It's no secret that Wall Street stinks -- and in a lot more ways than one. There's enough greed, misrepresentation, and outright fraud going around on the Street that even Pepe Le Pew and Oscar the Grouch would be disgusted.

Wall Street's professional analysts haven't exactly helped the situation, either. In fact, they've perpetuated many a scandal by blindly cheering alongside shady management teams, despite obvious warning signs.

Professional what?
Whether they're too conflicted, too optimistic, too caught up in protecting their jobs, or just too wrong, professional analysts don't inspire as much awe as they once did.

But that doesn't mean they're all bad.

Many analysts are savvy stock pickers. In fact, The Wall Street Journal celebrates the best analysts and the best calls across industries annually. Even so, there's simply not enough transparency in the industry to know just who the best and worst analysts are. That's bad for the good analysts; they're unwittingly protecting the sheep.

Until now ...
Enter Motley Fool CAPS, our brand-new community-intelligence database, which tracks the outperform and underperform ratings that both individual investors and pros put on stocks. In turn, every stock and every investor earns a rating.

Yes, you read that correctly: Every investor is rated. That means we can finally answer the age-old question: Which analysts are better stock pickers than my grandmother?

For example, Charles Payne, the chief analyst of Wall Street Strategies, may not be. According to our data source, he is among the bottom one-fifth of all portfolios currently participating in our service.

However, a number of firms have proved themselves exceptional stock pickers since added their data to CAPS. Last week, for example, we highlighted some of the impressive calls that Janco Partners -- now the third-ranked analyst in CAPS -- has been piling up in the game.

Bet with the best
Yet another savvy pro is Jefferies Group, a New York-based firm that focuses on mid-cap growth companies.

As of this writing, Jefferies is currently ranked 65th overall in CAPS (and fifth among professional analysts), having crushed the market since last August with 60% accuracy.

A ranking of 65 probably won't win you much fanfare on the NASCAR circuit, but with 19,000-plus participants in CAPS, Jefferies has a score that puts it ahead of more than 99% of other investment portfolios.

The sweetest calls
The firm's recent big winners include Level 3 Communications (NASDAQ:LVLT), Leap Wireless (NASDAQ:LEAP), and F5 Networks (NASDAQ:FFIV) -- all of which are up more than 30% since September.

If you're looking to ride those coattails on some newer picks, however, be aware that the firm also recently rewarded outperform ratings to Endo Pharmaceuticals (NASDAQ:ENDP), Argon ST (NASDAQ:STST), and Spirit Aerosystems (NYSE:SPR).

Street wisdom worth using
By simply examining these recommendations, we should be able to learn some key investment lessons from one of Wall Street's best.

For example, you might have noticed that a large portion of Jefferies' gains have come from the telecommunications sector -- a sector that should see continued double-digit growth from emerging markets and an upgrade to third-generation (3G) technology. That's no accident.

According to the company's website, Jefferies' analysts focus on "identifying emerging industry themes and trends behind the numbers, not on maintenance research." What this means is that the firm looks for timely catalysts -- whether industry trends or corporate actions -- that should propel its picks higher (and faster) than the market as a whole. So far, it's worked like a charm.

Although I'd be the last Fool ever to advocate a top-down approach to picking winners, it's hard to argue against Jefferies' track record. The firm was ranked #2 in the Wall Street Journal's "2005 Best on the Street" survey and was also named a Top 10 firm in the 2004 StarMine Analyst Awards.

Stay small
Another reason for Jefferies' success is that it tends to stay away from larger, mega-cap stocks -- you know, the ones Wall Street loves to hawk. More than 60% of the companies that Jefferies covers have a market cap under $2 billion, and as fellow Fool Tim Hanson mentions, smaller-cap stocks simply have the best potential to turn into some of the market's best.

For example, Jefferies' all-time best selection in CAPS, Halozyme Therapeutic (AMEX:HTI), was valued at approximately $195 million when it was first recommended just over a month ago. Today, the biopharmaceutical company is worth $515 million, representing a move of more than 160% -- not to mention plenty of CAPS points.

It's picks like that -- backed by a proven track record and CAPS ranking -- that make Jefferies at least one Wall Street firm worth studying.

Warning: Past performance does not guarantee future results
Of course, the caveat here is that we've only been tracking Wall Street picks for a few months now. While we can't yet call the data predictive, it's at least very interesting to examine.

If you'd like to take a look at the rest of Wall Street's best and worst analysts and their stock recommendations, click here to join the CAPS community absolutely free. You can also get all kinds of opinions on the stocks you're looking to buy, sell, or hold.

And hey, you might even find yourself surpassing some of Wall Street's best and brightest in no time.

The financial community has been opaque for too long. CAPS can change all that.

Foolish contributor Brian Pacampara only likes to inhale funny odors if they're coming out of the kitchen. He holds no position in any of the stocks mentioned. The Fool's disclosure policy always smells like roses.