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?

Once upon a time, we didn't know what the bankers were up to. Now, thanks to the folks at finviz.com, it's easy to keep tabs on the stocks that financial institutions buy and sell. And the 170,000-plus lay and professional investors on Motley Fool CAPS can lend us further insight into whether these decisions make sense.

Here's the latest edition of Wall Street's Buy List, alongside our investors' opinions of the companies involved.

Companies

Recent Price

CAPS Rating (out of 5)

Identive (Nasdaq: INVE  ) $1.98 *****
Travelzoo (Nasdaq: TZOO  ) $32.47 **
Syntroleum (Nasdaq: SYNM  ) $1.05 **
TravelCenters of America (NYSE: TA  ) $4.30 **
Tesla Motors (Nasdaq: TSLA  ) $25.80 *

Companies are selected based on past-3-month changes in institutional ownership, as reported on finviz.com. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Wall Street vs. Main Street
Up on Wall Street, the professionals think these five stocks are the greatest things since sliced bread. (And by "bread," I mean money.) They've been ...

  • Kicking the tires at Tesla ahead of the company's Model S release -- perhaps encouraged by the lackluster e-car sales at General Motors (NYSE: GM  ) and Nissan, and thinking Tesla's new electro-buggy mightn't be as far behind in this race as once thought.
  • Betting that the worst of TravelCenters' slide is now over and that the roadside refueler is ready to merge back into traffic. (At a forward P/E of 5.3, they could be right.)
  • Inexplicably buying up shares of profitless alt-energy producer Syntroleum -- a bet on a rise in the price of oil, perhaps?
  • Taking a cue from management, loading up on Travelzoo shares as well.

Of course, judging from the one- and two-star ratings CAPS members are handing out, few investors are interested in following Wall Street's lead on these stocks. In contrast, one stock Wall Street and Main Street investors do agree on is tiny near-field communications specialist Identive Group, a key partner in Google's (Nasdaq: GOOG  ) digital "Wallet" project. Let's find out why Fool's see a future at Identive, as we examine ...

The bull case for Identive Group
CAPS member lmfb24 thinks the digital-payments industry is "a real growth area" for Identive. Kamale says of the company: "forerunners in their field of expertise. Another Rule Breaker stepping on the advanced technology field."

Ken311 calls Identive a "strong company with solid digital security products." What's more, Ken311 sees opportunities beyond Google Wallet: "As the government continues to get hacked there is more chance that further contracts with INVE will take place."

Ken311 isn't alone in that optimism. Though currently not profitable, Identive is pegged for $0.11 per share in profits next year. With only three analysts tracking the company, no one seems ready to go on record for its growth prospects after 2012. But with the company selling for barely $120 million today, it seems safe to say that if Google Wallet is a success, Identive's prospects look bright.

Foolish final thought
Now, that's not to say this is an investment without risks. Identive still has to prove that it has a viable business model. With no profits to speak of, and a record of burning cash for the past five years straight, I'd say the trust/verify equation on Identive today leans heavily toward "verify." Still, with $18 million worth of cash in the bank, and a cash-burn rate of less than $9 million annually, the company should have a few safe years left to prove itself.

Fingers crossed.

Think Identive has a future? Tell us why on Motley Fool CAPS -- then add Identive to your watchlist and find out whether you're right.

Fool contributor Rich Smith owns shares of Google. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 352 out of more than 180,000 members.

The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of General Motors, Travelzoo, and Google. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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  • Report this Comment On December 16, 2011, at 10:39 AM, vstrother wrote:

    Is it just me or was it odd that SYNM achieved the 10 consecutive days of closing above $1 to get back into the good graces of the NASDAQ and then immediately fell below $1 again the next day? The 10 consective days above $1 was achieved a few weeks after the notice from the NASDAQ.

    I just thought it was odd that the price immediately fell after and is still falling today.

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