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 115,000-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, alongside our investors' opinions of the companies involved:

Companies are selected from the "Institutional Ownership Up Last Month" list published on MSN Money on the Saturday following close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Hmm. So it seems we mere mortals beg to differ with the pinstriped professionals on three of their favorite stocks. As a general rule, it seems Fools aren't at all fond of batteries, alleged pyramid schemes, or home mortgages (gee, I wonder why not?) One thing we can all agree on, though -- in troubled times, worried investors find comfort in gold.

Of the two miners making the cut this week, though, CAPS members' preference lies south of the border, and with the mellifluous miner "Compania de Minas Buenaventura." Let's find out what's got Fools so interested in this Peruvian mining concern (and while we're at it, let's abbreviate the name a bit, and just call 'em "CMB"):

The bull case for CMB

• GCBECKWITH introduced us to the firm back in March as: "a South American precious mineral mining company with most of their assets in Gold mining. ... [CMB] has a very low price per share, and they are a foreign stock, which may insulate them from some of the volatility we are suffering now."
• Well, one can hope. But as goofypicker pointed out in March, volatility can be a good thing for opportunistic investors: "Many speculators are panicing and claiming that this is the end of the 'commodity bubble'. I don't think so. If you look at the fundamental reason behind the last 6 months rise in precious metals ... The Fed continues to pump liquidity into the market, the interest rate continues to decline, inflation continues to increase and the dollar continues to fall. ... Precious metals will experience quite a bit of volatility and the gyrations may be tough to handle but I think due to the fundamentals that I mentioned above that a year from now precious metals will be much higher."
• OK, so I get why CAPS members like gold and silver in general. But why buy CMB in particular? mirwinthegreat summed up the bull thesis in March as follows: "Great earnings, good reserves, and a stock that is not followed much by the big boys. The volume is low compared to other big gold miners, but I think this works in your favor. This is still an undervalued company."

Me, I'm not so sure. For one thing, CMB seems unusually reluctant to publish information on its reserves. While I suspect the information is out there somewhere, CMB doesn't appear to update investors on this all-important information in its earnings releases. And the Fool's primary go-to data checker, Capital IQ, is similarly clueless as to how much gold and silver this company calls its own.

What Capital IQ does tell us, though, is that when you add up all of CMB's hard assets -- its tangible book value -- and divide that number into the company's market cap, it turns out that CMB sells for about 3.2 times the value of its underlying assets. For comparison, shares of Newmont Mining (NYSE:NEM) can be had for half that price. Goldcorp (NYSE:GG) -- a gold stock that I've called overpriced in the past -- is also cheaper than CMB on a price-to-tangible book scale. And Yamana Gold (NYSE:AUY) actually sells for less than its tangible book value.

Put it all together -- and call this a hunch if you like -- but my first impression is that CMB offers no great value. There's shinier rocks out in them thar hills, and I'd suggest you look elsewhere to mine it.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Compania de Minas Buenaventura -- or for that matter, even what our more bullish CAPS members are saying. What we really want to know is what you think. So here's your chance. Click on over to Motley Fool CAPS and tell us.

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