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 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 ...
It's been nearly five months since RBC Capital Markets initiated coverage on high-tech glass spinner Corning (NYSE: GLW) with a "sector perform" rating. Five months, during which the shares have surged upwards 16.4% to reach the analyst's $26 price target. And so it was that, yesterday, RBC saw fit to change its stance on Corning.

Citing a "demand outlook for Corning's display glass [that] continues to strengthen" and, indeed, "outstrip supply," RBC argues that Corning's surge is far from over. Sales at retail sellers of LCD TVs such as Best Buy (NYSE: BBY) and Circuit City (NYSE: CC) are termed "healthy." And just yesterday, LCD panel maker and key Corning customer AU Optronics reported stronger-than-expected March sales. Put it all together and shake gently (LCDs are fragile), and RBC comes up with an "outperform" rating on the shares, which it expects to top $30 within a year.

But just how accurate is RBC on these things? After all, while the analyst was fence-sitting the past half-year, it missed out on 22% worth of market outperformance at Corning (the S&P 500 is down 5.2% since November 2007). To find out whether RBC rates A-OK, despite this oversight, we'll take a look at the analyst's record on CAPS.

Let's go to the tape
What we find there is an analyst as equally likely to be right as wrong in its picks, with an accuracy record hovering around 50%. (On the other hand, when RBC is right, it's generally so much right that its correct guesses outweigh its losers, lifting the analyst well into the top 20% of investors.) Surveying a couple winners and losers in industries related to Corning, we find RBC endorsing:

Company

RBC Said:

CAPS Says

(5 max):

RBC's Pick Beating S&P by:

Ciena  (Nasdaq: CIEN)

Outperform

***

25 points

Ceragon (Nasdaq: CRNT)

Outperform

*****

65 points

... but also:

Company

RBC Said:

CAPS Says

(5 max):

RBC's Pick Lagging S&P by:

Sigma Designs

(Nasdaq: SIGM)

Outperform

*****

60 points

Jabil Circuit (NYSE: JBL)

Outperform

***

48 points

Summarized, what these results tell me is that RBC does a whole lot better analyzing telecom equipment makers than it does TV components manufacturers. So you'll understand when I say I'd have a whole lot more confidence in RBC's upgrade if it had been based on expectations of outperformance in Corning's fiber optic business, rather than on the LCD glass side.

Moreover, I just don't see the same value in Corning's share price that RBC appears to. Selling for 19.5 times earnings after the recent run-up, the shares appear to trade at a premium to long-term growth expectations of 16.5% per year. Add in my long-standing reservations about how Corning's free cash flow fails to measure up to what it reports as net profit under GAAP (free cash flow is less than half Corning's accounting profits), and I'm afraid I must break with RBC on this one.

Corning may not be so overpriced as to justify a "sell" rating today, but a "buy?" Hardly.

Best Buy is both an Inside Value and Stock Advisor recommendation. Ceragon was chosen by Motley Fool Hidden Gems, and Sigma Designs by Rule Breakers. Try any newsletter free for 30 days to see which investing style fits you.

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 No. 887 out of more than 95,000 players. The Fool has a disclosure policy.