Successful investing requires 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. 

High levels of insider ownership make sense:

  • Founders and managers who "eat their own cooking" are inherently motivated to act in the best interests of the company.
  • Insiders have a strong 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 those bets, they've turned thousands of investors into millionaires.

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:


% Owned by Insiders

Key Shareholder   

CAPS Rating

Heartland Payment Systems (NYSE:HPY)




Global Industries (NASDAQ:GLBL)




Weyco Group (NASDAQ:WEYS)




Kinetic Concepts (NYSE:KCI)




Oakley (NYSE:OO)








American Financial Group (NYSE:AFG)




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

As always, do not view these stocks as formal recommendations. Plenty of risks can be involved with heavy insider ownership -- like the relative inability of outside, dissident shareholders to spur changes -- so due diligence is very much required.

Take it to Heartland
Our CAPS community does an awesome job identifying businesses that are benefiting from huge consumer trends. Heartland Payment Systems is America's sixth-largest processor of electronic payments -- facilitating info from merchants, via MasterCard (NYSE:MA) or Visa, to financial institutions. It's one of CAPS' favorite plays on the shift to credit card use. When you throw in the fact that founder and CEO Robert Carr continues to own more than one-quarter of the company, it's easy to get excited over those electronic tailwinds.

Of course, Heartland was formally recommended by our Motley Fool Hidden Gems small-cap service back in August's issue, so that support might be a tad Foolishly skewed. Still, the stock's 17% return since being selected -- not to mention all of Heartland's other bullish qualities -- say quite a bit on their own.    

Check out Heartland's CAPS page, and you'll find several pitches focusing on its strong management, massive growth prospects, and exceptional financials. Over the last couple of years, Heartland has grown revenues and net income at an annual 28% and 50% clip, respectively, all while delivering returns on equity in the mid-20% range.  

Analysts are expecting 26% earnings growth over the next five years, which means HPY currently trades at a PEG of 1.23. Although the stock isn't exactly a no-brainer bargain, I'd say that's a pretty fair price for such a high-quality, cash-generating, insider-owned company. At the very least, it's one to keep on the watch list.     

Now, here's a real inside look at CAPS ...

CAPS player FOOLBEFREE makes this heartfelt pitch:

This merchant credit card services company should grow because:

1. More people are using credit cards instead of cash and checks.

2. Retail sales will rise faster in 2008 [and 2009] when [the] US economy should grow faster.

3. [Heartland] should take market share from competitors by offering better prices and services. Competitors have higher overhead expenses.

CAPS All-Star forbes10 adds it all up for us:

Cashless world = multi-bagger
Great management = outperformance rating

Now get inside, Fool
Buying a stock means becoming a part-owner of that business. When the people you've 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 D. Pacampara owns no position in any of the companies mentioned. The Fool has a disclosure policy.