We're among the first to give Wall Street analysts grief at The Motley Fool. Whether it's because they're too conflicted, too optimistic, too caught up in protecting their jobs, or too wrong, there are times, frankly, when they deserve it.
But Wall Street analysts also do a lot of good work -- and here at The Motley Fool, we'd also like to be among the first to celebrate those good calls. Recently, for example, I called attention to the stellar stock-picking track record that Needham & Co. is establishing in the beta test of our brand new Motley Fool CAPS investing community.
See, CAPS tracks the outperform and underperform ratings that both individual investors and Wall Street pros put on stocks. In turn, every stock and every investor earns a rating.
Yes, you read that correctly: Every investor is rated. That means we can finally answer the age-old question: Which Wall Street analysts are better stock pickers than my grandmother?
So which Wall Street analysts are better stock pickers than my grandmother?
While Needman is still one of Wall Street's top firms, they are no longer the top form. That honor today falls to Caris & Co., an investment bank that, according to its website, focuses on "big picture" analysis to identify long-term winners in "Health Care, Technology, Energy, Infrastructure/Industrials, and Retail."
Based on data from briefing.com, Caris has scored big, putting outperform ratings on Horizon Lines (NYSE: HRZ), Brocade Communications Systems (Nasdaq: BRCD), Atheros Communications (Nasdaq: ATHR), and Bell Microproducts (Nasdaq: BELM). Atheros, for one, is a stock with both excellent fundamentals and excellent management. The company likely impressed Caris & Co. analysts just as it has our own Motley Fool Hidden Gems analysts -- who recently made it one of their small-cap recommendations as well.
Overall, Caris is crushing the market with 73% accuracy.
And if you're looking to piggyback on Caris & Co.'s success -- either in CAPS or in your real money portfolio -- the firm recently put outperform ratings on Aeropostale (NYSE: ARO), Network Appliance (Nasdaq: NTAP), and eResearch Technology (Nasdaq: ERES).
Warning: Past performance does not guarantee future results
Of course, the caveat here is that we've only been tracking Wall Street picks for a few months now. While we can't yet call the data predictive, it's at least valuable to know who tends to be right more often than wrong.
If you'd like to take a look at the rest of Wall Street's best and worst analysts and their stock recommendations, click here to join the free beta test of Motley Fool CAPS. You can also get all kinds of opinions on the stocks you're looking to buy, sell, or hold. Hey, you can even check out my own personal rating to see whether you want to take this article seriously.
Tim Hanson does not own shares of any company mentioned. The Motley Fool has a disclosure policy.
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