This Just In: Upgrades & Downgrades

At The Motley Fool, we have our fun with the Wall Street analysts.

We mock their pinstripe-and-wingtip attire. Their multimillion-dollar bonuses. And, not unrelated, their failure to recognize the tech bubble -- or, worse, their recognizing it, and then putting lipstick on the pig and pimping it to the individual investor. What's more, their ceaseless stream of upgrades and downgrades, sometimes on one and the same stock and just days apart, make Jim Cramer look like a poster boy for the "long-term buy-and-hold" movement.

Thus, it may look a bit out of place for us to introduce this newest occasional feature: "This Just In." Here, I'll be taking an ad hoc magnifying glass to some of the hottest analyst upgrades and downgrades of the hour.

Isn't that a little hypocritical?
Guilty as charged -- if that were all I'd be doing. Because the fact of the matter is that an analyst's upgrading or downgrading a stock means little when viewed in isolation -- all the more so when you consider the heft of the firms doing the "analyzing." When a Bank of America or a JPMorgan Chase(NYSE: JPM) issues a downgrade, the mere publication of the news often suffices to spark a selloff, thereby "proving" the analyst right -- in the short term.

What's more significant is the analyst's record over the long term. And that's what we'll be focusing on in this column.

Mr. Market? Meet Mr. CAPS.
With the debut of Motley Fool CAPS, the Fool's new tool for rating everything from stocks to investors to analysts to the long-term durability of the Toyota Corolla (give us some time on that last one), we're taking a magnifying glass not just to the short-term meanderings of Mr. Market's mind. With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
Yesterday, Swiss money mogul Credit Suisse upgraded the stock of sportswear-maker Under Armour (NYSE:UA) to a "buy" rating-equivalent. According to CS, Under Armour is destined to become "one of the premier global athletic brands," growing its revenues and profits "for the foreseeable future." While acknowledging that the stock carries a lofty price tag, CS thinks Under Armour will command higher margins and deliver "better returns" for investors than more moderately priced sportswear makers such as Adidas and Nike (NYSE:NKE).

But does Credit Suisse know what it's talking about? Let's turn to CAPS to find out. There we see that CS's analysts command a combined rating of 99.89, putting the firm in the top 1% of CAPS players. What's more, the firm's 66.67% accuracy rating means its calls turn out to be right twice as often as not. Reviewing the firm's recent recommendations, here are a few of the companies that have helped to earn CS the coveted rank of "CAPS All-Star":

And one that's held the firm back:

Credit Suisse -- or rather, its avatar on CAPS -- is rapidly building up a reputation as one smart stock picker. But perhaps that's not surprising, coming as it does from a nation in which you can't throw a brick without hitting an investment banker (by the way, the Swiss frown on that). But here's something that may surprise you:

Five months ago, while Credit Suisse was still making up its mind on Under Armour, David Gardner and the happy-go-lucky crew at Motley Fool Rule Breakers went out on a limb and recommended the stock to our subscribers. Since then, Under Armour has since increased 22%, beating the market by nearly 8%. To learn what other stocks we like -- and which stocks Credit Suisse just might decide it likes, too -- take a trial of the Rule Breakers service. Just like playing CAPS, the trial is entirely free.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 36 out of more than 20,000 raters. Suntech Power is a Rule Breakers pick. Bank of America and JPMorgan are both Income Investor choices. The Fool has a disclosure policy.