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 track the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
What do you do when one of the best analysts in telecom recommends buying shares of the biggest name in the industry? Personally, I listen up. And from what I hear, William Blair thinks Cisco Systems (NASDAQ:CSCO) is a screaming buy.

Citing "recent supply chain checks," Blair advises that it's seeing a marked "acceleration in orders from Cisco" at all levels of the Internet infrastructure supply chain. Or as the analyst more poetically put it: "Cisco is gobbling up all the components it can get its hands on, which suggests a constrained supply environment."

Implication: "There has been significant pent-up demand building over the last year for Cisco's products (across the board)." Based on its actions, Cisco is seeing "projects starting to get cleared" and is receiving orders to perform "overdue networking maintenance." Blair believes that "recently, this demand trend has accelerated," and that now's the time to buy.

But is Blair right?

Let's go to the tape
It's not often an analyst's record gives a reply as clear-cut as this one: Almost certainly, Blair is on to something with Cisco. Why am I so certain? Because all four of the analyst's recent recommendations in the Communications Equipment industry have outperformed the market -- usually by wide margins:


Blair Says:

CAPS says:

Blair's Picks Beating S&P By:

Juniper Networks (NASDAQ:JNPR)



52 points

F5 Networks (NASDAQ:FFIV)



51 points

Neutral Tandem (NASDAQ:TNDM)



42 points

Riverbed Tech (NASDAQ:RVBD)



12 points

100% accuracy in the industry sounds a strong vote of confidence in the Blair's upgrade. The fact that these four picks alone are trouncing the market's returns by a combined 157 percentage points is another point in Blair's favor. And if you ask me, yes, I believe that Blair is right that Cisco, too, will outperform.

But doesn't it cost too much?
You'd think so, wouldn't you? At a 23 P/E, and trading for 15 times its annual free cash flow, Cisco's shares do look a bit pricey for the sub-10% growth rate that most analysts assign the company. But what if the analysts are wrong?

It's been known to happen, after all. In each of the last six quarters, Cisco blew right past analyst profit predictions. And I have to tell you, folks, the more I read about how Apple's (NASDAQ:AAPL) iPhone is straining capacity in AT&T's (NYSE:T) network, and the more I hear about media moving toward digital distribution, the more I think we're going to need a whole lot more Internet infrastructure than anybody else realizes. In fact, Cisco recently released a white paper predicting 40% annual Internet traffic growth over the next five years. The key growth driver? Network-delivered video and other forms of media.

So 9.8% long-term growth for Cisco, the dominant provider of the stuff? I doubt that even comes close.

Foolish takeaway
Mind you, I'm mindful of the apparent disconnect in valuation at Cisco. Its earnings multiple of 22 is a pretty price to pay for 10% growth. But if Blair's right, and I'm right, and Cisco's right -- as demonstrated by its surge in components-buying in preparation for a revival in its business -- a lot of more pessimistic investors could be looking mighty silly a few quarters from now.

Don't be one of them.

Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on CAPS, publicly pontificating about stuff he does understand under the handle TMFDitty, where he's currently ranked No. 614 out of more than 140,000 members. Apple is a Motley Fool Stock Advisor recommendation. Neutral Tandem is a Motley Fool Hidden Gems pick. The Motley Fool has a disclosure policy.