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." Today, we'll show you whether those bigwigs actually know what they're talking about. To help, we've enlisted Motley Fool CAPS to track the long-term performance of Wall Street's best and worst.

And speaking of the worst...
Things are not looking good for Johnson Controls (JCI 1.54%). On Tuesday -- Halloween Eve -- the auto parts manufacturer and would-be car-battery kingpin revealed that a "one-time" charge to earnings kept it from earning a profit in fiscal Q4. Auto parts sales in Europe are down 15% year over year, and according to management, the view doesn't get much better for at least the next six months.

Management expects to see "significantly lower" profits (than earned in the same period in 2012) during the first half of 2013, putting a ceiling on profits growth -- of which there may be none next year. Result: Even though Johnson narrowly beat on earnings for the fiscal fourth quarter, it got hit with a downgrade to "hold" by Needham & Co. yesterday. Citing "Europe macro uncertainty [that] is creating too many near-term headwinds for the company to power through over the next two quarters," Needham cut its earnings estimate in line with management guidance, to $2.60 per share for the current year.

Problems galore
Now, if a weak couple of quarters were the only knock against Johnson, I admit that I'd be looking at this as a potential buying opportunity. After all, at 14.6 times earnings, but a growth rate of more than 13.3%, the stock hardly looks expensive. Throw in a generous 2.8% dividend yield, and the stock might even be called "cheap." Unfortunately, the story's not quite that simple.

For one thing, looking at Johnson Controls as a "14.6 P/E stock" fails to take into account the huge debt load this firm carries -- $5.8 billion, net of cash on hand. It also fails to factor in the fact that Johnson isn't even earning all the profit it claims to be making -- at least not in cash. While Johnson says it "earned" $1.2 billion over the past year, you see, its cash flow statement clearly shows that, in fact, the company generated no positive free cash flow whatsoever during the period. To the contrary, Johnson burned $272 million in cash.

A story stock, up in flames
And that's not even the bad news. To date, you see, the "story" on Johnson has been that while every other car battery maker in the country appears hell bent on driving itself into bankruptcy, Johnson has been keeping its head above water, and even moving in to scoop up the pieces on its failed, small-fry rivals.

Last month, the company appeared set to achieve a real coup, when it moved in on battery maker A123 Systems, offered to buy the company's automotive assets for $125 million, and thereby capitalize on the $250 million Department of Energy loan A123 had scored during the "stimulus" years. In so doing, Johnson would also inherit A123's stable of clients for its rechargeable batteries -- a customer list that includes big names like General Motors (GM 1.98%) and Navistar (NAV).

But here's the thing: A123 already had a deal with a financial savior before it filed for bankruptcy -- Chinese auto parts maker Wanxiang Group, which in August threw A123 a $465 million lifeline. Now, Wanxiang is challenging Johnson's attempt to swipe A123, demanding that it be named the "lead bidder" for A123's assets, and promising to outbid Johnson for what's left of A123.

Money talks
That promise is going to sound awfully attractive to the other companies that invested early in A123 -- General Electric (GE 1.44%) and ConocoPhillips (COP -0.04%) for example, who are now looking for ways to salvage what they can from that investment. If it turns out, therefore, that "money talks," Johnson may have to walk away from A123 and all the opportunities an acquisition would have brought with it.

If and when that's the way things play out, investors who bought shares of Johnson Controls on the theory that a "14.6 P/E" means Johnson is cheap, and that free cash flow and onerous debt loads aren't important, will realize how very wrong they were.

And how right Needham was to downgrade the stock.