Fossil, the watch and accessories retailer/wholesaler delivered huge numbers in the first quarter. According to company CFO Mike Kovar, the rest of 2010 will be equally impressive. This shouldn't come as a surprise. Fossil's been kicking it for some time now. All you have to do is look at the stock's performance in the last five years. What's the key to its success?

There are all sorts of reasons but the one thing that stands out is the Kartsotis brothers. Tom founded it in 1984 and his older brother Kosta is the current CEO. By doing a good job at the top, they've enriched shareholders and themselves to the tune of 15.9% total returns annually over the last five years and 24.8% year-to-date, achieving a double play. It's true that, more often than not, high insider ownership equals excellent shareholder returns -and these guys maintain a significant ownership position in the company. We'll look at four other companies currently turning the trick.

IN PICTURES: 10 Biggest Losers In Finance

High Insider Ownership = High Shareholder Returns

Company 5-Year Return YTD Return
Buckle (NYSE:BKE) 22.4% 22.8%
WWE (NYSE:WWE) 17.3% 15.1%
Nike (NYSE:NKE) 15.7% 16.1%
Fossil (Nasdaq:FOSL) 15.9% 24.8%
Cohen & Steers (NYSE:CNS) 11.2% 14.0%

The Wrestling Takedown
Who knew wrestling impresario Vince McMahon had this much staying power - or the chops to run a major sports business and do a good job. This is one solid company with loads of cash to payout 175% of its earnings in the form of dividends. Its 8.48% yield is one of the highest in the consumer goods sector and virtually debt-free. Most impressive is McMahon's compensation. He receives no stock awards or bonuses and just under $900,000 in annual salary. He's apparently satisfied with his 59% economic interest and 86% voting interest. Vince isn't going anywhere and that's a good thing for shareholders.

Buckle Up
I've written several articles about the Nebraska-based specialty retailer. The reasons I like them are countless. The company understands retail, is willing to take its time expanding across the country and does a great job getting its buying right. It's a good thing they're good at what they do because competitors like Aeropostale (NYSE:ARO) and Urban Outfitters (Nasdaq:URBN) aren't about to step aside and relinquish their market share. This is a full-on street fight. Only the strong and smart will survive. Small-cap money manager Chuck Royce has owned the stock since 2001 and eight of his funds hold 14.5% of the outstanding shares, second only to Chairman Dan Hirschfeld, who owns 36%. In case you were wondering, he receives little if any compensation for his Chairmanship.

Tiger's Beat
He came and went. Tiger Woods was back on the PGA Tour and then he hurt his neck at The Players Championship. He will likely be out for some time, possibly the remainder of the golf season. Nike, however, won't skip a beat. It's ready to take on Adidas in its own backyard in Europe as well as in Asia and Africa using soccer brand Umbro as its calling card. With plans to grow revenues to $27 billion by 2015, Nike will look to grow its non-Nike brands in the years to come. Between Converse, Cole Haan, Hurley and Umbro, Tiger may be little more than an afterthought. Personally, I believe the Air Jordan brand has a much greater shelf life but time will tell. Either way, founder Phil Knight can sit back and enjoy his company's success.

Real Estate Recovery
Asset manager Cohen & Steers would likely characterize the current state of the real estate markets as stable - that's a good thing. In 2007 and 2008, its total return was -23.4% and -60.8% respectively. The rebounding REIT markets have brought a dramatic turnaround in its assets under management. In just one year, the funds it oversees have more than doubled to $27.2 billion from $11.6 billion. It's the difference between a 21 cents a share profit in the first quarter this year and a 34 cent loss in 2009. Founders Martin Cohen and Bob Steers own 55.6% of the stock.

Bottom Line
Successful companies require visionary management. Warren Buffett is a prime example of why it makes sense to invest with people who've committed a substantial portion of their net worth in the companies they run. The result is higher returns almost every time.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  2. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  3. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  9. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  10. Investing News

    Corporate Bonds or Stocks: Which is Better Now?

    With market volatility high, you may think it is time to run for corporate bonds instead of stocks. Before you do take a deeper look into which is better.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!