At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycles 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 ...
It seems everybody who's anybody in the investment game has an opinion on Texas Instruments (NYSE:TXN) these days. More specifically, this day -- when half a dozen of Wall Street's finest took the semiconductor maker's Q3 earnings report as an excuse to weigh in with upgrades and downgrades. Credit Suisse, Jefferies, JP Morgan, Lehman Bros., and UBS departed the bull camp early this morning, changing their respective ratings to various variations of "hold." Heading in through the out door was Caris & Company, joining hands with Bear Stearns in upgrading TI to "buy."

What's an investor to make of all the comings and goings? At the risk of oversimplifying, the arguments can be summarized as follows: The ex-bulls / not-yet-bears were all shook up over TI's "missing" earnings and its guiding to flat revenues in Q4. They fear that TI is losing market share, and with it, both sales volume and the economies of scale that come with. (To which the still-bullish Bear and Caris respond that gross margin improvements and cost-control efforts will offset any share TI loses, permitting profits to meet targets for the year.)

Who's right, and who's wrong? For clues to the various stock pickers' acumen in, well, picking stocks, let's examine their records.

Best Active Pick

Pick Beating S&P by:

CAPS Rating



Excel Maritime (NYSE:EXM)

417 points



Credit Suisse (NASDAQ:PCLN)

114 points




Research In Motion (NASDAQ:RIMM)

161 points



JPMorgan Chase 

Exterran Holdings (NYSE:EXH)

232 points



Lehman Bros.

National Oilwell Varco (NYSE:NOV)

158 points



Bear Stearns

Aegean Marine Petroleum (NYSE:ANW)

181 points



Caris & Co.


107 points



What we have here are five All-Star investors -- two of which rank among "Wall Street's Best" -- voting with their feet as they abandon TI. Against them are arrayed just two investors, only one of which is an All-Star. And rather than being convinced to change their ratings in TI's favor, these two are more doubling down on what now looks to be a bad call (Bear reiterated its "buy" rating; Caris just moved TI up a notch from "above average" to "buy.")

Foolish takeaway
The analysts' records speak for themselves -- the clear weight of experience is against TI today.

As for the substance of the arguments behind the ratings, well, remember the adage, "It never rains, but it pours"? In my experience, bad news tends to give rise to more bad news. I won't be at all surprised if, having disappointed the Street once yesterday, TI does so again in three months. So while the company's valuation does look attractive with a P/E of 19 balanced against 19% projected profits growth, I have to wonder how that relationship will look if more analysts begin dialing down their expectations for the future.

Got an opinion on TI? We've got a place to voice it: Motley Fool CAPS: It's fun, it's free, and it might make you famous.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.