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 130,000-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.

Wall Street vs. Main Street
Wall Street traders can't get enough of these stocks. They love 'em all to pieces. But Main Street investors? Not so much. To the contrary, we think American Apparel is last year's fashion. We'd rather let what happens to MGM, stay in Vegas. We just say "no" to drugmaker BioCryst, and detect a "funny" taste at Ruby Tuesday.

On the other hand, we're starting to see some light at LCA-Vision. Here's why:

The bull case for LCA-Vision
The bull thesis on this one is as plain as the nose on your face. RugbyViking13 laid it out for us one year ago: "Nobody wants to be forced to wear glasses and contacts for the rest of their life." Bad news for Alcon (NYSE:ACL) and Luxottica (NYSE:LUX); good news for TLC Vision (NASDAQ:TLCV) ... and LCA.

On the other hand, movinonnon pointed out around the same time that LCA-Vision "will suffer in the short term if consumers reduce spending, but a drop in profits is already priced in. In the long run, people will continue to get LASIK at increasing rates and for more types of eye problems, and [LCA-Vision] will collect the cash." CAPS All-Star huddaman agrees, calling the stock "cyclical in nature," and predicting that "pent up demand needs to release at some point next year and 2011."

But as Tom Petty once Foolishly pointed out, the waiting is the hardest part. Last week, LCA-Vision reported steep declines in procedures performed, same-store sales, and overall revenue -- all of which added up to a $4.2 million operating loss for the first quarter.

The good news is that LCA remains strongly situated to wait out this downturn in order to reap the benefits of huddaman's predicted "pent up demand." The company still boasts more than $61 million in cash and short-term investments, versus roughly $19 million in debt. More importantly, it's once again heaping cash onto the pile. Free cash flow amounted to $7.1 million in the first quarter, versus a cash-burning year-ago quarter. Thus, the company is once again free cash flow-positive on a trailing-12-month basis (if just barely).

Foolish takeaway
Will the company return to its banner days of $30 million and more in annual free cash flow? Your guess is as good as mine (so whaddya say?). But if LCA does manage to see its way through this recession, then today's stock price of under $130 million -- and almost one-half of that backed up by cold, hard cash (and cold, hard short-term investments) -- is going to look dirt cheap when it does.