The temperature is noticeably warmer since the last time Merrill Lynch (NYSE:MER) stepped to the plate to announce quarterly results, but the concerns investors are harboring are very similar. Though Lehman Brothers (NYSE:LEH) managed to post some nice results last month, other investment banks, including Goldman Sachs (NYSE:GS) and Bear Stearns (NYSE:BSC), weren't able to impress investors to the same extent. The big problem right now? Come on, you know it, say it with me: subprime.

After the earnings are released, we'll have a better idea of how Merrill has managed the situation. But before that happens, let's step back and take a look at what investors think about the company as a long-term investment. To gain this insight, I've tapped into Motley Fool CAPS, where more than 60,000 investors have joined together to offer their thoughts on over 4,700 companies, Merrill among them. Here's what Fools have to say about the company.

Up or down?
The 349 investors who have weighed in on Merrill Lynch have not been overly impressed with the stock.

Merrill has ended up with a two-star rating out of a possible five. Eighty-five percent of all players who have rated the company have given it the thumbs-up. When it comes to the CAPS All-Stars -- those investors in the top 20% of all CAPS players -- the stock was approved by a similar 85% of players.

Among comparable companies, Merrill is at the rear of the group.


CAPS Rating (out of 5)

Goldman Sachs


Credit Suisse (NYSE:CS)


Deutsche Bank (NYSE:DB)


Morgan Stanley (NYSE:MS)


Bear Stearns


Lehman Brothers


Merrill Lynch


Wall Street vs. Main Street
Wall Street seems to see things differently than the CAPS community. Of 19 analysts following the stock, 16 think investors should consider buying Merrill. Three analysts say to hold the stock, and not a single analyst is recommending selling. Jim Cramer, the man with an opinion on just about every stock, has also given Merrill a thumbs-up.

Over the past year, the stock has underperformed the S&P index by about one percentage point. The stock has noticeably lost some steam recently, dropping 7% since the beginning of June.

Bull pitch
CAPS All-Star Jeffreyw is one of the Merrill bulls and shared back in March that he's "long all of these financial companies as they have been overlooked in recent months. P/E's are low at 10-11, but earnings are rising."

Bear pitch
On the other side of the table, recent Merrill bear BlueStarLikes believes that "either a recession and/or sharply higher interest rates are in store shortly as U.S. Dollar declines in currency value. Over-hyped and overexcited valuations for brokerages after multi-year bull market."

The Foolish last word
With a fine history and a great wealth management division, Merrill is certainly a good company. But good company or not, Merrill, like the other investment banks, is exposed to both the direct effects and the aftershocks of the subprime meltdown. Merrill's earnings report will give us a good look at how it has been handling a deteriorating environment.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy had a page on MySpace, but got kicked off when it became more popular than Tom.