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 140,000-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.

Two-way Street
Wall Street's professional traders look at these stocks and just love 'em to pieces, but down here on Main Street, we mere mortals are wary. Most of these companies fail to win even mediocre three-star acclaim on CAPS. But like the song says, one of these things is not like the others...

The bull case for Crosstex Energy
CAPS All-Star devilinside introduced us to Crosstex back in April:

[Crosstex Energy] has … excellent proven resources in all the right locations. They provide a high quality service to other producers as well. Demand for NG will grow rapidly… over the next 10 years. … With NG being one of the cleanest burning fuels available, new power plants using NG will be built … to handle the increased demand for power in the coming years.

What's more, as fellow All-Star barnettech points out:

the spread between the price of oil and gas is the largest ever. Can it last? … Without much more deep water finds (30,000 feet in the deep ocean), natural gas will surely go up in price.

So what role does Crosstex play in all this? Yet another of our uberinvestors, MJKpayday, explains that Crosstex is: "a partnership that covers several aspects of natural gas and liquid natural gas. If natural gas prices go up so will Crosstex."

This Fool's opinion
In addition to gathering and treating natural gas extracted by the drillers, Crosstex operates some 5,700 miles of natural gas pipeline and collects fees for transmitting the fuel. So if you think about it, even low gas prices could benefit Crosstex, increasing demand for the "cheap" fuel so that more of it moves through the system.

That said, a good macroeconomic story isn't enough to build a winning investment case for Crosstex. You also have to have the right numbers -- and here, I fear, Crosstex stumbles. Reviewing the company's financials, we find that:

• Crosstex earns an operating profit margin of barely one-third the average for its industry -- margins far inferior to those of rivals like Kinder Morgan Energy (NYSE:KMP) or DCP Midstream (NYSE:DPM).
• Also in contrast to its rivals, Crosstex pays no dividend to its shareholders, having suspended its dividend to conserve cash.
• And speaking of cash, did I mention that Crosstex has burned more than $700 million over the last five years?

Last but not least, while Crosstex might be short of cash, it's loaded up with nearly $1.4 billion in debt. Over the last 12 months, interest payments on its IOUs exceeded the money Crosstex earned from its operations by nearly $30 million. That's hardly an enviable position.

Time to chime in
Personally, when I look at Crosstex, I see a basket case. Apparently, I'm in the minority. Wall Street loves the stock, and CAPS members have high hopes that management can turn this ship around. Of course, we'd really like to know where you come down on the question.

So what do you say, Fool? Do you have an opinion on Crosstex? If so, we've got a place to espouse it. Click on over to Motley Fool CAPS now, and sound off.