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 ...
One of the best stock pickers you've never heard of began covering the electronic entertainment sector yesterday, assigning only "neutral" ratings to Take-Two Interactive (NASDAQ:TTWO) and THQ (NASDAQ:THQI), while advising investors to sell Electronic Arts (NASDAQ:ERTS) and buy Activision Blizzard (NASDAQ:ATVI).

If MKM Partners draws as much of a blank for you as it did for me, a brief introduction may be in order. According to its website, MKM provides "institutional equity trading and research." (Since it's based in Greenwich, Connecticut, chances are that it primarily advises hedge funds.) I suspect this explains why you can search the the Internet without finding any detail on why MKM hates EA, why it loves Activision -- or for that matter, why it even bothered issuing ratings on Take-Two or THQ, since it seems to have no opinion on either.

So, why should we care?
Even if you've never heard of MKM before today, you may be hearing a lot about it in the future -- at least, judging from its record.

MKM first appeared on our radar at CAPS way back in 2007, but this broker has only gotten really active in publishing its opinions the last six months. With only 27 CAPS opinions to its credit, MKM is already beating the pants off Wall Street's usual subpar performance, guessing right on its picks twice as often as it goofs -- and beating the market averages by a whopping 14 percentage points per pick. To illustrate:


MKM Says


MKM's Pick Beating (Lagging) S&P By

Aeropostale (NYSE:ARO)



61 points

Blackboard (NASDAQ:BBBB)



19 points

Omniture (NASDAQ:OMTR)



(8 points)

Impressed yet? I sure am. From personal experience, I can tell you it isn't easy achieving and maintaining 60%-plus accuracy in a stock market like this one. Sadly, most market mavens struggle even to maintain par. Yet so far -- fingers crossed -- MKM seems to be doing it.

Speak up, MKM
That's why it's so frustrating to see MKM issue these ratings without even an inkling of what's driving them. Sure, Activision gave us some good guidance yesterday. Bully for them. But when I look at the numbers on the four stocks MKM is rating, I just don't see any value here.

Sure, Activision is one of only two companies on this list currently generating free cash flow. It has one of the best growth rates in this sector. But if you believe consensus estimates, Electronic Arts will grow even faster -- even though MKM is telling us to sell it.

Not that I disagree with MKM about Electronic Arts. Heck, I've been telling people to sell that one for nearly four years now -- and I'd ditch THQ for the same reason: no free cash flow. But if you want the honest truth, Activision looks pricey, too.

Foolish takeaway
When you get right down to it, the only stock on the list that I actually like is one of the two that MKM didn't give a real opinion on: Take-Two Interactive. With a market cap of less than $800 million, more than a quarter of that as cash, and more than $121 million in trailing free cash flow, Take-Two is No. 1 in my book.

Take-Two Interactive Software is a Motley Fool Rule Breakers pick. Activision Blizzard, Electronic Arts, and Omniture are Stock Advisor recommendations. Blackboard is a Motley Fool Hidden Gems selection.

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