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 ...
In one of those quirks of "logic" that only makes sense to Wall Street bankers, UBS upgraded Time Warner (NYSE: TWX) to "buy" yesterday ... and at the same time downgraded its target price from $21 a share to $19. But I have to admit, while UBS's contradictory moves have me a bit bemused, the logic it uses to reach them sounds rock solid.

Citing Time Warner's "industry-low exposure to advertising," UBS argued that any recession-spawned slowdown in advertising spending should have only a limited effect on the media giant. That's a real concern these days, after: (1) the sudden reversal of News Corp.'s (NYSE: NWS) plans to move WSJ.com to an advertising-supported model, and (2) the ad scare that Google (Nasdaq: GOOG) gave us just a couple weeks ago.

Praising the company's "film and television studios and HBO network," UBS sees "above average revenue and cash flow growth" in Time Warner's future. UBS predicted the company will ultimately spin off AOL to free itself from that sickly albatross, and focus its efforts on the sphere where it has a competitive advantage: Content creation.

Let's go to the tape
You know the drill by now. We've seen UBS's arguments. Now it's time to examine the analyst's record. What we find is that UBS maintains its position in the top 10% of CAPS players, getting about 53% of its picks right. For example:

Company

UBS Said:

CAPS Says (5 Maximum):

UBS 's Pick Beating S&P by:

Apache (NYSE: APA)

Outperform

*****

60 points

Chesapeake Energy

(NYSE: CHK)

Outperform

*****

28 points

Disney (NYSE: DIS)

Outperform

****

6 points

Pretty good energy stock picker, huh? And UBS also called media magnate Disney right. But take a gander at how it's done with a few other big media picks ... and a subsidiary of Time Warner itself:

Company

UBS Said:

CAPS Says:

UBS 's Pick Lagging S&P by:

Time Warner Cable

Outperform

**

34 points

CBS (NYSE: CBS)

Outperform

**

11 points

News Corp.

Outperform

****

8 points

A bit less impressive on those, then. On balance, I'd say things are not looking good for UBS's Time Warner endorsement. While the analyst's record overall is good, and its arguments in favor of Time Warner sound, I'm more than a little worried by how badly UBS has acquitted itself in the realm of big media.

On the other hand, I certainly see where UBS is coming from on this one. Time Warner sells for an entirely reasonable price today -- 14 times trailing earnings, with analysts projecting 14% annual profits growth. For the record, the firm generates somewhat less free cash flow than it reports in net earnings, so its price-to-free cash flow multiple looks a bit worse.

Foolish takeaway
For my part, I'm going to pass on Time Warner today. Frankly, given the above record, UBS's endorsement looks like the mark of death to me. The fact that the stock's valuation is merely reasonable today doesn't really encourage me, either.

Wake me when the stock price drops from "entirely reasonable" to "downright cheap," and I'll take another look.

Both Disney and Time Warner are active recommendations in Stock Advisor. See what other companies have been recommended with a free 30-day trial. Chesapeake Energy is a choice in Inside Value.

Fool contributor Rich Smith does a halfway decent job of stock picking, on those rare occasions when we can find him awake, and is ranked No. 679 out of 83,000 investors in CAPS. You can find him there, publicly pontificating under the handle TMFDitty. He does not own shares of any company named above. The Fool has a disclosure policy.