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 ...
Good news for long-suffering Sprint Nextel (NYSE: S) shareholders today -- one of the best stock pickers in the business thinks the pain may be at an end.

And no, I'm not talking about Motley Fool Inside Value advisor Philip Durell, although it's true that he has recommended the stock. Today, the biggest news at Sprint is probably TheStreet.com's report that the Sprint-Clearwire-Intel (Nasdaq: INTC) alliance to create a WiMax joint venture appears to be back on. But the other big news is that HSBC Securities has upgraded Sprint's stock from "underweight" to "neutral." While we're not at "buy" just yet, this is still an upgrade worth paying attention to -- because as we learn when turning to CAPS, HSBC has a reputation as one sharp stock picker.

Let's go to the tape
With a CAPS rating of 96.23 and a record of 58% accuracy, HSBC earns itself a place among Wall Street's Best professional investors. More important to today's news, it's got a simply superb win-loss record when it comes to picking telecom stocks (oh, and Intel as well):

Company

HSBC Said:

CAPS Says (out of 5):

HSBC's Pick Beating S&P By:

Telefonica (NYSE: TEF)

Outperform

*****

37 points

AT&T (NYSE: T)

Outperform

****

18 points

Verizon (NYSE: VZ)

Outperform

****

10 points

America Movil (NYSE: AMX)

Outperform

*****

5 points

Intel

Outperform

****

3 points

In fact, the closest thing I can find to a bad guess on telecom among HSBC's active picks is Comcast (Nasdaq: CMCSA), which the analyst picked to outperform in January 2007, but which has in fact underperformed the market by about 29 points. Fortunately, HSBC more than cancels out those losses with its record on Sprint. With two recommendations under its belt (that we've captured on CAPS, at least), HSBC has racked up a total of 32 points' worth of market outperformance on Sprint.

Foolish takeaway
So HSBC has a good record on telecom. Fine and dandy. But what does its "neutral" rating on Sprint mean for investors? HSBC is saying that after losing nearly half its value over the past 12 months, Sprint is finally at a point where it should be able to stop the bleeding. The stock may not yet be a buy, but it's no longer a sell.

I agree. Valuing the company based on its free cash flow (FCF), I see Sprint has generated $2.5 billion over the last 12 months. Weighed against its $28 billion market cap, this means Sprint is selling for about 11 times trailing FCF. With analysts projecting about 9% growth going forward, the stock isn't yet within my buying range -- but it's getting there. A little more selling, or a little more FCF, and Sprint could make the grade.