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:
|
Stock |
Recent Price |
CAPS Rating
|
|---|---|---|
|
Phoenix Companies |
$4.39 |
**** |
|
VisionChina Media |
$8.72 |
*** |
|
Select Comfort |
$6.28 |
*** |
|
Acorn International |
$6.15 |
*** |
|
Oncolytics Biotech |
$3.48 |
** |
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.
Two-way Street
Wall Street traders think these stocks are the bee's knees, but down here on Main Street, we're not so sure. Most of these stocks are lucky to get even a mediocre three-star rating on CAPS, while a certain tiny Canuck cancer chemist who-shall-remain-nameless doesn't even rate that much.
One stock we do like, however, is the aptly named Phoenix Companies -- a small life insurer with big dreams. Here's what Fools have to say about it.
The bull case for Phoenix Companies
Never heard of Phoenix? I can't blame you -- neither had I. But as harlanror tells us, this is actually "a very old company [that] has been around for 150 yrs, they have seen good and bad times, but have always done good in good times." ("Good" apparently being a relative term. Phoenix has produced nearly $290 million in operating losses over the past year.)
Its ill-fortune notwithstanding, Phoenix lit up the sky in recent days -- and caught the attention of CAPS All-Star TSIF, who noticed the stock "spiking on a screen and decided to go for a ride. It's hard to value financials and life insurance companies. Things just aren't as they seem and what they put on paper really doesn't mean much." TSIF muses that although: "this could just be a ride to nowhere like CIT
But what about the losses, you ask? Fellow CAPS All-Star bradford86 has a response ready for that: "When you overstate your losses, you're packing a big punch --- that most people sell. I'm a buyer when other people are selling what I consider to be good news."
Allow me to agree with my fellow CAPS members on at least one point: Like TSIF says, it's hard to value life insurance companies like Phoenix -- but I'll take a stab at it.
Acknowledging that "what they put on paper" may not mean much, Phoenix's numbers do look good at first glance. Its most recent financials show $7.71 per share in tangible book value, versus a stock price of just $4.39. That right there looks like a bargain. Larger life insurers like MetLife
Final point: While it's true that Phoenix is losing money today, so too are its larger rivals. Plus, if bradford86 is right, Phoenix's "losses" may not be real at all. If he's right, and if Phoenix one day gets the chance to reverse the losses and count them as profit -- then the stock could get a big boost.
Time to chime in
Of course, that's just my opinion. And as I'll readily acknowledge, I'm not an insurance expert. Given my druthers, and given the uncertainty of investing in unknown quantities like insurance companies, if forced to make an investment in this industry, I'd most likely punt and put my money in a reliable pot like Berkshire Hathaway
But surely there are investors out there reading this column who know more than I do about valuing these types of companies, and who know a bargain when they see one. If you're one of them, we'd love to hear from you. Click on over to Motley Fool CAPS now, and sound off on Phoenix.
