Hurricane Dennis has finally dragged its tailpipes over the speed bump of my island home of Key West and has now blown town. All hail the God of Electricity that ties me back to the mainland via the electrons playing bumper cars through this here Internet.

Time to play catch-up
I just read a news alert that tiny research firm Wedbush Morgan initiated coverage on Marine Products Corporation (NYSE:MPX). Add Wedbush Morgan to Raymond James, and we have just two analysts covering this highly profitable small cap that sports near 10% profit margins and greater than 30% sales and income growth.

Where's the rest of Wall Street? They have yet to discover Marine Products. This means small investors can still hook this big fish in a small pond before institutions attempt to crowd us out of our fishing hole. Time is on our side to pick up Marine Products shares while Wall Street is fishing elsewhere.

Know more than the pros
This kind of "stealth" news is truly news to use. As Peter Lynch teaches -- and remember this is the guy who once ran the most successful mutual fund of the 1980s, Fidelity Magellan -- the biggest mutual funds cannot buy into a company with a float as tiny as Marine Products' 13 million shares. Their charters will not allow it. That means you can jump into the typical small-cap winner before the big money on Wall Street can.

Interestingly enough, there is another analyst covering Marine Products, but Yahoo! and other financial sites don't list him. Fool co-founder Tom Gardner initiated a buy on Marine Products in October 2004 for his Motley Fool Hidden Gems newsletter. At the time, the only other analyst covering Marine Products, Raymond James, was downgrading it. Why the contrarian impulse?

The other analyst
Tom saw a management team that owned more than half of the company, was committed to long-term excellence, held no debt on the balance sheet, and was managing the company to a rate of return on assets around 23%. Many institutional investors shy away from family- or insider-owned companies because management is able to act without shareholder approval. But high insider ownership is a Peter Lynch green light. Why? Whenever you see a company with ownership of 30% or more by insiders, you know that it is in the vested interest of the company to deliver shareholder value to their No. 1 shareholders: themselves.

Think small to win big
After Tom wrote about Marine Products, he received a kind note from the company: "Thank you for mentioning us. We rarely attract attention because of our small size and high insider ownership, so I am flattered by your article."

The stock is up almost 30% since Tom recommended it, and the company is now paying a $0.16 annual dividend, yielding 1.18%. Of course, there are risks to holding a small cap such as Marine Products. Volatility is a big one. That 30% return I'm citing was a lot higher back in February when the stock traded for a split-adjusted $20 per share. But that's why when you start thinking small, it's important to do so with a long time horizon.

Stay one step ahead of the Street
You can start investing on your own with confidence in stocks like Marine Products with or without help from Hidden Gems. You can do it. To get started, do some due diligence on these small caps that pass the inside ownership and shareholder rewards tests: Bank of the Ozarks (NASDAQ:OZRK), Coldwater Creek (NASDAQ:CWTR), Green Mountain Coffee (NASDAQ:GMCR), Skechers (NYSE:SKX), TurboChef (NASDAQ:OVEN), and U.S. Lime (NASDAQ:USLM).

Company Market Cap* Insider Ownership ROE Two-Year Return
Bank of the Ozarks $543 31% 23% 74%
Coldwater Creek $1,500 40% 19% 415%
Green Mountain Coffee $254 33% 18% 68%
Skechers $570 39% 9.4% 70%
TurboChef $478 51% 27% 2,280%
U.S. Lime $95 61% 15% 392%
*In millions.

Or let Tom do the due diligence for you and give a 30-day free trial to Motley Fool Hidden Gems a shot. Every month, subscribers discover two great stocks that are too small for Wall Street to follow diligently. To date, Hidden Gems recommendations are delivering 30% average annual returns for subscribers, vs. just 10% from the S&P 500. Click here to learn more.

Richard "DJ Rock" Yates owns no shares of Marine Products; however, he is no stranger to the company's line of excellent Robalo fishing boats, which ply the waters surrounding his island home of Key West. The Motley Fool is investors writing for investors.