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.

Let's see what they have to say
The news is out and the verdict is in: If you wanted to own Seagate (NYSE: STX) at a good price … you've missed your chance. This company may well go private, but its shares are going precisely nowhere. Or so say two of Wall Street's finest analysts this week, as both R.W. Baird and UBS linked arms and downgraded the shares to "neutral."

Make no mistake, both analysts are pretty confident this company is buyout bait. Baird rates the probability of a return to private equity ownership as "high," while UBS notes that any drop in share price would only increase the company's attractiveness to an acquirer, limiting the stock's "downside."

However, now that the shares have already appreciated 20% in anticipation of a buyout, UBS argues there's little room left to run, capping the likely going-private price at $17. And in the event a buyout does not happen, Baird sees little to like in Seagate's "mediocre results with no forward guidance."

I disagree. Fact is, I see everything to like in Seagate, and precious little not to.

Let's go to the tape
Before I tell you why I like Seagate (Hint: It's the price), let me give these analysts a fair shake, and explain why it's entirely possible that they are right and I am wrong. First off, both Baird and UBS rank in the top 10% of investors tracked on CAPS. Both have also been outperforming the market on their Computers and Peripherals recommendations of late, with Baird "netting" big gains on NetApp (Nasdaq: NTAP) and Netezza (NYSE: NZ) ...



Baird Says

CAPS Rating
(out of 5)

Baird's Picks Beating S&P by

NetApp Outperform ** 165 points
Netezza Outperform ** 131 points
... while UBS expresses a preference for more higher-profile fare such as Apple (Nasdaq: AAPL) and EMC (NYSE: EMC):



UBS Says

CAPS Rating
(out of 5)

UBS's Picks Beating S&P by

EMCOutperform*****66 points
AppleOutperform***54 points

Clearly, these active picks are working out well for the analysts. The problem is, they haven't always been so lucky. Dig deep into the CAPS archives, and what you'll discover about the analysts' long-term records is far from encouraging. As it turns out, UBS is no better at picking long-term winners in the comps space than you would be, armed with a coin to flip. And Baird bumbles even more frequently, scoring a 38% score for accuracy in this sector, 12 points worse than UBS.

2 legit 2 win
Why do these two brand-name investment banks continually miss the boat in tech, and struggle to even match the market's returns on their picks? In my humble, Foolish view, it's because they're outsmarting themselves. Sometimes, a cheap stock really is as good a deal as it looks, and to my Foolish eye, Seagate looks awfully good even after its run-up.

Consider: Selling for less than five times earnings, and barely seven times free cash flow, investors are valuing Seagate as if they expect it to produce single-digit growth forever. Yet most analysts on Wall Street -- even those who pan the stock -- agree that Seagate is more than likely to grow at better than 10% per year over at least the next half-decade. That may not be as fast as rival Western Digital (NYSE: WDC) is expected to grow, but it's plenty fast enough to support a higher price on Seagate shares than they're fetching today.

Foolish takeaway
Debt-free, profitable, and producing copious cash flows from its business, Seagate would make for a prize gem in the crown of any would-be acquirer. But with valuations in the single digits, and growth in the doubles, I'm convinced Seagate will serve investors perfectly well if it remains independent.

My advice: Don't be scared by the recent run-up. This train hasn't even begun to exit the station.

Rich Smith owns shares of Western Digital. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 563 out of more than 170,000 members. The Motley Fool has a disclosure policy.

Apple is a Motley Fool Stock Advisor pick. The Fool owns shares of Apple.

True to its name, 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.