every product. It also owns some timberlands that could be sold off. The stock hasn't moved in ten years until lately. Management is putting together a growth plan that is under way. The stocks breaking out here, I'm taking the risk!"

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 get the inside scoop on 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.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool has a disclosure policy. First Marblehead is a Motley Fool Hidden Gems newsletter recommendation.