At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycles of upgrades, downgrades, and "initiating coverage at neutral." You might think we'd be the last ones to give virtual ink to such "news." And we would be -- if that were all we did.

But in "This Just In" we don't only 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 ...
Shares of Motley Fool Income Investor pick Petrobras Brasileiro (NYSE:PBR), aka Petrobras, took a hit this morning as investment banker Bear Stearns downgraded the stock from "outperform" to "peer perform." Why the banker decided to lump Petrobras in with all the other oil companies isn't entirely clear, as news reports on the downgrade give no details other than the fact that it happened. But I suspect that Bear's decision may have something to do with a tax break that Petrobras is trying to win from the state of Rio de Janeiro.

Under current legislation, oil rigs imported into the country for use in exploration and production are tax-exempt. Petrobras would obviously like to keep it that way, but Rio's government has other ideas. Hoping to boost its share of the nation's oil revenues, the state government wants to impose a 16% value-added tax (VAT) on oil rigs used in its territory (from which flows nearly 80% of Brazil's crude oil). Petrobras and its interest-group allies are agitating for something more on the order of a modest 3% VAT, but whether they will succeed is unknown. My guess, therefore, is that Bear Stearns is pricing this uncertainty into its valuation model on Petrobras.

The question, therefore, is this: How good of an odds-maker is Bear Stearns? Could it be overestimating the risk of tax and whatever other risks it's factoring into its decision?

Let's go to the tape
My idea, based on Bear's stock picking record to date, is that the banker probably has a good grasp of the situation, and its downgrade should be viewed accordingly. Just shy of the top 10% of CAPS players, Bear boasts a sterling 89.05 CAPS rating. A couple of the oil and gas plays that have helped it earn this rank include:

Company

Bear Said:

CAPS Says (Out of 5):

Bear's Pick Beating S&P by:

Exxon Mobil (NYSE:XOM)

Outperform

****

4 points

Western Refining
(NYSE:WNR)

Underperform

***

3 points

However, Bear is also racking up some losses with picks like:

Company

Bear Said:

CAPS Says:

Bear's Pick Lagging S&P by:

Marathon Oil (NYSE:MRO)

Underperform

****

11 points

Total SA  (NYSE:TOT)

Outperform

***

8 points

Not impressed? No surprise there. When I first looked at these two charts, I wasn't particularly enthused about Bear's horse sense either ... until I dug into the CAPS archives to see how well the banker had done with past oil and gas picks, since closed. It was there I saw:

Company

Bear Said:

CAPS Says:

Bear Beat the S&P by:

PetroChina (NYSE:PTR)

Outperform

*****

35 points

Tesoro (NYSE:TSO)

Outperform

****

24 points

Seems Bear knows its way around the oil patch pretty darn well. If it's growling about Petrobras today, I'd listen.

That said, not everyone cares what Bear downgrades in the woods. At Motley Fool Income Investor, dividend hound James Early stuck steadfast by Petrobras for two straight picks, earning our subscribers a whopping 26% average return on each pick. Find out why James remains optimistic about the Brazilian oil powerhouse when you try the service -- free -- for 30 days.

Total SA is an Motley Fool Income Investor newsletter recommendation.

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 currently ranked No. 1,559 out of more than 65,000 players. The Fool has a disclosure policy.