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 150,000-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)

Kratos Defense & Security (Nasdaq: KTOS)



Cliffs Natural Resources (NYSE: CLF)



iStar Financial (NYSE: SFI)



LCA Vision



Sequenom (Nasdaq: SQNM)



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 and CAPS ratings from Motley Fool CAPS.

Wall Street vs. Main Street
Wall Street loves all these stocks, and judging from their star ratings, CAPS members agree in for the most part. Here's the strange thing: The one company Fools appear to love most of all on today's list is one I've never heard of.

The bull case for Kratos Defense & Security
And I'm not the only one. Not a single recent pitch in all of CAPS-land mentions "Kratos" by name. The most recent bullish statement of any merit dates from more than two years ago -- and even it discusses Kratos in the context of its former corporate identity, "Wireless Facilities."

Back when it went by the former moniker, justdoodleit described Kratos as "an independent provider of systems engineering, network services and technical outsourcing for the world's largest wireless carriers, enterprise customers and for government agencies." But since changing its name in 2007, Kratos seems to have also changed its mind about the kind of business it wants to be, and now bills itself as a provider of "mission critical engineering, IT services and war fighter solutions for the U.S. federal government and for state and local agencies." It's into various military hardware and software service, scattered throughout the U.S. and various military locations.

Kratos goes commando
Yes, Fools, leaving behind its history as a sometimes-profitable-but-more-often-not corporate "cable guy," it seems Kratos has enlisted, and is "in the army now." But is that a good thing for investors?

It's really hard to say. The change in focus doesn't seem to have done much for Kratos's profitability, for example. To the contrary, the company hasn't earned a profit since 2005. And next week's release isn't likely to change that.

And while I do see some basis for CAPS members' enthusiasm for the stock -- for example, the stock sells at a price-to-sales ratio of less than 0.6 (versus the 1.0 ratio more common among defense contractors) -- to be honest, you can find similar valuations for a whole range of defense contractors that we've actually heard of. Boeing (NYSE: BA), Lockheed Martin (NYSE: LMT), L-3 Communications (NYSE: LLL) -- these are just a few of the names currently on sale for the low, low price of 0.6 times sales, or thereabouts. Why an investor would bet on a virtual unknown like Kratos to outperform these juggernauts is beyond me.

Time to chime in
"Kratos Defense & Security." The name certainly intrigues -- but for now, the numbers just don't add up for me. That said, like I said, I do not know a lot about the company -- but I'm willing to learn.

If you've got a theory as to why everyone's buying Kratos these days, then here's your chance to enlighten the rest of us -- and become the foremost expert on the company on CAPS today. Click over to Kratos's CAPS page, and tell us all about it. Enquiring Fools want to know: What's so great about Kratos

Fool contributor Rich Smith has no position in any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 621 out of more than 150,000 members. The Fool has a disclosure policy.