"Actions speak louder than words."

It's an old saying, with more than a grain of truth to it, I'll warrant. So why is it that when the Wall Street firms merely "initiate coverage" or "upgrade" their ratings on a company, that gets all the news coverage? After all, those are only words, when what really matters is how the big boys act. Luckily for Wall Street watchers, finding out which professionals put their money where their corporate mouthpieces are has become relatively easy in this Internet age of ours. All we have to do is read MSN Money's list of which companies the Street is most actively buying.

But once we've done that, what next? After all, "Monkey see, monkey do" may not make for the soundest of investment strategies. That's where Motley Fool CAPS can help. The Fool's newest venture into the realm of collective intelligence collects ratings from more than 27,000 lay and professional analysts, then overweights the most successful raters' opinions to come up with a "CAPS rating" from one to five stars (five being the best). If Wall Street's buying and the smartest investors in Fooldom say they're right to do so, then that should get your attention.

And so, let's meet today's contenders:

Currently Fetching

CAPS Rating

Twin Disc (NASDAQ:TWIN)

$60.19

*****

North American Palladium (AMEX:PAL)

$10.13

****

O2Micro International (NASDAQ:OIIM)

$10.53

***

XenoPort (NASDAQ:XNPT)

$43.95

*

Align Technology (NASDAQ:ALGN)

$23.87

*

Amazon.com (NASDAQ:AMZN)

$62.60

*

Transcend Services (NASDAQ:TRCR)

$13.53

Not rated

Companies are selected from the "Institutional Ownership Up Last Month" list published on MSN Money on the Saturday following close of trading last week. Price increase and current pricing also provided by MSN Money on the same date. CAPS ratings from Motley Fool CAPS.

Wall Street vs. Main Street
Wall Street's top picks get a mixed welcome on Main Street this week. One we've never heard of, three more we have -- and don't like. But when it comes to O2Micro, North American Palladium, and Twin Disc, investors are more receptive to Wall Street's suggestions. Top of the heap, as you can see, is Twin Disc -- a relatively low-profile, small-cap company whose stock in trade is manufacturing engine parts that power heavy equipment and boats.

Its low profile notwithstanding, Twin Disc gets high marks on CAPS, where all but one of 72 raters think it's a winner. Still more impressive, the verdict among our best investors -- the CAPS All-Stars -- is a unanimous 30-out-of-30 approval rating. What's driving their enthusiasm? Let's find out.

The bull case for Twin Disc
DRP451 likes the company so much that he bought shares in real life, as well as praising it on CAPS. He gives us the following short introduction:

Founded in 1918, Racine Wisconsin, 872 Employees, CEO hired in 1970 became CEO in 1991 ... 23.30% insider holding ... Manufacturer of large gas and well service pumps used on 3000hp motors. Maybe some risk to this segment as oil prices drop ... Marine Transmissions in the pleasure segment did not do that well last year but was offset by increases in Fishing and Military Marine sales. Increase in sale from the purchase of Rolla SP Proppeller SA.

CAPS veteran and all-around good Fool manucastle crunched the numbers on Twin Disc and believes its "Intrinsic value = $60.53" such that it is "Selling at a discount of 45%." Um, actually, he said that three months ago, so the good news is that manucastle was dead on -- the bad news is that the stock has run up to his estimate of its full value.

Not to worry, though, says StunnerEclipse, who calls Twin Disc "a great growth company" at any price, and one that, even after the run-up, has "a low PE of 18."

Time to chime in
Personally, I have a hard time thinking of an 18 P/E as "low." Historically, that's more than the average S&P stock has fetched. That said, Twin Disc sells for a 16 P/E today, while the average S&P-er commands an 18.5 valuation. But does that make Twin Disc cheap?

Whether you think Twin Disc has had its run, after matching manucastle's valuation, or can go higher still, as StunnerEclipse argues, is up to you. I'd just make one request: If you take the time to look at the stock, and come to a conclusion -- clue us in!

At Motley Fool CAPS, we're always looking for a few good analysts, and couldn't care less if they've got a "Dr." in front of their name or a "CFA" behind it. Here, it's results that matter. But like the saying goes: "You gotta play to win."

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 285th out of more than 28,000 raters. The Motley Fool has a disclosure policy.