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 ...
On Monday, one of the biggest names in stock-picking endorsed the biggest name in online auctions. After taking a good, hard look at eBay, Stifel Nicolaus upgraded eBay (NASDAQ:EBAY) to "Buy it now."

Are these guys crazy?
Maybe, maybe not. Although eBay's trailing price-to-earnings ratio of 90 looks expensive relative to growth expectations for this year and next, keep in mind that its more normal, forward-looking 2009 P/E sits at around 15. Stifel thinks that new marketing initiatives will renew the vigor of this erstwhile hypergrowth stock. Citing eBay's "Best Match" sorting technology for sellers, and its collaboration with Microsoft (NASDAQ:MSFT) to offer buyers cash back on their purchases, Stifel thinks eBay will beat back Google's (NASDAQ:GOOG) threatening approach into the online retail space.

Let's go to the tape
I think (NASDAQ:AMZN) poses the bigger threat to eBay's business, but maybe I'm mistaken. Stifel does have a pretty decent record, after all. It ranks near the top 10% of stock pickers, helped in large part by picks such as:


Stifel Said:

CAPS Says (out of 5):

Stifel's Pick Beating S&P By:




222 points

Foster Wheeler (NASDAQ:FWLT)



207 points




147 points

And Stifel's no slouch in the e-commerce space, either. Taking a look at a couple of the eBay competitors already mentioned, we find the analyst leading the market by eight points on its Amazon pick and by 25 points on Google.

Moreover, when you look closely at eBay, you see that the stock isn't quite as expensive as it seems. Sure, the 90 trailing P/E is frightening, but if you focus on cash profits as opposed to accounting profits, I think you'll be pleased to learn that the company trades for just 16 times its trailing free cash flow -- a modest sum to pay for what most analysts expect will be a 16%-plus grower going forward.

Toss in some hidden assets in the form of significant stakes in Argentine analog Mercadolibre (NASDAQ:MELI), as well as Craigslist,, and, of course PayPal, and I'd argue that eBay's not just fairly priced but selling at a discount.

Foolish takeaway
Take Stifel's advice on this one, Fools. Snipe eBay before Wall Street notices the bargain.