Wall Street's Buy List

Actions speak louder than words, as the old saying goes. So why does the media focus so much attention on what Wall Street says about companies, instead of what it does with them?

Luckily for Wall Street watchers, the Internet brings us MSN Money's list of which companies the institutions are buying. True, we should be as skeptical of Wall Street's actions as we are of its words. But when the 83,000-plus lay and professional investors on Motley Fool CAPS agree with Wall Street's opinions, it just might be time for some buying.

Here's the latest edition of Wall Street's Buy List, enhanced with CAPS investors' opinions of the companies involved:

Wall Street vs. Main Street
Main Street seems decidedly unimpressed with Wall Street's favorite stocks this week, panning most of the professionals' picks, and giving just one of them above-average marks.

And just where do Main Street and Wall Street's sentiments intersect, you ask? On the unlikeliest of corners: E*Trade, a discount broker and erstwhile subprime mortgage lender whose stock has fallen 80% over the past year. After such a freefall, you might think there's at least some room for upside today -- and as a matter of fact, several Fools argue just that.

The bull case for E*Trade
MJKpayday gives us a superb summary of the bull thesis on this one, writing just a few days ago: "Unlike it's competitors E-trade went after the mortgage [business] and this is why we are at a bargain today. Unlike its mortgage competitors we have the worlds most recognizable equity trading platform and this is why we have a turnaround tomorrow."

NightBengal's comments from about a week earlier are also worth a read:

E*Trade has been hammered throughout the banking and mortgage debacle sweeping the market. At a price like this, the company really has three choices: 1) Keep with their turnaround plan, which the executives say is going well. 2) Get bought by a competitor, in which case the share price likely gets a merger boost. 3) Go bankrupt. Of these, I think bankruptcy is the least likely, and it is the only option guaranteed to lose share price.

And let me close out today's column with a few words from ... me. Yes, somehow, Yours Fool-y wound up with the top-rated E*Trade pitch on CAPS. Here's what I wrote back in November, right after a downgrade from Citigroup (NYSE: C) torpedoed the stock on bankruptcy fears:

Best case, E*Trade bounces right back after Monday's freefall. After all, an analyst pointing to some numbers and expressing an opinion about them is hardly a material change in the situation -- the numbers were there all along. Worst case, the analyst was right, and E*Trade is headed for bankruptcy. The stock continues to fall. And what happens then? Somebody comes along and buys it on the cheap. Either way, I ... suspect we'll see the price heading north in short order.

So far, so good on that thesis. To date, my bullish call on E*Trade is outperforming the market by 19 points. But I have to admit, when I penned those thoughts, I was very much making a W-A-G -- a "wild donkey guess."

E*Trade hasn't actually bounced back to its former heights (yet). Nor has TD AMERITRADE (Nasdaq: AMTD) or Charles Schwab (Nasdaq: SCHW) come riding to shareholders' rescue with a buyout offer. Instead, the truth so far is somewhere in the middle. E*Trade has rebounded significantly, but it's far from recovering all its lost ground.

Will it continue to rise, or is this as good as it gets? Your guess is as good as mine -- so don't be shy. Come on over to CAPS and tells us why you think E*Trade will ultimately recover its lost glory ... or plunge back into defeat.

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