Editor's note: Our data source incorrectly indicated that Robert W. Baird had issued a downgrade for Mosaic. This turns out not to have been the case. The article has been corrected and The Fool regrets any confusion arising from this error.

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...
When one of the best stock pickers in the known universe upgrades one of the hottest stocks on the planet, what do you do? I'll tell you what I do. I listen carefully -- then I write up a column real quick for you to read.

Star stockpicker Soleil Securities led off the week with an upgrade to "buy" on PotashCorp (NYSE:POT) -- a stock as hot as its name is long, thanks to the global agricultural boom. And according to Soleil, that boom is far from over: "Investment positives include favorable supply demand in both crops and fertilizers, the corn price has settled in at an optimal level, and potash negotiations with India and China should take center-stage in 4Q08."

None of which sounds to Soleil like justification for a 33% sell-off in the stock over the past two months. Hence, the upgrade -- for both Potash and its archrival, Mosaic (NYSE:MOS).

Hmm...
And yet, here's something curious: Both companies initially followed the upgrade in a very confused manner this morning -- both opened lower from Friday's close and then drifted up, but now Mosaic is down roughly twice as much as Potash. If the same trends that Soleil sees helping Potash apply equally to Mosaic (as Soleil insists they do), then why are investors confused? I mean, it's not as if Soleil lacks a strong record of success with its picks. The analyst guesses right about 57% of the time, and has racked up big gains advising both on stocks tied to the agricultural sector... and on one that sounds like it should be (but really isn't at all):

Company

Soleil Said:

CAPS Says:

Soleil's Pick Beating S&P by:

Apple (NASDAQ:AAPL)

Outperform

***

107 points

Pacific Ethanol (NASDAQ:PEIX)

Underperform

*

79 points

VeraSun (NYSE:VSE)

Underperform

*

60 points

With the craziness of the markets, such a conundrum is not always resolvable and in this case we'll just have to live with it. What's more important is if Soleil is right in this instance.

And I don't think so-leil.

I mean, it may well be correct about the "favorable supply demand," the "optimality" of corn prices and whatnot. But that doesn't change the fact that both these stocks -- Mosaic and Potash -- are richly priced

Consider: Mosaic sells for a 19 P/E; Potash for 25. But according to the consensus of the dozen or so analysts covering this sector, neither one stands a cornfield's chance in a hailstorm of growing faster than 10% per year over the long-term.

Foolish takeaway
Sure, the reason for this is that both firms are already incredibly profitable. But there's a limit to how much more profitable they can become before their products become so unaffordable as to smother demand. Assuming the analysts are right in their growth projections, each stock is now carrying a 2.0 or worse PEG ratio. And that's just too high for me.

These stocks are down plenty already, but they've got further yet to fall.

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Fool contributor Rich Smith does not own shares of, nor his he short, any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 395 out of more than 115,000 players. The Fool has a disclosure policy.