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 ...
It's only Monday, and already the week's shaping up to be "interesting" for semiconductor investors. (And by interesting, I mean headache-inducing.)

Early Monday morning, standout analyst Standpoint Research initiated coverage of power management chipmaker Volterra (Nasdaq: VLTR), naming it the No. 2 pick in all of the tech sector. But in the process, Standpoint took a potshot at UBS pick Maxim Integrated (Nasdaq: MXIM). Nothing personal, mind you. It's just that Standpoint says Maxim "does not look as attractive to us -- rank is No.  157 out of 440 names in the tech sector" that Standpoint follows.

Adding to the bearish sentiment, RBC Capital Markets chirped that it doesn't much like National Semiconductor (NYSE: NSM) either. It's "missing out on a strong smart phone cycle currently under way," and as a result, unlikely to achieve its "stated goal of revenue growth in line with industry." (Albeit, it's a pretty aggressive goal. Consensus estimates are calling for better than 15% growth in semis over the next five years; most folks think National Semi will be lucky to hit 7%.) So ... which is it, folks? Are semis a hot commodity now, or should we stay away, lest we get shocked?

Intel takes the stage
According to UBS, the former. In fact, the Swiss megabanker tells us the semiconductor industry as a whole has finally hit bottom -- and positioned semiconductor kingpin Intel (Nasdaq: INTC) to profit particularly well. The "inventory bottoming process sets up Intel to leverage the Sandy Bridge product cycle to drive near seasonal growth patterns through 2011 and potentially raise ASPs." (For a quick refresher course on Intel's new "Sandy Bridge" chip design, and how it compares with NVIDIA's (Nasdaq: NVDA) and Advanced Micro Devices' (NYSE: AMD) wares, read the report from my Foolish colleague, Anders Bylund, right here.)

As a result, while UBS still has concerns about the rise of Apple's (Nasdaq: AAPL) iPad and tablet computers in general, the analyst is pretty sure that investors are overestimating the risk to the company today. UBS says that Intel's earnings will come in above $2 a share for 2011 and rise to $2.20 in 2012. With Intel shares selling for just $21 and change today, the analyst thinks now's a great time to buy the stock.

Let's go to the tape
And you know what? They may be right. After all, there aren't many investors out there who spend more time studying semiconductor companies than UBS -- or who do better at it. Right now, the industry is the second-biggest represented on UBS's coverage list. UBS keeps tabs on 36 publicly traded semiconductor companies that we know of, and according to our CAPS stats, is beating the market on better than 63% of 'em.

It's also worth pointing out that, from any objective viewpoint, Intel's shares do look undervalued by a fair margin. Intel:

  1. Sells for just 11.5 times earnings, yet most analysts expect it to grow at a 12.2% clip over the next half-decade.
  2. Nearly always churns out more free cash flow than it reports as net income, so you know the quality of earnings here is high.
  3. Boasts a balance sheet laden with more than $20 billion cash, against just $2.3 billion debt.
  4. And it even pays a dividend! A whopping 3%, if you can believe it.

Foolish takeaway
Warren Buffett always tells us he'd rather own a great company at a good price, than a good company at a great price. Yet here we have Intel, offering us both at once.

Great company, great price ... 'Nuff said.

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 was recently ranked No. 674 out of more than 170,000 members. The Motley Fool has a disclosure policy.

Intel is a Motley Fool Inside Value selection. Apple and NVIDIA are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Apple and Intel.

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