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

So 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.

William Bear
I admit it: When shares of former high-flyer Dendreon (Nasdaq: DNDN) plunged 65% in a day, I jumped for joy. After reading so much about Provenge's prospects, and for so long, the market had overreacted and I would finally get a chance to buy.

Or not. As it turns out, you see, I'm not the only investor whose interest Dendreon caught. On Friday, ace stockpicker William Blair took a close look at the now-devastated stock, in hopes of finding some value there. After running down the list of potential blockbusters in the field of prostate cancer treatment -- Sanofi-Aventis' (NYSE: SNY) Jetvana and Johnson & Johnson's (NYSE: JNJ) Zytiga, and now Provenge, MDV3100 from Medivation (Nasdaq: MDVN), and custirsen from OncoGenex and Teva (Nasdaq: TEVA) -- Blair is ready to pick its winners.

And Dendreon isn't one of them.

Let's go to the tape
Why should you care what William Blair thinks about Dendreon's chances? Well, for one thing, because Blair's one of the highest-rated investment bankers on CAPS today, outperforming nearly 90% of the investors we track. The analyst boasts a sterling record of 62.5% accuracy in the biotech field, with the bulk of its recommendations easily outperforming the market. So the fact that Blair is declining to recommend Dendreon does mean something.

Blair worries that Provenge isn't quite as "big an opportunity ... in the United States and Europe" as many investors had hoped. The analyst further worries that "cumbersome logistics to manufacture and distribute [Provenge's] patient-specific therapy" will hinder Dendreon's ability to produce a profit. Indeed, when I look at Dendreon today and see the company is still unprofitable, burning cash, and laying off 25% of its workforce -- and pegged by analysts for negative long-term growth -- I have my doubts as well.

Got a better idea?
According to Blair, investors today are best advised to pass on Dendreon's "cheap" stock and focus instead on Medivation and OncoGenex. The analyst calls MDV3100 "promising ... with usefulness not only in the mCRPC setting, but also earlier on the disease continuum in the hormone-sensitive stage." Blair also likes custirsen's chances and suggests that investors keep an eye out for "top-line data during fourth quarter 2012."

As for me, I have to admit that these companies' lack of profit and wildfire burning of cash worries me just as much as Dendreon does. If you ask me, the safer play here is to invest not in the start-ups, whose future is uncertain. Rather, consider OncoGenex partner Teva as a safer route to share in the wealth if their drug should prove out. At less than 11 times earnings, with strong single-digit growth projections and a 2% dividend to support the stock price -- and copious free cash to support the business -- Teva looks like a survivor.

That's something I wish I could promise about the other cancer treaters ... but cannot.

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