The professional analysts on Wall Street have caught a lot of grief in recent years. Whether they're too conflicted, too optimistic, too caught up in protecting their jobs, or too wrong, Wall Street analysts don't inspire as much awe as they once did -- nor should they.
But that doesn't mean they're all bad.
Many Wall Street analysts are savvy stock-pickers who make great calls. In fact, The Wall Street Journal celebrates the best analysts and the best calls across industries annually. Even so, there's simply not enough transparency in the industry to know just who the best and worst analysts are. That's bad for the good analysts; they're unwittingly protecting the sheep.
Until now.
Enter Motley Fool CAPS, our brand-new community-intelligence database, which tracks the outperform and underperform ratings that both individual investors and Wall Street pros put on stocks. In turn, every stock and every investor earns a rating.
Yes, you read that correctly: Every investor is rated. That means we can finally answer the age-old question: Which Wall Street analysts are better stock pickers than my grandmother?
Goldman Sachs and Jim Cramer, for example, may not be. According to our data source, they are among the bottom one-fourth of all 13,000 portfolios currently participating in CAPS.
You don't want the worst ideas
However, a number of firms have proved themselves exceptional stock-pickers since Briefing.com added their data to CAPS over the summer. One of these is Needham & Co., a New York-based firm that, according to its website, "focuses on emerging growth companies in technology, biotechnology and life sciences."
Needham is currently ranked in the CAPS top 10, having scored big putting outperform ratings on Research In Motion (NASDAQ:RIMM), AllosTherapeutics (NASDAQ:ALTH), Candela (NASDAQ:CLZR), and Daktronics (NASDAQ:DAKT). Overall, the company is crushing the market with 67% accuracy.
If you're looking to piggyback on Needham's success, the company most recently awarded outperform ratings to JDSU (NASDAQ:JDSU), GPC Biotech (NASDAQ:GPCB), and Cynosure (NASDAQ:CYNO).
Warning: Past performance does not guarantee future results
Of course, the caveat here is that we've only been tracking Wall Street picks for a few months now. While we can't yet call the data predictive, it's at least very interesting to examine. Moreover, although Needham's focus on technology and growth falls well outside my personal circle of competence, after seeing the firm's track record, I'm intrigued by the stocks it adds to its portfolio.
If you'd like to take a look at the rest of Wall Street's best and worst analysts and their stock recommendations, click here to join the free beta test of Motley Fool CAPS. You can also get all kinds of opinions on the stocks you're looking to buy, sell, or hold. Hey, you can even check out my own personal rating to see if you want to take this article seriously.
The financial community has been opaque for too long. CAPS can change all that.
Fool co-founder David Gardner -- TMFBreakerDave in CAPS -- heads up his own portfolio of technology-focused growth stocks. Discover all his picks with a free 30-day trial to Motley Fool Rule Breakers.
Tim Hanson does not own shares of any company mentioned. And though he trails Needham in the CAPS rankings, he remains quite proud of his score. The Motley Fool has a disclosure policy.
