This Just In: Upgrades and Downgrades

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'll be tracking the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
One day after reporting a 58% spike in revenue and a tripling of per-share profits, Israeli telecom equipment maker Ceragon Networks (NASDAQ:CRNT) was buffeted by a pair of conflicting analyst reports yesterday. On the upside, investment banker Morgan Joseph upgraded the stock to "buy." However, research house Susquehanna Financial begged to differ. Looking at the same results -- the same numbers -- Susquehanna dropped the stock from "positive" to "neutral."

News reports contain no information on the basis for either company's change in stance, so investors are in a bit of a quandary about whom to believe. That said, the market has voted clearly in favor of Morgan Joseph's view. While Ceragon's shares barely budged in response to its tripling of profits, the news that Morgan Joseph expected these shares to move higher sparked a nearly 8% rise in the stock's price.

Why might that be? Compare the analysts' records, and you'll see. According to Motley Fool CAPS, Morgan Joseph isn't just a good stock picker. With a CAPS rating of 95.73, it's quite literally one of "Wall Street's Best" -- ranked 10th out of all the professional stock pickers we track. In contrast, Susquehanna is at real risk of getting tagged with the CAPS booby prize of one of "Wall Street's Worst" stock pickers. With a 29.66 CAPS rating (down from just a week ago), Susquehanna's 79 stock picks tracked over the past year have actually racked up a negative score. Talk about your contrarian indicators.

Let's take a look at a few of the picks that have earned these two stock jocks their respective, and strikingly contrasted, records:

Meanwhile:

There's no doubt that Susquehanna has made some brilliant stock picks in its history. Equally true, Morgan Joseph has had some boneheaded ideas of its own. In fact, only about 55% of MJ's picks outperform the market -- but that's good enough to make it one of the best stock pickers out there, which just goes to show you how tough this business can be. But on balance, the records speak for themselves: Morgan Joseph is the superior stock picker in this race.

I wouldn't want to put my money down on the basis of any firm's unexplained say-so. But if gambling is your thing, the percentages clearly favor Morgan Joseph's opinion on this one. And that seems to be Mr. Market's thinking as well.

Looking for more actual, concrete reasons to like or dislike Ceragon? If the professional analysts aren't helping, then consider taking a trip to CAPS-land to read what other investors have to say about the company. And while you're there, make sure to check out what the current score leader on Ceragon thinks about the stock -- with his recommendation currently outperforming the market by better than 200 percentage points, I suspect this guy (or is "ztur" a gal?) knows a thing or two about Ceragon.

Fool contributor 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's ranked No. 740 out of more than 60,000 CAPS players. Akamai is a Rule Breakers recommendation. The Fool has a disclosure policy.