Wall Street's 10 Favorite Stocks Right Now

On the heels of some seriously ugly macroeconomic news and last year's market plunge, investors withdrew more than $55 billion from their mutual funds in just the first three months of this year. Things are scary out there, and investors are (understandably) freaking out.

All that pressure got you down ...
When Wall Street's all sunshine and roses, everyone is a stock market genius. Only during the uncertain times do most investors seek "expert" advice. That often means pulling up Yahoo! Finance to see what analysts think of their stocks.

Despite my long-standing misgivings about the worthiness of Wall Street's advice -- especially now, after a year of watching their business sense nearly destroy our entire economy -- I wanted to find Wall Street's 10 favorite stocks.

So I built a screen using Capital IQ, a great institutional software package. I sought out the stocks with the most analyst "net buy" recommendations, with net buys defined as buys minus sells.

Here they are:

Company	Analyst Net Buy Recommendations	% Owned by Institutions*	Market Cap
Activision Blizzard	18	45%	$14.6 billion
Enterprise Products	14	23%	$11.9 billion
American Eagle	13	65%	$2.7 billion
Aqua America (NYSE: WTR)	13	53%	$2.4 billion
Applied Materials	12	94%	$15.1 billion
Humana	12	85%	$5.2 billion
BioMarin Pharmaceuticals	11	129%	$1.4 billion
Juniper Networks (Nasdaq: JNPR)	11	114%	$12.1 billion
St. Jude (NYSE: STJ)	11	89%	$13.7 billion
Comcast (Nasdaq: CMCSA)	11	86%	$38.8 billion

Source: Capital IQ, a division of Standard & Poor's.
Includes domestic stocks trading on major exchanges. Analyst recommendations as of June 30, 2009; institutional ownership as of March 31, 2009.
*Approximate. Institutional ownership may exceed 100% because of short sales or a lag time in the reporting of institutional holdings.

So what general themes can we gather from this list?

1. For all the flak that we at The Motley Fool dish out to Wall Street for its susceptibility to deadly value traps, chronically unhinged earnings estimates, and proclivity to overvalue stocks, I was pleasantly surprised to see so many strong names on the list. Activision, St. Jude, and Comcast have competitive advantages from their brand, patents, and monopolies, respectively. NYSE Euronext (NYSE: NYX) recently announced it will be using Juniper's hardware to help it build the world's fastest trading network. Aqua America, Enterprise Products, and Applied Materials enjoy strong support from our 135,000-member CAPS investment community.
   
   
2. Six of Wall Street's 10 favorite stocks hail from the health-care and IT industries. Qualcomm and Amgen (Nasdaq: AMGN) also ranked very highly. We could read this as an informed endorsement that these industries will lead the recovery. Analysts could also be betting that these businesses will benefit from stimulus spending on broadband access, National Institutes of Health research, and subsidized health insurance. Alternatively, it could just mean that even during recessions, Wall Street can't help but get wrapped up in its enthusiasm for exciting growth industries.
   
   
3. Almost by definition, most of Wall Street's favorite stocks are widely followed, widely owned, large, prominent companies. Twenty-six analysts cover these stocks on average. All have heavy institutional ownership, and the majority are large caps valued at more than $10 billion.

While many of them could turn out to be great investments, do any of Wall Street's 10 favorite stocks have what it takes to be among the market's 10 best-performing stocks?

Let's find out
To answer that question, let's compare Wall Street's best buy list to the past decade's 10 best-performing stocks.