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:


Recent Price

CAPS Rating (out of 5)

Gruma (NYSE:GMK)



Century Aluminum  (NASDAQ:CENX)



Las Vegas Sands  (NYSE:LVS)



Vanda Pharmaceuticals (NASDAQ:VNDA)



Beazer Homes  (NYSE:BZH)



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 has been buying these stocks hand over fist, and Main Street investors agree -- on one of 'em, at least.

Fools aren't keen on the prospects of Beazer or Vanda, and think Las Vegas Sands is a sucker's bet. They give a thumbs-up to Mexican tortilla maker Gruma but are middling on Californian metals magnate Century Aluminum. Aluminum-filled tortillas, anyone?

Um, do you have chicken instead?
Oh, all right. So we'll leave Century Aluminum for another day. This week, we'll focus on five-star CAPS pick Gruma, which is fast becoming a favorite of some of the best investors on CAPS.

  • There's CAPS All-Star usow004, for example, who tells us that: "This company beat the average before the economy fell. It took a harder hit than the average and now it is time for it to bounce back ... As things improve this stock will rise more quickly until it overtakes the industry once again." (In case you're curious, the industry usow004 speaks of includes such rivals as General Mills (NYSE:GIS) and Flowers Foods (NYSE:FLO).)
  • Fellow All-Star Trimalerus agrees, and sees growth prospects aided by the fact that "Latinos love their tortillas! And the percentage of Latinos in the US is increasing steadily, this company has a big moat and a discount price currently."
  • Will the tortilla market survive the recession? Indubitably, says yet another of our uber-investors. checklist34 calls Gruma the "leader in tortillas," adding: "tortillas are at least somewhat recession resistant and are not going away any sooner than lightbulbs, appliances, or cheeseburgers."

Hard to argue with any of that. But just because "tortillas" are a good investment, doesn't necessarily mean you should invest in any given tortilla maker, right? So what do we know about Gruma's potential as an investment?

At first glance, the picture looks bleak. Another of our CAPS All-Stars, tutaemeia, tells us that Gruma made some awful derivatives bets last year -- which explains how the company managed to lose nearly $900 million on $3.2 billion in sales, a truly awful result for a firm that had reported $204 million in profit just the year before. Chances are, once the derivatives mess is cleaned up, the company should be able to return to profitability.

Back to the future
Problem is ... that still won't be good enough for me. Gruma actually appeared in a companion column a few months back. Looking at it back then, I panned the stock for:

  • Its lack of free cash flow -- a situation that has not changed since.
  • Significant competition in its chosen business -- see above.
  • And its dependence on the price of commodites like corn -- a problem that will almost certainly never change.

In fact, the only thing that has changed about Gruma over the past eight months is that it has lost more money, burned more cash, and lagged as a stock -- all as I predicted.

Foolish takeaway
I expect more of the same. But that doesn't mean you have to agree. If you spy a tasty morsel in Gruma, where all I see is a stale piece of cardboard-tasting cornmeal, here's your chance to make your case. Click on over to Motley Fool CAPS, and hablanos por que Gruma te gusta.

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 No. 526 out of more than 130,000 members. The Fool has a disclosure policy.