If actions really do speak louder than words, 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 160,000-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)

Silicon Motion (Nasdaq: SIMO)



Cheniere Energy (NYSE: LNG)



POZEN (Nasdaq: POZN)



Wabash National Corp.



MGIC Investment (NYSE: MTG)



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.

Jobless recovery? What jobless recovery? The Department of Labor reports that U.S. payrolls grew by 162,000 last month (thanks to a little help from short-term 2010 Census hiring). The Dow just skipped merrily past 11,000, and optimism has finally returned to the markets.

Or not. Sure, Wall Street's gone on a buying spree in response to all this good news. But down here on Main Street, investors are scanning the professionals' shopping list and shaking their heads in disbelief. I mean, why buy mortgage insurance provider MGIC in the middle of a housing crisis? Or debt-laden Cheniere? Or the profitless wonders that are Pozen and Wabash National? Just what are these professionals thinking?

But there's one company that Wall Street and Main Street can agree on.

The bull case for Silicon Motion
Although Silicon Motion may be only a fraction the size of industry heavyweights NVIDIA (Nasdaq: NVDA) and Advanced Micro Devices (NYSE: AMD), CAPS member 1money2 believes it "has the opportunity to be very competitive in the semiconductor market."

CAPS member probably420 goes even further, arguing that: "As mobile delivery of video increases, these folks provide THE chipset for mobileVideo applications" in handsets manufactured by Silicon Motion customers including Motorola (NYSE: MOT) and Samsung.

CAPS All-Star crazyrugger agrees: "As more and more small electronic devices are developed and introduced [Silicon Motion] is in a perfect position to compete since it has a good reputation, little to no debt obligations and is overseas. You don't have to worry about them being pushed out because of price competition."

Indeed, over the 18 months since I first highlighted the company's prospects, Silicon Motion has rewarded investors handsomely, with shares today fetching 70% more than they cost back then. The question we face today is whether Silicon Motion has booked all the gains it's gonna get or does it still have room to run.

Not done yet
At first glance you might think Silicon Motion's run is over. Just like every other stock on this list, it has no "profit" to report; at least not the sort of profit worthy of the name under GAAP. But what Silicon Motion does have is even better: free cash flow.

As a foreign company, Silicon Motion's financials aren't always the easiest to decipher, but I peg the company at having generated $7.5 million in free cash over the past 12 months. Not bad for a company valued at $165 million and with more than a third of its market cap in cash. It's even better when you consider that the consensus of the eight analysts following Silicon Motion is that this stock will grow its profit at 25% per year over the next five years.

Foolish takeaway
At this valuation, I see a lot of potential in Silicon Motion shares; and not a lotta risk.

But, hey, that's just my opinion. What's yours? Tell us on Motley Fool CAPS: It's fun, it's free, and it just might make you famous.

NVIDIA is a Motley Fool Stock Advisor selection.

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. 760 out of more than 160,000 members. The Fool has a disclosure policy.