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 135,000-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):

AgFeed Industries (NASDAQ:FEED)



WSP Holdings  (NYSE:WH)






ReneSola  (NYSE:SOL)



Satyam Computer  (NYSE:SAY)



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.

Every once in a blue moon, Wall Street and Main Street agree on which stocks offer the best prospects for profits. But sometimes, you don't just have to wait for the stars to align -- you also have to travel a bit to see it. That turns out to be the case this week, in which every single stock on the list hails from either China or India.

Ranking high is WSP Holdings -- not exactly a household name. But if you've never heard of the company, that's not going to be a problem. Our CAPS members will be glad to help introduce you to ...

The bull case for WSP Holdings

Ah, but does it deserve our support? To find the answer, I did a little digging around in the company's financials. Here's what I found:

  • First and foremost, the stock looks very cheap at first glance. Based on both trailing earnings and future projections of same, WSP sells for a price-to-earnings ratio of less than 7.
  • There's zero debt and nearly $160 million in cash. Considering that steel companies (oil pipes ain't made out of PVC, you know) such as U.S. Steel (NYSE:X) and AK Steel (NYSE:AKS) routinely carry more debt than cash on their balance sheet, this is a big point in WSP's favor.
  • Last but not least, we have a company that -- as NFInvestors points out -- does not stint on sharing the wealth with its shareholders. Its current dividend yield of 4.2% is none too shabby.

On the negative side, two things jump out at me about WSP. First, Wall Street is projecting only 5% long-term growth at the company -- which is better than the prospects at U.S. Steel or AK Steel, but still pretty weak. Second, while the company boasts impressive profit ($99 million in 2008) as calculated under GAAP, its free cash flow runs to the negative, to the tune of minus-$54 million.

Time to chime in
Now, considering the size of WSP's cash reserve, that's probably not a critical concern in the short term. Still, if you examine the company's history, WSP has generated positive annual free cash flow only once in the past five years. And even then, it was a pretty meager haul -- just $5 million in fiscal 2006, versus nearly $59 million in GAAP profit. I like investing in companies that are a bit more skilled at generating free cash than WSP appears to be.

But that's just me. Lots of other Fools seem quite enthused about the company's prospects. Are you one of them? Can you make a reasonable argument why the company will prosper going forward? If so, then here's your chance. Head on over to Motley Fool CAPS, and tell us why WSP Holdings is on your buy list.

Motley Fool CAPS : It's fun, it's free, and it just might make you famous.

Fool contributor Rich Smith owns no shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's ranked No. 964 out of more than 135,000 members. The Fool has a disclosure policy.