This Just In: Upgrades and Downgrades 

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.

Hang up on Palm, and put Apple on hold
Market-lagging market maven Canaccord Adams chimed in on the cell phone industry this morning, initiating coverage on a trio of handset makers. Long story short, Canaccord cannot stand 'em:

• Apple (NASDAQ:AAPL) got tagged a hold.
• Nokia (NYSE:NOK) and Palm (NASDAQ:PALM) received the dreaded "sell" rating.

According to Canaccord, Nokia will endure twin whammies in 2009, as "mobile device volumes decline more than current expectations of roughly 5% ... and carrier subsidies [will favor competitors Research In Motion (NASDAQ:RIMM)] and Apple."

Hence the sell rating. But speaking of Apple, Canaccord sends mixed messages on this one. On the one hand, "Apple has used a slew of impressive new products and premium branding to weather much of the storm thus far." On the other, "However, we expect the economy to erode further at a time when Apple's products are beginning to stagnate. We are instituting EPS forecasts about 29% below the Street for [fiscal 2009] and 23% below for [fiscal 2010]." To Canaccord's mind, that's still worth a hold rating.

The analyst reserved its harshest verdict for poor Palm, assigning the stock an intrinsic value of zero and opining: "We believe that Palm has become largely irrelevant in the smartphone space ... With very little balance sheet flexibility ... we believe that Palm shares remain a very risky bet." In short: Sell rating.

Strong words, indeed. It's not every day an analyst actually comes right out and calls a company worthless -- but does Canaccord have the Street cred to back up its opinions?

Let's go to the tape
In a word: No. Canaccord ranks in the bottom 20% of investors tracked by CAPS, getting a bare 45% of its picks right. And a review of the specific picks it's getting right, and wrong, lends further grounds for doubting Canaccord's opinions expressed today:

So basically, Canaccord got the dollar devaluation / gold appreciation trend right ... but its record on mobile device makers leaves a bit to be desired. Canaccord's been wrong on Research In Motion, wrong on Garmin -- and I believe it's wrong on at least two of its picks today.

The bull case for Apple and Nokia
I spend a lot of time discussing valuation in this column. Today, I won't -- because the argument is so clear that it hardly bears expressing. Suffice it to say that with Nokia's stock trading for less than eight times its enterprise value-to-trailing free cash flow, and Apple selling for just a little more than seven times, both stocks look like screaming bargains to me. (In fact, I've already bought Nokia for this reason. And if I can ever stop writing about Apple long enough to permit a purchase within the strictures of The Motley Fool's disclosure policy, I intend to own that one as well.)

As regards Canaccord's qualitative arguments, my analysis is even simpler: It's off base. Apple's products "stagnating?" Fools, Apple is innovation personified. Any lull in the product development pipeline is likely short-lived -- and may even be intentional, as it's obvious to all, and Steve Jobs especially, that consumers are in no mood to pay up for genius-level products this year.

Regarding Canaccord's concerns over carrier subsidies favoring Apple and Research In Motion, and thus hurting Nokia, I find the pessimism similarly overblown. Nokia gets barely 4% of its revenue from the U.S. To call the effect of U.S. carrier subsidies on Nokia's business "de minimis" would be a compliment. To my mind, it's simply a non-issue.

Foolish takeaway
At the risk of beating this poor dead horse into horse tartare, I'll say it one last time: Apple and Nokia both appear dirt cheap.

(But Palm? OK, Canaccord. I'll give you that one.)