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?
At one point in time, the answer was easy: We didn't know what the bankers were up to -- but no longer. Thanks to the folks at finviz.com, it's now easy to keep tabs on what stocks financial institutions are buying and selling. And thanks to the 170,000-plus lay and professional investors on Motley Fool CAPS, we've also got 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:
Advanced Battery Technologies
Companies are selected from the "Institutional Ownership Up Last Month" list published on MSN Money after close of trading on Friday. 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're ...
- ... betting the solar sell-off is overdone, and there's still a future for Satcon Technology and its solar power inverters ...
- ... ignoring Cramer's advice to buy Polypore
(NYSE: PPO)as a play on electric cars, and betting on Valence and Advanced Battery instead ...
- ... and going against the grain on SIGA Technologies as well. Undismayed by last week's lousy earnings news, stock traders are hoping it can still land a contract to produce smallpox antivirals for the government.
Is it just me, or do I detect a theme in this week's Wall Street "winners?" Seems there's an awful lot of enthusiasm up there in NYC about companies with the word "technology" in their names. Sadly, though, this enthusiasm is lacking down here on Main Street.
Polling all Fools, we find the majority of investors are still pessimistic about SIGA's chances (and Valence as well.) Nor are they rushing out to invest in Advanced Battery, giving this stock only an indifferent, three-star rating on CAPS. Fact is, the stock on Wall Street's shopping list this week that Main Street investors prefer is ...
Never heard of Veolia? That's not an uncommon complaint when discussing foreign-based stocks, so perhaps a brief introduction is in order: What Veolia does, basically, is operate utility services such as garbage collection, municipal water, power distribution and transportation -- both in France, and around the globe (indeed, not a few miles from my own front door, the company operates Indianapolis Water!)
CAPS member WCWlooky thinks this puts Veolia "in the right business in the right places and cash to boot." Because, as CAPS member PinochleHead puts it: "When we don't need water, we won't need [Veolia]. Until then, I see [Veolia] as a stock I will pass on to my kids and grand kids."
jakefl004 calls the company "solid," and argues that "their market services will only be more needed as time goes on."
Last time I checked, our global population wasn't getting any smaller, so jakefl004 is probably right about that. Indeed, if you take a look at analyst growth estimates, they're expecting Veolia's profits to rise at an annualized pace of 18.4% over the next five years -- making the company's P/E ratio of 18.4 look almost spot-on. Now, toss in a 5.6 % dividend yield, and it seems to me you've got yourself a real bargain here -- but it gets even better.
Veolia's P/E ratio today is 18.4, right? But that P/E is based on the $779 million in "net earnings" the company reported last year. Meanwhile, Veolia actually generated free cash flow far in excess of that number -- $1.8 billion. Factor that number into the equation, and you can easily argue this isn't an "18 P/E stock" we're talking about at all, but a high-dividend yielder that sells for barely 8 times free cash flow!
Time to chime in
I have to say, numbers like these make Veolia look downright attractive relative to, say, rival water utility Aqua America
But hey, that's just my opinion. Maybe you have a different view? If so, we'd love to hear it. Click over to Motley Fool CAPS now, and tell us why you like Veolia (or don't.) Or tell us your favorite water utility pick. We're listening.
Aqua America is a Motley Fool Income Investor selection, but Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 464 out of more than 170,000 members. The Fool has a disclosure policy.
Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.