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 worst…
Shares of global GPS guru Garmin (NASDAQ:GRMN) are enjoying a second day of rising prices today, apparently helped by... a sell rating from Global Crown Capital.

Wait. Did you say "helped?"
Apparently helped. Investors seem to be taking Global Crown's initial "sell" rating on Garmin as a sort of contrarian indicator. As in, "What Global Crown says will go down, must go up." (Perverse logic, I'll grant you, but so far it seems to be working.) Let's see whether there's anything to this theory.

The record
Global Crown's CAPS record is a bit on the spotty side. Over the two years we've been tracking this asset manager, it's made just 20 recommendations public, with mixed results:


Global Crown Said:

CAPS Says:

Global Crown's Pick Beating (Lagging) S&P by:

Advanced Micro Devices (NYSE:AMD)



18 points




13 points

Texas Instruments (NYSE:TXN)



(4 points)




(5 points)

When weighed against its record of getting precisely as many picks wrong as right, this works out to a subpar CAPS rating of just 42.32 for Global Crown. Hardly impressive, and it might explain why Garmin shareholders may be less than terrified that Global Crown hates their stock. But should they be worried, at least?

The reasoning
Here's the problem with Garmin, as Global Crown sees it. Dogged by competition from rivals TomTom and Magellan, and smartphone makers like Apple (NASDAQ:AAPL) and Research In Motion (NASDAQ:RIMM), both of which are warming to the concept of putting GPS in their phones, Garmin finds itself "under stress from competition, suffering a major slowdown and under the threat of the mighty smartphone," the analyst says.

Citing "light PND unit shipments," Global Crown predicts that Garmin will struggle to meet Wall Street estimates in Q3, while the target for Q4 "will prove very difficult to achieve." And while it concedes that price competition between Garmin and TomTom has abated lately, Global Crown predicts that TomTom will reopen the price wars in Q4 as it seeks market-share inroads in the U.S. -- "depressing margins for both companies and leading to potential earnings disappointments."

In sum, Global Crown believes that profit margins on GPS devices will contract. Meanwhile, the "unit hyper-growth" that has offset margin contraction in the past -- the ol' "we make it up with volume" strategy -- is nearly at an end.

Pessimistic is the head that wears the Crown
Me, I'm not so sure. I don't necessarily disagree with Global Crown on the facts; price competition is definitely putting the squeeze on Garmin's margins. And sales growth is clearly slowing -- witness the "mere" 23% sales growth Garmin posted last quarter.

But really, how much growth does Garmin need to justify a P/E ratio of 9? Despite all it has going against it, analysts still mostly predict 14% long-term growth for Garmin. To me, that more than justifies today's price.

And if those analysts are succumbing to their old habit of overreacting to bad news? Well, in that case, Garmin's shares could be dirt cheap right now, whether Global Crown has noticed it or not.

NVIDIA, Garmin, and Apple are Motley Fool Stock Advisor recommendations, while Garmin is also a recommendation of Global Gains. Try any of our Foolish newsletter services free for 30 days.

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. 371 out of more than 115,000 players. The Fool has a disclosure policy.