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 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 28,000 lay and professional analysts, 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, then that should get your attention.

And so, let's meet today's list of contenders:

Wall Street vs. Main Street
Wall Street appears to be on the buyout hunt once more. Two of the companies on this week's list (Digene and 1-800 Contacts) have already received bids, and a third (MIVA) may be benefiting from speculation that it will soon go the way of DoubleClick and aQuantive (NASDAQ:AQNT). Interestingly, all three get low marks on Main Street.

But we also have three stocks as beloved on Main Street as they are on Wall Street. Let's take a look at the one getting top marks from CAPS investors: gene-testing equipment maker Sequenom, endorsed by 92% of the CAPS players and 13 out of the 13 CAPS All-Stars who've looked at it. Here's what they have to say about the company.

The bull case for Sequenom

• All-Star investor pennysplants calls genetic testing "a sector in which I'm increasingly interested" and likes Sequenom as a "pick and shovel play." Meaning that no matter who ultimately sells gene-testing services, Sequenom gets to sell them the equipment used to provide those services.
• RBGunyon believes that "New channels and enhanced product platform bode well for this advanced biotech."
• stick703 views Sequenom as a "turnaround opportunity ... company used to trade at $30+ per share, dropped to $0.55, went through a reverse stock split and got new management ... with new products and exclusive rights to certain markets, these guys are on the rise again."

Time to chime in
While the stock may be on the rise, investors should be aware that the business is still unprofitable and burning cash. A quick look at the balance sheet tells us that at the current rate of cash burn, Sequenom will need to hit up its bankers for a loan -- or us investors for a follow-on offering of stock -- within the next 18 months.

Knowing that, do you think the company is still worth owning? Or are investors better off waiting until it starts putting money in the bank? Tell us what you think on Motley Fool CAPS.

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 ranked No. 350 out of nearly 30,000 rated investors. The Fool has a disclosure policy.