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." While the pinstripe-and-wingtip crowd is entitled to its opinions, we've got some pretty sharp stock pickers down here on Main Street, too. (And we're not always impressed with how Wall Street does its job.)

Given that, perhaps we shouldn't be giving virtual ink to "news" of analyst upgrades and downgrades. And we wouldn't -- if that were all we were doing. Fortunately, in "This Just In," we don't simply tell you what the analysts said. We 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 ...
As the rest of the market was winding down after a long, turbulent bout of March madness, the ace stock pickers at Deutsche Bank were just finishing up a new stock recommendation for you. Emerson Electric (NYSE: EMR) is the name, and building every sort of electrical widget is its game.

According to Deutsche, a combination of weak demand, fears of inflation in the emerging markets, and "Japan supply chain concerns" has Emerson's share price trailing the rest of the industrial goods sector by nine percentage points so far this year. As this Yahoo! Finance chart shows, Emerson has suffered much worse than key rivals ABB (NYSE: ABB) and General Electric (NYSE: GE). About the only company that's performing worse than Emerson is Japan's Hitachi (NYSE: HIT) -- a very special situation.

While it's true the stock still trades for a pricey 20 times earnings, Deutsche worries that this may be as cheap as Emerson gets: "EMR is rarely discounted and waiting for its premium to vanish is a bit like waiting around for Godot." Deutsche's fear is that rather than falling further, and becoming cheaper, Emerson's slide will likely be reversed as the factors that have driven it work themselves out over the next couple of quarters. Accordingly, Emerson at "16.5x N12M EPS," while still 5% more expensive than similar stocks, is a deal worth jumping on.

April Fools?
But wait. Hold up a sec. Did Deutsche just tell us that Emerson is too expensive ... but we should buy it anyway? That does seem to be what the banker is saying. But according to Deutsche, it doesn't really matter what Emerson costs today, because within a year the stock's going to be worth $66, and well on its way to an ultimate $100 stock price.

What's more -- and you may be surprised to hear this -- but it's entirely possible Deutsche is right. If so, it won't be the first time:


Deutsche Rating

CAPS Rating
(out of 5)

Deutsche's Picks Beating
S&P by

American Superconductor

(Nasdaq: AMSC)

Outperform ** 61 points (picked twice)
Cooper Industries (NYSE: CBE) Outperform ** 28 points
ABB Outperform ***** 16 points (picked twice)

Indeed, when it comes to picking electrical equipment stocks, Deutsche is right about 63% of the time. And I expect this is going to be one of those times.

Why? Well consider the valuation. Whatever you think of Emerson's stock price relative to its peers, on an objective basis, it doesn't look all that bad. You see, Emerson generates free cash flow roughly 10% higher than what it reports as its "net profits" under GAAP. Valued on last year's $2.4 billion in free cash, therefore, the stock sells for about an 18-times ratio.

When you consider that most analysts expect to see Emerson grow its profits at better than 15% per year, every year, for the next five years, and that the stock pays a 2.4% dividend to boot, I'd say Emerson is at worst fairly priced today. When you consider further that Emerson is arguably best in class among all the electrical equipment stocks named above -- it boasts a higher profit margin than any of American Superconductor , GE, ABB, Hitachi, or Cooper; better than United Technologies (NYSE: UTX), too, for that matter -- I agree with Deutsche that Emerson deserves a premium valuation.

Foolish final thought
Once upon a time, Warren Buffett is said to have uttered something to the effect that rather than getting a great price on a merely good company, he'd prefer to own a great company at a good price. To me, that's exactly the situation with Emerson today.

So if you've ever pondered the stock market, and wondered -- out of these 10,000 opportunities, WWBB (what would Buffett buy?), I've got just one word for you: Emerson.