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 worst ...
Initiating coverage on Apple (NASDAQ:AAPL) this morning, Israeli i-banker Hapoalim Securities argued that it doesn't matter if you're a long-term investor or a short-term trader: Either way, Apple is the stock for you.

The reason doesn't hinge on the iTablet's imminent arrival (although that's part of the story). More important, Hapoalim contends, is the fact that "the Street is underestimating the growth potential in smartphones, where Apple is uniquely positioned to gain share " Last but not least, the Street is misreading Apple's "ability to expand margins and free cash flow in the near term."

In short, Hapoalim contends it's right on Apple, and everyone else is wrong:

  • Dell, Hewlett-Packard (NYSE:HPQ), and Google (NASDAQ:GOOG), all of which have spun up smartphone businesses in an attempt to grab share? Wrong.
  • Perpetual dark horses Motorola (NYSE:MOT) and Palm (NASDAQ:PALM), who insist they still know a thing or two about this business? Wrong.
  • Research In Motion (NASDAQ:RIMM), which crushed estimates and proved it's still in this fight just last month? Also wrong.

And the traders who sold down Apple stock by 4% last week? You guessed it -- wrong again.

Three cheers for chutzpah!
I honestly don't know whether to be amazed at Hapoalim's audacity, or aghast at the risk it's taking.

On the one hand, it's hard not to admire this analyst's courage, coming out just hours before Apple releases earnings and announcing to the world (I'm paraphrasing here): "You're all idiots. Apple is worth $295 a share if it's a cent. Get in now, and win 50% profits!" If Apple's report, due out after close of trading this afternoon, should in any way disappoint the Street, Hapoalim's setting itself up for a big fall.

Now here's the bad news: Investors who follow Hapoalim's advice and buy Apple today could be setting themselves up for an even worse fall.

While no one knows for sure what Apple will report a few hours hence, based on the numbers we do possess, Apple appears to be selling for some pretty rich multiples: 32 times last year's earnings, more than 20 times free cash flow, and nearly five times sales. Granted, the projected five-year growth rate right now (18%) probably justifies these valuations ... but does it justify a valuation 50% higher?

Foolish takeaway
The short answer is "no." And while I admit that a blockbuster earnings report this afternoon could skew these numbers pretty far in Apple's favor, I'm not at all confident that Apple can tell us anything that would justify a share price like the one Hapoalim is predicting.

Combine this with the analyst's extremely limited (and not particularly successful) track record in the tech space (its techiest pick to date has been an October '08 sell rating on solar panel maker Suntech Power (NYSE:STP)), and I'd be exceedingly leery of following Hapoalim's lead just right now.

My advice: Do what Hapoalim should have done in the first place. Wait for Apple's report this evening. Read it. Read it again. Decide for yourself whether the firm's prospects justify the stock price -- and only then decide whether to invest.

Because haste doesn't just make waste -- it can ruin a portfolio.

Google and Suntech Power Holdings are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor selection. Fool contributor Rich Smith has no position in any of the stocks named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 745 out of more than 145,000 members. The Motley Fool has a disclosure policy.