This Just In: Upgrades and Downgrades

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 tell you what the analysts said and stop there. No, we're here to hold Wall Street to account. We're going to tell you what the analysts said ... and then show you whether they know what they're talking about. Helping us in this endeavor will be Motley Fool CAPS, our tool not only for rating stocks, but also for rating the analysts who rate stocks. 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 ...
Today has been a good day to own Nasdaq-listed companies named "Hansen." The two most famous, Hansen Medical (NASDAQ:HNSN) and Hansen Natural (NASDAQ:HANS), both earned "buy" ratings from Wall Street this morning. Robo-doc maker Hansen Medical got its endorsement from Oppenheimer, which initiated coverage with a "buy." Meanwhile, across the hall, Hansen Natural was getting an upgrade from Goldman Sachs, which thinks the maker of the Monster Energy drink, too, is a buy.

Media reports on the Hansen Medical initiation aren't clear on why, exactly, Oppenheimer likes the stock. But as we recently learned, this is a bit of a contrarian position on Wall Street -- even as it's a most popular position indeed among Foolish investors. Nine out of 10 Fools rate the stock an outperformer on CAPS.

We've got more details on the Hansen Natural upgrade, however. According to an Associated Press story on the move, Goldman Sachs sees several factors weighing in Hansen Natural's favor: new product introductions that will facilitate growing sales, such as the company's Java Monster drink; a popular "image and functionality" among consumers, which permit Hansen Natural to charge premium prices for its products; and, of course, in this age of private equity, the ever-present possibility that someone will buy out Hansen Natural at a premium.

Let's go to the tape
Of course, knowing the logic behind an analyst's rating is only half the battle. Analysts can spin facts so easily as to make a PR professional blush, and their arguments always sound logical at the time. As investors, we want to know the records behind the rhetoric -- just how well do these guys' predictions play out in practice? We turn now to Motley Fool CAPS for a glimpse at each analyst's record.

Beginning with Oppenheimer, this firm's medical equipment-related picks include:

For its part, Goldman has made the following consumer-product picks, relevant to its Hansen recommendation:

While the stocks chosen for these tables are representative in nature, they do give a pretty accurate reflection of each of these analysts' records as we track them on CAPS. Oppenheimer is clearly the weaker player here, with a sub-All-Star CAPS rating of 74.43, and a record of picking losers slightly more often than winners.

In contrast, Goldman boasts a 90.44 CAPS ranking -- not good enough to put it in the ranks of "Wall Street's Best," but at least better than Oppenheimer. Similarly, its accuracy score of 53% won't win it a place under a magnet on the family fridge -- but at least Goldman is more often right than wrong.

Foolish takeaway
Long story short -- if you absolutely, positively, must own a Hansen today, it seems to me that you're better off picking the drink over the robotic catheter manipulator. But tastes may differ.

To learn more about how CAPS works, and how we work up these numbers, start here.

And to discover a robo-doc that Fools like even more than Hansen Medical, pick up a free trial of Motley Fool Rule Breakers, and learn how we tripled our investment in Intuitive Surgical in just two years' time.

Fool contributor Rich Smith does not own shares of any company named above. You can find Rich on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 580 out of more than 30,000 rated players. The Fool has a disclosure policy.