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." Today, we'll show you whether those bigwigs actually know what they're talking about. To help, we've enlisted Motley Fool CAPS to track the long-term performance of Wall Street's best and worst.

And speaking of the best...
On Friday, as most investors were getting ready to slip away for a peaceful weekend devoid of stock market losses, the analysts at Raymond James found time to toss out one final recommendation. And just who was that lucky stock to get the RJ seal of approval? FedEx (NYSE: FDX).

I suppose we shouldn't be too surprised. After all, Raymond really just took a page from its own playbook, and the upgrade it gave FedEx rival UPS (NYSE: UPS) a week ago. But here's the thing: Whereas RJ's recommendation of UPS made a whole lot of sense, its latest endorsement doesn't.

To see why, you have to look at the numbers. Sure, on one hand, FedEx looks like quite a bargain. Priced under 14 times earnings, it looks about 30% cheaper than UPS, which trades at 20 times earnings. Combine this with the fact that most analysts expect FedEx to grow faster than UPS, and of course Raymond would think FedEx is cheap.

And yet, a closer examination shows that these two companies differ greatly where it really counts: on the cash flow statement. Over the past year, UPS generated $5.9 billion in total free cash flow. That's more than 50% -- or $2 billion -- better than the $3.9 billion it claimed as "net income" under GAAP. For its part, though, FedEx generated less than $1 billion in free cash ($924 million, to be precise) -- or less than half its claimed $2 billion in net income.

Viewed in this light, FedEx looks pricey at more than 28 times annual free cash. What's more, this is no isolated instance. In fact, FedEx's income statements pretty consistently overstate true cash profits. In four of the past five years, free cash flow at the company has come in significantly lower than reported income. UPS, meanwhile, reported better free cash flow than it claimed as net income in three of the past five years.

Raymond James loves all its kids equally... but you shouldn't
Now, does all this mean FedEx is a horrible company? Of course not. It might not even turn out to be a horrible investment.

Over the past few weeks, we've seen both eBay (Nasdaq: EBAY) and Amazon.com (Nasdaq: AMZN) announce earnings that confirmed the strength of online retail -- a key market for both UPS and FedEx. Last quarter, eBay reported a whopping 29% spike in quarterly sales. Amazon did even better -- 35% growth. And seeing as FedEx and UPS have the international and domestic fast-transport markets basically split between them, there's little risk of competition upsetting the duopoly, and there's plenty of profits to go around for both.

To the extent that investors stop at this point and don't think beyond the argument that consumption trends look strong, and that's good news for both FedEx and UPS... well, Raymond James' recommendation to buy both companies may then work out just fine. But this doesn't mean the two companies are created equal. It doesn't mean there's equal profit awaiting investors who invest in each of them.

Simply put, you're better off buying UPS at 12.6 times the cash it earns in a year than you are spending more than twice that amount to own a share of FedEx. That's why I've publicly recommended UPS on Motley Fool CAPS (and am doing so again today), and why I won't be recommending FedEx anytime soon. But if you're looking for more diversification in your portfolio, we do have other ideas for you, besides FedEx. Read the Fool's new report, and learn about "3 American Companies Set to Dominate the World." The report's free today, but it won't be for long -- so click quick.