Deep Dive: Why you should buy shares of companies whose CEOs have skin in the game

Fund managers tend to say they look for quality companies that are increasing sales and cash flow, and have strong balance sheets.

Bryan Hinmon, the lead manager of the Motley Fool Global Opportunities Fund, says another measure is just as important: Companies whose founders or CEOs remain heavily involved and have large ownership stakes.

The Motley Fool Global Opportunities Fund FOOLX, +0.16% has a four-star ranking, out of five, from research firm Morningstar. We’ll show the fund’s performance and largest holdings below.

In an interview July 17, Hinmon said that rather than measuring “statistical quality,” he and his colleagues emphasize these four areas when selecting companies:

  • Management culture and incentives.

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