Wall Street's Wish List

"Actions speak louder than words."

It's an old saying, with more than a grain of truth to it, I'll warrant. So why is it that when the Wall Street firms merely "initiate coverage" or "upgrade" their ratings on a company, that's what gets all the news coverage? After all, those are only words, when what really matters is how the big boys act. Luckily for Wall Street watchers, finding out which professionals put their money where their corporate mouthpieces are has become relatively easy in this Internet age of ours. All we have to do is read MSN Money's list of which companies the Street is most actively buying.

But once we've done that, what next? After all, "monkey see, monkey do" may not make for the soundest of investment strategies. That's where Motley Fool CAPS can help. The Fool's newest venture into the realm of collective intelligence collects ratings from more than 24,000 lay and professional analysts and then overweights the most successful raters' opinions to come up with a "CAPS rating" from one to five stars, five being the best. If Wall Street's buying and the smartest investors in Fooldom say they're right to do so, that should get your attention.

Let's meet today's list of contenders.

Chickens and eggs
Another well-worn saw asks us: Which came first, the chicken or the egg? As you've noticed by now, one characteristic that each of these stocks has in common is that they've experienced dramatic price increases over the past 30 days. But are the Wall Streeters buying because the stocks have gone up -- playing the momentum game -- or is their heavy buying causing the prices to spike? It could even be a combination of the two, a vicious circle of some buyers pushing the price up, and others hopping aboard the bandwagon and enjoying the ride.

Can this chicken fly?
Choosing which of the above seven stocks to profile is easy this week, as only Motley Fool Hidden Gems "Tiny Gem" (i.e., not a formal recommendation) Hurco matches Wall Street enthusiasm with CAPS approval. No surprise there.

But is that all Hurco has to offer, or might further gains be in store for patient owners? Once again, we turn to Motley Fool CAPS to tap the expertise of our fellow investors. CAPS players give Hurco the thumbs-up by a (better sit down for this) ratio of 182-to-1. Clearly, Wall Street's Wise Men aren't the first to have discovered Hurco. Here's what our very best investors -- the CAPS all-stars -- are telling us about the little machine-tools maker:

• CAPS legend TMFPlatoish1 confirms Hurco's status as an undiscovered near-"gem," observing as recently as five months ago: "They haven't really been discovered by Wall Street yet because of their size. My feeling is that will change as they grow and become recognized, and with it will come an expanded multiple, more in line with the larger players in the industry and in recognition of their solid growth and profitability metrics."
  
  
• WBuffettJr took the time to provide several detailed valuation analyses on Hurco, but the length (I'd conservatively put the total at roughly 15,000 pages) makes it all a bit longish for today's column. For now, an excerpt from the executive summary will have to suffice: "Hurco is still firing on all cylinders and is looking cheap again. It is as cheap as it was the last time I recommended it, only this time there is a clear catalyst to move the stock." (Go to Hurco's CAPS page to read the entire write-up.)
  
  
• And let's end with the unique view of industry insider flynner8, self-outed as a "Chief Project Manager at Volvo Powertrain," who confides that Hurco occupies a "Great niche in [the] machine-builders market segment" and further observes that "Offshore competition makes it essential that U.S. companies buy less expensive PPE [property, plants, and equipment] to keep product costs down. HURC offers a product that helps execute this strategy. I look for an increase in U.S. sales based on my comments above."

It's truly amazing, folks, the level of detailed analysis that CAPS players have done on Hurco. As many stocks as I have investigated on the service, I've yet to see one as thoroughly covered, and as well-respected by the investors doing the coverage, as Hurco. If there's one stock you read more about today -- make it this one.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 46 out of more than 24,000 raters. The Fool has a disclosure policy.