This Just In: Upgrades & 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 worst and sorriest, too.

And speaking of the best...
Who would have thought that movies could be more exciting than a rollercoaster? Over the past month, we've watched shares of DVD-by-mail king Netflix (NASDAQ:NFLX) soar 14% in value, then crash 10% in the wake of Wednesday's earnings news. Given the stock's herky-jerky ways, it's probably no surprise that shares have now reversed course yet again, leaping 2.5% as of this writing on the back of an upgrade from stock-picking superstar Banc of America.

While acknowledging that Netflix faces margin pressure and increased competition from Blockbuster (NYSE:BBI), that its churn rate is up, and that its subscriber growth expectations are down, B of A thinks that most of this bad news has already been priced into the stock. As a result, the analyst sees limited downside at this point, and it's upgraded Netflix to a neutral rating.

Having covered the brokerage house several times already in this column, I won't go into great detail on its record. Regular readers will already know that B of A has a rep as one smart cookie, helped by such picks as:

And despite such picks as:

You may not know that B of A has a darn good track record when it comes to Netflix in particular. By recommending that investors sell the stock back in December, B of A managed to outperform the S&P 500 by 23 percentage points over the last four months. That's a record worth heeding.

Speaking of records, if you'd like to see who beats even Banc of America in sizing up Netflix, check out Netflix's CAPS page, where you can learn the identity of the current score leader.

And for a real visionary's view of the company, don't forget to claim your free trial subscription to Motley Fool Stock Advisor, where you can read multiple write-ups on the company from Fool co-founder David Gardner.

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 250th out of more than 27,000 raters. Fannie Mae is an Inside Value selection. Banc of America's parent company is a Motley Fool Income Investor pick. The Fool has a disclosure policy.