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 simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. 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 ...
On Monday, the stock mavens at UBS upgraded shares of discount airliner JetBlue (NASDAQ:JBLU) from "reduce" to "neutral." As for UBS's reasoning, it falls under the category of "damning with faint praise." Quoth the bankers: "We expect JetBlue to underperform its peers but to benefit from a sector summer tailwind."

Such diplomats, those Swiss. In less polite language, what they're really saying is "JetBlue is a lousy airline, but when investors start thinking of vacationing this summer, they're likely to start looking at airline stocks. We're betting they'll buy a few shares of JetBlue in the process, if only by accident." Put it that way, and I think you can understand why UBS pulled the airbrakes on its upgrade at "neutral," rather than actually encouraging people to buy JetBlue.

But is even that reluctant endorsement really reason enough for investors to turn optimistic on the "we've got leather seats, and DirecTV" airline? For clues to UBS's prescience, we asked Motley Fool CAPS to examine the firm's record. Here's what we found.

Among professional stock jocks, UBS ranks pretty highly. Not quite in the stratosphere of "Wall Street's Best," but its CAPS ranking of 95.72 is perfectly respectable, enough to place the firm in the top 5% of players, both everyday investors who actively participate and the professionals we track.

How did it earn this ranking, you ask? Through making savvy picks such as:

And what's been keeping it out of the ranks of Wall Street's Best? Sell calls like these:

Mind you, the above are just a bare half-dozen out of the 343 separate stock recommendations we've tracked for UBS over the past half-dozen or so months. They're intended as examples only -- so don't go thinking, for example, that whenever UBS tells you to sell something, it's the wrong call.

Case in point: When last we heard from UBS, the firm was telling us to sell JetBlue. That was back in November, and since then, UBS's sell call has outperformed the S&P 500 by a good 18 points. Not bad -- and suggestive that the firm knows what it's talking about when saying it "sees some upside" to JetBlue's shares today.

Speaking of which, UBS isn't alone in that view. In February, Motley Fool Stock Advisor co-lead analyst David Gardner sent a note to our subscribers in the wake of JetBlue's storm-tossed weekend at JFK -- a farce on par with Weekend at Bernie's. As badly as JetBlue handled the fiasco -- which CEO David Neeleman said "humiliated and mortified" him -- (our) David reminded investors that "JetBlue continues to be one of the few customer champions in its industry. It does so many things right that its extremely infrequent disappointments tend to stand out. ... That is why I believe that JetBlue is a very timely buy right now. You're picking an attractive short-term entry point for what I believe will be a strong long-term growth story."

So there's two endorsements for you -- one rather backhanded, the other fair to bursting with enthusiasm. But if you're in need of a third, head on over to CAPS, and check out what the score leader on JetBlue has to say about it. "Who's that," you ask? Follow this link to find out.

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 ranked 41 out of more than 25,000 raters. JetBlue is a Stock Advisor pick. The Fool has a disclosure policy.