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 Friday. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

These are a few of our favorite things
Skimming over the list of Wall Street's favorite stocks this week, I see several heads nodding in agreement out there in Fooldom. On Oncolytics, for example, CAPS member seawayguy notes that this cancer research shop has "numerous phase 3 trials under way" and believes it is can now "cure cancer in mice." (Hey, it's a start.)

Phase III trials on a new means for delivering "liver tumor treatment" have Fool members stallis and tgretethan feeling similarly optimistic that fellow cancer researcher Delcath will "pop going into FDA approval." Meanwhile, in a completely separate area of the stock market, investors are cheering SunPower's contract to build a "solar park" in Delaware, and CAPS member nonzerosum argues that "Solar is at an inflection point because the price per watt is now economical at the margins."

And yet ... none of these three Wall Street faves has yet managed to hit that even more important inflection point -- the one where investors think it's more likely than not that the stock will "beat the market." Even SunPower currently sits below that threshold, with a three-star-rating that teeters on the brink. Turns out, there's only one stock making the list this week that crosses the finish line into actual investor optimism, and that company is called ...

Anadigics
Anadigics isn't yet a household name for most investors. Fortunately, CAPS member OTMoptionsfool took the time to introduce us to the company last year: 

ANADIGICS ... provides semiconductor solutions to the broadband wireless and wireline communications markets. The company designs, develops, and manufactures radio frequency integrated circuits. It offers cable television (CATV) cable modem and set-top box products, CATV infrastructure products, and fiber-to-the-premises products. They have been in business for 25 years making them a stable pick in these uncertain times...

And for that, you can thank the indefatigable U.S. consumer. As CAPS All-Star nocemployee laments-slash-cheers: "Cell phone technology is not slowing down nor is it expected to. These idiots can't pay their mortgage and complain about unemployment, but they have got to have the new iPhone." And Anadigics is there to help meet that "need."

Result: Like rival wireless semi plays TriQuint (Nasdaq: TQNT) and RF Micro (Nasdaq: RFMD), Anadigics' stock has had more ups than downs this year, and is currently outperforming the S&P 500 (albeit not as strongly as the more popular Skyworks Solutions (Nasdaq: SWKS).

Taking a glance at his stopwatch, PizzeriaMan recently clocked Anadigics posting "double digit compounded growth rate for last 5 years." The stock also offers a "good debt/equity ratio," and "is in a good niche market."

Buy these numbers?
What the company does not offer investors, unfortunately, is a whole lot to show for its efforts. The stock may be up, true, but after losing money in four of the past five years, and burning cash in all five out of five years, I'm not entirely convinced that Wall Street's buying binge at Anadigics is the right move to make.

True, with $83 million worth of cash in the bank, and a current cash-burn rate of less than $6 million per year, Anadigics is at no risk of going out of business any time soon. True, too, if the analysts are right about the company emerging into profitability this year, and growing its earnings at 25% per year over the next five years, the company could still reward long-term investors.

As for me, however, I'm going to sit this one out. I'll await proof that Anadigics can generate cash in the future at something approaching the speed with which it's burned cash in years past. Until it does that, well ... there are plenty of other stocks that are actually making money to choose from.

Of course, that's just my opinion. Maybe you disagree? If so, we've got a place to state your case -- click over to Motley Fool CAPS now, and tell me why I'm wrong.