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 140,000-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 on the Saturday following close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Sell in May and go away? Hardly. Wall Street traders have been busy little beavers this summer -- but if you ask Fools what they think about the Street's picks, we suspect the traders would have been better off spending more time at the beach, and less time buying garbage.

Three of the stocks on today's list receive our very worst rating -- a single CAPS star. Another fares not much better. In Main Street's opinion, only one of these companies is worth a second look. That's the one we'll profile today.

Hello, Mumbai? I need this X-ray, stat
Do you remember when the "outsourcing" phenomenon was going to destroy America? Well, it's certainly done a number on individual companies -- Boeing (NYSE:BA), for example (but not in the way anyone expected). Lately, we've had bigger problems to worry about, and have put the outsourcing debate on hold, but the companies doing the outsourced work aren't slowing down. Companies like ...

NightHawk Radiology
CAPS All-Star xfranco4bcn profiled this Idaho-based provider of outsourced X-ray examiniations last year, praising the business model and panning the P/E, but arguing that the "potential for growth is high as medical services keep growing and being outsourced to specialists."

Around the same time, fellow All-Star LimoDriver1971 posed the rhetorical question: "It's healthcare. When was the last time YOUR health insurance costs went down?" More recently, nibs61 was impressed by NightHawk's latest earnings report, and sees: "[p]ositive signs all over and looking for them to carve their niche in the health care industry."

I agree. The more Congress talks about cutting health-care costs, the greater the opportunities for NightHawk to help do just that. Operating a "virtual radiology department" that spans the globe -- and all 24 time zones -- NightHawk allows ER docs to quickly get a specialist's read on what their X-rays are showing, at any time of day.

That's a heckuvalot cheaper than paying overtime to keep a radiology team on-site. So whichever way the health-care debate ultimately goes -- whether the U.S. government ends up running things, or we keep our present system of megainsurer intermediaries like UnitedHealth (NYSE:UNH), WellPoint (NYSE:WLP), and Aetna (NYSE:AET) -- I see a real incentive for the people paying the bills to use NightHawk to keep 'em low.

Time to chime in
And speaking of "low," did I mention that NightHawk the enterprise sells for the low, low price of around eight times free cash flow? Or that it has consistently grown its free cash, year in and year out, for at least the past five years?

To me, that makes this stock look like a no-brainer, folks. But perhaps you disagree. If so, then feel free to burst my bubble, and poke holes in the bullish thesis laid out above. Click on over to Motley Fool CAPS, and poke away.

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