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...
For the second time this week, solar wafer-maker MEMC Electronic (NYSE: WFR) has landed a stock upgrade from Wall Street. Investors are jumping for joy, bidding the shares up 5% yesterday.

Granted, both RBC Capital (which upgraded the shares earlier this week) and Wunderlich Securities(which did its upgrade just yesterday) are only telling investors to "hold" MEMC, rather than actually rushing out to buy it. Both upgrades seem inspired by the same catalyst: MEMC's SunEdison subsidiary's successful sale of a solar plant to private-equity shop First Reserve for about $384 million, followed by news that JPMorgan (NYSE: JPM) is anteing up $60 million to fund similar projects across the U.S.

But when you consider that both analysts rank among the very best investors on the market, scoring in the top 10% of the "players" we track on CAPS, maybe the spike in stock price really is justified. After all, Wunderlich tells us that the JPMorgan deal provides "some certainty of solar farm sales this year," while hinting at "future solar farm financing." Meanwhile, RBC believes MEMC will benefit from better "2011 poly/wafer pricing given stabilized credit markets and attractive project IRR versus government bond yields."

In other words, Wall Street expects MEMC to do more business at better profit margins. Unfortunately, things may not play out that way at all.

Solar sneak attack
Over in California, Northrop Grumman (NYSE: NOC) has filed a complaint attacking permits issued to solar-farm powerhouse First Solar (Nasdaq: FSLR). Northrop believes the reflected light from First Solar's "Solar Ranch One" project in Antelope Valley in Los Angeles County will interfere with flight testing of Northrop's stealth fighter jets, posing a national security risk.

But the real problem -- for First Solar, for MEMC's potential "solar farm" customers, and for the solar farm industry in general, including Suntech (NYSE: STP) and Duke Energy (NYSE: DUK) -- is that Northrop alleges that the government cut corners in issuing approvals for large-scale solar projects. According to Axiom Capital: "After reading the appeal put together by the high-priced attorneys employed by Northrop Grumman, it is clear to us that anyone who wants to potentially block one of these large-scale solar projects now has an excellent template from which to operate."

Foolish final thought
If lawyers start lining up to challenge solar projects -- whether on national security grounds or otherwise -- that can't be good news for MEMC. But it's not the only reason to be leery of the stock.

Back in July, I outlined my concerns about the company's recent plummet in free cash flow production. At last report, MEMC was burning cash at the rate of $367 million a year -- a startling reversal from the days when it was one of the strongest generators of cash in the industry. Granted, a few well-timed solar-farm sales could remedy that in a hurry...

But if projects start getting canceled -- or even delayed, as "shortcuts" in the approval process get denied, stretching out the time needed for projects to be built and begin operation -- this could throw a real monkeywrench into MEMC's revenue stream. Beware of the potential blowback.

First Solar and Suntech Power are Motley Fool Rule Breakers picks. Duke Energy is a Motley Fool Income Investor recommendation.

The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

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. 583 out of more than 170,000 members. The Motley Fool has a disclosure policy.