5 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 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 positive signal.
• Portfolios with a high average of insider ownership tend to outperform the market over long periods of time.

Partners for profit
After all, billionaires from Bill Gates to Warren Buffett are where they are today by betting on their own companies. And by winning their bet, they've made millionaires out of lots of investors in the process.

So, with the goal of finding real insider-partners to go into business with, here are five 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 a possible five) in our database:

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

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 a huge necessity.

Here comes the sun
It's no secret that Warren Buffett has a penchant for buying up simple, under-the-radar, family-run businesses. Well, those are also some of the fine qualities that have earned Motley Fool Hidden Gems pick Sun Hydraulics a long-held five-star rating in our CAPS community. Only five of the 468 CAPS All-Stars who've rated the stock are bearish.

In 1970, Robert Koski and John Allen co-founded the company to develop screw-in hydraulic valves and manifolds for industrial machinery. Fast-forward 38 years, and Koski continues to serve on the board of directors, while his family maintains a 30% stake in a company that has become the leading innovator in a booming global market.

Take a second to comb through Sun Hydraulics' CAPS page, and you'll find bullish arguments centered on its strong corporate culture, its "BMW"-like reputation in the fluid power industry, and its massive growth prospects driven by global infrastructure investment. Sun derives nearly 60% of its sales from outside the U.S., and it has posted double-digit revenue and profit growth for 20 and 18 consecutive quarters, respectively. Naturally, our community likes the odds that the superstreak will continue.

Of course, Sun competitors Colfax (NYSE:CFX) and Flowserve (NYSE:FLS) are also five-star stocks in CAPS, so there might be other attractive ways to gulp your fluid power. After all, Sun's 36% return since Hidden Gems singled it out last October doesn't exactly make it a steal right now. Nevertheless, the company's high level of insider ownership, coupled with its attractive overseas exposure, should have Fools watching the stock, so they can jump in when there's a pullback.

Now, here's a real inside look at CAPS …
Back in January, CAPS All-Star slbutton showed us the sunny-side of Sun:

This is one of those companies you can buy for the long term and sleep well at night. Founding management has a big stake in the company but has also created a culture such that the company can (and sometimes does) run efficiently without them (their annual letters to shareholders are required reading). The corporate structure is unusual -- no hierarchy, no job titles, no offices -- but it seems to work.

And just last month, CAPS player morgancaps had this to share:

This company has performed extremely well over the years, yet it's still a relatively small company and thus has plenty of room to grow. They have fantastic management that operates the business in a very egalitarian fashion. They continually come out with innovative new products, giving them a "moat."

Now get inside, Fool
Buying a stock means becoming a 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.