This Just In: Upgrades and Downgrades 

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At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

The Macworld is ending
Oppenheimer has had enough. Jarred into action by Apple's (Nasdaq: AAPL) announcement that Steve Jobs will not be attending next year's Macworld convention, and that the company itself is ceasing participation effective 2010, the analyst finally downgraded the stock to neutral this morning.

Needless to say, between Apple's news, and Oppenheimer's reaction thereto, the shares collapsed this morning, down 6% as of this writing. But is the sell-off deserved?

Let's go to the tape
I have to say that the picture is exceedingly unclear here. On the one hand, you see, Oppenheimer ranks in the bottom 20% of investors tracked by CAPS. This banker gets only about 45% of its picks right, with particularly large losses in the semiconductor sector:

Company	Oppenheimer Said:	CAPS Says (5 max):	Oppenheimer's Pick Lagging S&P by:
SiRF Technology  (Nasdaq: SIRF)	Outperform	***	61 points
Micron Technology  (NYSE: MU)	Outperform	***	37 points
Marvell Technology  (Nasdaq: MRVL)	Outperform	****	22 points

On the other hand, the analyst does get some things right -- and a few of these right guesses seem particularly relevant to this morning's downgrade:

Company	Oppenheimer Said:	CAPS Says (5 max):	Oppenheimer's Pick Beating S&P by:
Motorola (NYSE: MOT)	Underperform	**	16 points
AT&T (NYSE: T)	Outperform	****	17 points
Nokia (NYSE: NOK)	Outperform	****	15 points

Take note, Fools: That's one telecom whose fortunes are tied to Apple's iPhone, and two of Apple's mobile device competitors -- and Oppenheimer called all three of 'em right.

Meanwhile, on the third (?) hand, it bears mentioning that while Oppenheimer has done well predicting the fortunes of Apple's rivals, its record on Apple itself doesn't look so hot. Since the analyst recommended buying Apple in May, the stock has been cut in half -- and while, yes, everything seems to be down these days, Apple did particularly poorly, underperforming the rest of the stock market by a good 14 percentage points.

Confused yet?
I know I am. Oppenheimer's performance is all over the map here: It's got a poor track record in general, a pretty decent one on mobile devices in particular, but by the time we circle back to Apple, the news is bad once again. What's a Fool to make of this analyst when it opines that: "Until such time [as Apple becomes more open about Steve Jobs' health or a succession plan], we can no longer continue to recommend Apple as a long-term investment."

For my part, I have to say that Oppenheimer's downgrade has the feel of a fit of pique. The analyst saw an undervalued stock in May, called it as such -- and has lost nearly 50% of its (virtual) investment for no good reason. Oppenheimer seems to blame Apple's tight-lipped ways for at least part of its losses, and is today throwing a tantrum -- and throwing in the towel.

Foolish takeaway
Personally, I think that's a mistake. The way I look at this, if Apple was a "buy" in May, it's even more so today. I mean -- come on, people! Apple generated $8.5 billion in free cash flow over the past 12 months. Net out the cash the company has already amassed, and Apple's business is selling for barely seven times free cash flow. Yet almost anybody you ask on Wall Street will tell you that, long term, Apple's going to grow at nearly 20% per year. Why, even if the analysts are off by a factor of two, the stock still seems dirt cheap, at least to me.

If that's not a great "long-term investment," I simply don't know what is.