It’s reassuring to know that key management, particularly the CEO and CFO, hold large positions in a firm. What constitutes a large position varies with the size of the firm, but think millions for the CEO and hundreds of thousands of shares for the CFO. It’s disconcerting if key officers hold only a few thousand shares and sell immediately after exercising stock options.
Yahoo is the best place to see how many shares insiders own. Low shareholdings by key officers isn’t a deal breaker, per se, but it should be considered along with the other management quality factors.