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 165,000-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 after close of trading on Thursday. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

"These are a few of our favorite things ..."
At least, they're four of Wall Street's favorite things. And down here on Main Street, each of these four companies has fans as well. CAPS member ddting, for example, likes the "new designs" at Crocs and says you're "starting to see people wearing them again." It's a start. Or Sammy7g, who casts a vote for China Agritech, making the accurate (if not exactly original) observation that there's "lot's of mouth's to feed in China. Keep that fertlizer com'n!"

Of course, the broader consensus on CAPS seems to be that these companies are less than the best places for your money. But there is one stock on this week's list that gets a positive rating from our investing community. That's the one we'll look at today, as we examine...

The bull case for Amtech Systems
CAPS member linzee6394 introduced us to Amtech way back in 2007 as a maker of: "capital equipment, including silicon wafer handling automation, thermal semiconductor processing equipment and related consumables used in fabricating semiconductor devices and solar cells. ... So in other words, they not only make semiconductors but they also supply the companies who make semiconductors and solar cells. So if you are into the solar companies how could you not be into this company?"

CAPS member pre176 agrees: "If everyone is at war, what better business is there than being an arms dealer? That's why Amtech is in such a good spot right now, all the solar companies are fighting tooth and nail to increase production dramatically."

And so does tomk104, saying simply: "Right place, right time. Solar power is definitely gaining favor and public mindshare, and the semiconductor business will always be in demand. This is a company with fantastic potential."

I agree. In fact, I recommended buying Amtech myself just last month -- a pick that's outperformed the S&P 500 by better than 32 points already. For this, however, I credit my own foresight quite a bit less than I do Amtech's own success. Just last week, Amtech stunned the Street with its best earnings report ever -- more than $43 million in fiscal Q3 2010 sales, alongside $0.42 per share in profits.

The news was enough to lift Amtech's trailing earnings to $4 million, and with free cash flow still running significantly ahead of what the company's allowed to report as "profits" under GAAP accounting standards, Amtech now sells for less than 20 times trailing free cash flow -- not bad for a company that, according to Wall Street, could post 50% annual growth over the next five years.

Foolish final thought
50% annual growth ... now there's a promise that just begs to be taken with a pinch of salt. But in fact, it's not as unrealistic a claim as it might sound. In April, Amtech's exclusive agreement to provide Yingli Green Energy (NYSE: YGE) with "N-type diffusion furnaces" expired, opening the door to expanded sales to Yingli's solar competitors, such as SunPower (Nasdaq: SPWRA), Suntech (NYSE: STP), and Trina (NYSE: TSL).

Whether explosive growth of the 50%-per-year variety results from this is anybody's guess. But even without the catalyst inherent in the Yingli deal's expiration, Amtech managed significantly more than 50% growth last quarter. Seems to me, it's not beyond the realm of possibility. Seems to me ... Amtech just might be as good as it looks.

Or at least, that's my opinion. But what do you think? Tell us on Motley Fool CAPS.