Before the Call: Waiting for Wachovia

As yet another earnings season gets under way, the big bankers are queuing up to report their Q1 performance. Citigroup (NYSE:C) and Wachovia (NYSE:WB) blaze the trail on Monday, followed in rapid succession by such additional blue-chip names as M&T, SunTrust (NYSE:STI), Washington Mutual, and Wells Fargo. Grab your passbooks and fasten your seat belts, folks. It's going to be a busy week.

Let's start with Wachovia. We'll have time aplenty to dissect the news after the bank reports. But in these few hours before we begin obsessing over its short-term progress, let's take a moment to review what investors think about this bank as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 26,000 investors for their views on well over 4,000 companies, Wachovia among them. Here's what Fools have to say about it.

Up or down?
Nearly 300 investors have submitted ratings on Wachovia. The verdict: not good.

Overall, 92% of CAPS investors think the bank will outperform the market. But when we poll the very best investors -- those designated as "All-Stars" on CAPS by virtue of their outperforming 80% of their peers -- the endorsement wobbles a little, dropping to 88%. Both those numbers are good -- but based in part on the records of the raters, they're not good enough to win Wachovia more than a pair of stars (out of the five possible under the CAPS rating system).

In comparison to its peer group on CAPS, Wachovia sits squarely in the middle of a generally unloved industry:

Wall Street vs. Main Street
In contrast, when you ask the investors who supposedly know the most about investing -- Wall Street analysts -- Wachovia gets generally high marks, higher even than our lay investors on CAPS give it. Discarding the nine hold ratings and focusing on those analysts holding an opinion worth having, the vote goes 15-to-1 in favor of Wachovia outperforming the market.

And yet, if you examine the stock's performance over the last 52 weeks, you'll see that it has so far failed to measure up to the professionals' optimism, underperforming the S&P 500 by more than 16 percentage points.

Brass tacks
Are the 26,000-odd lay investors, most of us lacking CFAs, better judges of Wachovia's character than the Wall Street Wise Men? Or have our impressions been swayed by the bank's recent underperformance? Read what our investors have to say, and judge for yourself.

Bull pitch
The top-rated pitch for Wachovia on CAPS, submitted by a highly rated All-Star investor, lauds Wachovia for its "HIGH DIVIDENDS, lots of insider ownership, [and] fantastic fundamentals," concluding that "[a]s long as they play and tell it straight, Wachovia will continue to thrive."

Bear pitch
The bearish camp cites two main factors as weighing on Wachovia: continued fallout from the subprime mortgage mess, and lending profits compressed by a yield curve tighter than the latex suit Rebecca Romijn wore in X-Men.

Who said that?
To learn the identities of the wise Fools who penned these words, and explore the plethora of additional financial data we've put together on the company, just click here.

Bank of America and Washington Mutual are Motley Fool Income Investor recommendations.

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 228th out of well over 26,000 raters. The Fool has a disclosure policy.