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 ...
If you're an investor in oil stocks, then yesterday must've felt a little bit like Christmas morning to you. NYC-based equities analyst Dahlman Rose waded deep into the oil patch Wednesday, and emerged to deliver a sackful of new ratings -- presents piled high to the sky, and all you had to do was unwrap 'em. So let's do that.

Out of a field of 10 stocks examined, Dahlman picked seven winners: Patterson-UTI Energy, Halliburton (NYSE: HAL), Schlumberger (NYSE: SLB), Baker Hughes (NYSE: BHI), National Oilwell Varco (NYSE: NOV), Weatherford International (NYSE: WFT), and Cameron International. Each of these lucky seven, Dahlman believes, will outperform the market. The analyst also mentioned three that it expects to merely match the broader market's returns: Nabors Industries, FMC, and Dril-Quip. And as for the losers ...

You can let your breath out. The best news of all this week is that Dahlman doesn't see anybody in this industry underperforming the market.

Seriously? Nobody?
Seriously. Nobody. According to Dahlman, you literally cannot go wrong investing in oil services stocks today. Heads, you win. Tails, you don't lose.

And taking a gander at the analyst's record, you might be inclined to agree. After all, Dahlman has been stomping 'round the energy patch for quite some time now -- and quite successfully. Over the two years we've been covering Dahlman's recommendations, we've watched this banker rack up an impressive record of 55% accuracy on its energy picks. Thanks largely to multi-bagger winners like:

Companies

Dahlman Said:

CAPS says:

Dahlman's Picks Beating S&P By:

Massey Energy

Outperform

**

194 points

McMoRan Exploration

Outperform

****

154 points

Gulfport Energy

Outperform

***

110 points

As of today, Dahlman boasts a record of better than 55% accuracy in the Oil, Gas and Consumable Fuels sector, and a total of 213 percentage points of market outperformance spread across more than two dozen separate calls in the space.

Nice!
Impressed? Well, before you run out and buy a passel of Halliburton shares on Dahlman's say-so, consider the flip side of Dahlman's expertise -- the adjacent-to-energy sector of Energy Equipment and Services. Because as it turns out, this is the very sector in which the bloom comes off Dahlman's Rose:

Companies

Dahlman Said:

CAPS says:

Dahlman's Picks Lagging S&P By:

Transocean (NYSE: RIG)

Outperform

*****

17 points

Atwood Oceanics

Outperform

*****

5 points

Noble Corp (NYSE: NE)

Outperform

*****

4 points

Just like Dahlman picked Halliburton and the rest to beat the market yesterday, it's picked these three drillers to outperform previously. Dahlman was wrong then, and it's wrong now.

Why do I say this? Simply put, because the numbers don't work. Scan down Dahlman's list of recommended oil services stocks once again. What do you see?

With the exception of National Oilwell Varco (and a negative P/E for Patterson), not a single stock with a P/E of less than 20. And only one company is profitable and generated free cash flow in excess of its reported income over the last year. (National Oilwell Varco, a stock I've previously praised, albeit at a much lower price.)

Foolish takeaway
Now don't get me wrong. When it comes to picking energy stocks per se, Dahlman's got an enviable record of success. Regardless, when you consider Dahlman's record of guessing wrong nearly twice as often as right in the oil services sector, and the almost total lack of compelling bargains in its list of recommended companies, I see little reason for investors to follow Dahlman's advice today.

My advice: This batch of buy ratings is a dry hole. Don't follow Dahlman down into it. There are better bargains out there.

Atwood Oceanics and National Oilwell Varco are Motley Fool Stock Advisor selections.

Fool contributor Rich Smith does not own shares of any company named above (or had you already guessed that?) You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 780 out of more than 160,000 members. The Motley Fool has a disclosure policy.