This Just In: Upgrades and Downgrades for Boeing

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 unrelatedly, 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.

As such, 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 was 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 major brokerage firm issues a downgrade, the mere publication of the news often suffices to spark a selloff and "proving" an 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 ...
Early Monday morning, megabank Wachovia downgraded the stock of Boeing (NYSE:BA) to "market perform" from the "outperform" rating it has maintained since September 2005. Big-picture, Wachovia thinks the cyclical commercial-aircraft business has hit the top of its latest cycle and left little upside to companies in this sector. And on a more micro level, Wachovia's security arm also cited sources "deep within Boeing's supply chain" suggesting there could be delays in bringing the plane-builder's new 787 to market, which if true, would give a much-needed breather to rival, Airbus.

On the other hand, these sources apparently made a point of saying that the suppliers want more money from Boeing -- so there's always the possibility that this scuttlebutt is less about anticipated delays and more about negotiating for a bigger piece of Boeing's growing profits pie. So is Wachovia getting snookered, or are Boeing shares truly in for some turbulence in the coming year?

Judging from Wachovia's past performance on Boeing, I'd think twice before dismissing Wachovia's concerns. Over the past 16 months, Wachovia's Boeing call has outperformed the S&P soundly, and it's unlikely that the bank beat the market 38% to 16% out of sheer luck. Moreover, Wachovia's shown itself to be a savvy stock picker, as illustrated by its combined CAPS rating of 98.67, which puts the firm's security arm in the top 2% of CAPS players. Let's review some of the firm's recent recommendations, which we're tracking in CAPS. Here are a few of the companies that have helped to earn Wachovia the coveted rank of "CAPS All-Star":

And a couple that have held the firm back:

Wachovia made an extraordinarily bad call in endorsing Nuvelo, but it wasn't the only one to do so. Out of 120 players who've rated the stock on CAPS, 113 investors currently rate it an "outperform." Meanwhile, Wachovia has shown itself a much better judge of character on Boeing's stock. And overall, Wachovia's history of calling things right better than 63% of the time suggests that investors should think carefully before betting that Wachovia is wrong this time.

To learn who else Wachovia likes -- and doesn't -- just click here.

Or, see what else CAPS has to offer by clicking here.

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 30 out of more than 20,000 raters. TXU is a Motley Fool Income Investor pick. The Fool has a disclosure policy.