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 ...
In the world of finance, few banks have the size and reputation of Citigroup -- the original financial supermarket. In the sphere of agriculture, foodstuffs processor Archer-Daniels-Midland (NYSE:ADM) bills itself as "supermarket to the world." This morning, these two "supers" clashed, when Citi downgraded ADM to "sell." Which shall emerge victorious from this clash of industry titans? You be the judge.

Rainbow warrior
In the left corner, fighting in bright red rainbow trunks, is Citigroup. As a business, it's a candidate for nationalization. As a stock picker, though, Citigroup outperforms 84% of the investors we track on CAPS. Over the years, investors could have profited mightily from following Citi's advice on:

Stock

Citi says:

CAPS says:

Citi's Pick Beating S&P By:

Rio Tinto (NYSE:RTP)

Outperform

*****

98 points

Mylan

Outperform

*****

64 points

Satyam Computing (NYSE:SAY)

Underperform

***

56 points

And that's not all. Within the ag sector, in particular, Citigroup has rightly endorsed such firms as:

Stock

Citi says:

CAPS says:

Citi's Pick Beating S&P By:

Terra Industries*  (NYSE:TRA)

Outperform

****

238 points

Monsanto (NYSE:MON)

Outperform

****

93 points

CF Industries**  (NYSE:CF)

Outperform

****

202 points

*Citigroup picked Terra Industries to outperform three times, was correct each time, and has beaten the S&P by a total of 238 points on the picks.
** Citigroup picked CF Industries to outperform three times, was correct on each pick, and has beaten the S&P by a total of 202 points.

Green giant
All of which argues in favor of following Citi's advice when it tells us that its team "recently traveled to Decatur ... to visit with management from Archer Daniels Midland." The analyst came back with these observations about ADM's major businesses:

  • "Extremely rapid [declines in] agricultural services and oilseed processing"
  • "A bit more moderate [problems at the] wheat and cocoa processing division"
  • High-fructose corn syrup "volume ... down anywhere from -1% to -5%"
  • And to top it all off, the likelihood that ADM will miss "[Fiscal year] 2010 consensus estimates of $2.87"

Put it all together, and Citi is telling us ADM is falling to pieces, and it's time to sell the stock. So why do I find myself unconvinced by Citi's sell thesis?

One word: valuation
Basically, because when I look at ADM today, I see all of the problems Citi spotlighted -- and more -- as being already priced into the stock.

Is the recession taking a toll on ADM's business? Sure it is. How could it not? Consumers are strapped for cash on one end of the supply chain. On the other, soaring fertilizer prices, which help PotashCorp (NYSE:POT) profits, force farmers to raise prices. ADM could soon resemble a "middleman to the world," its margins squeezed on both ends.

While I don't doubt Citi is right that ADM faces near-term problems, the price looks right on this stock long-term. ADM sells for less than 9 times forward earnings today, despite consensus expectations that it will grow profit at 15% per year over the next five years. At the risk of oversimplifying the math, even if Citi is right that ADM will miss earnings in 2010, analysts would need to be off by a factor of 40% on their long-term predictions in order for ADM to look expensive.

Foolish takeaway
If I'm right -- if "this too shall pass" and in years to come we find that the world resumes eating, and ADM growing -- then the stock's current valuation offers investors a compelling entry point into the stock.

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. 307 out of more than 130,000 members. The Fool has a disclosure policy.