Editors' note: A previous version of this article was published with incorrect information. The article has since been updated. The Fool regrets the error.

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 worst ...
Shares of ITT Industries (NYSE:ITT) are falling for their second straight day, today, still smarting from a downgrade that JPMorgan slapped on the company yesterday. Arguing that the twin albatrosses of inflation and a "global credit crisis" will weigh on capital spending over "the next six to nine months," JP warned investors that ITT will probably underperform the S&P 500.

In response, ITT promptly reported a $490 million contract to produce "communications and electronics equipment" for the U.S. military, securing the equivalent of roughly 5% of its annual revenues in a single day.

Doh!
Yeah, it looks as though JPMorgan picked a pretty bad time to go negative on ITT. Yet with the stock dropping even more quickly than the rest of the S&P is, investors appear to be heeding JP's warning. But should they?

Let's go to the tape
For an update on JPMorgan's stock-picking (and bashing) prowess, we turn once again to Motley Fool CAPS. There we learn that JP boasts a CAPS rating just within the top 10%. (Hint: To secure its position, the analyst might want to improve on its record of 52% accuracy.)

Or, judging from the below, perhaps this banker should just refrain from giving auto advice:

Company

JP Said:

CAPS Says (5 Max):

JP's Pick Lagging S&P by:

General Motors (NYSE:GM)

Outperform

*

54 points

American Axle (NYSE:AXL)

Outperform

*

67 points

Group 1 Automotive (NYSE:GPI)

Outperform

**

33 points

Because, as it turns out, JPMorgan is a bit better at picking defense contractors:

Company

JP Said:

CAPS Says (5 Max):

JP's Pick Beating S&P by:

Northrop Grumman (NYSE:NOC)

Outperform

****

1 point

Raytheon (NYSE:RTN)

Outperform

****

6 points

CACI (NYSE:CAI)

Outperform

*****

8 points

If JPMorgan is right that a slowdown in corporate spending will hurt ITT, we're still talking about a six- to nine-month timeframe. Long-term, I have to say that the valuation at ITT looks pretty attractive. Analysts on average expect the company to grow at 13% per year over the next five years. Relative to that pace, the company's price-to-earnings ratio of 15 and its price-to-free cash flow ratio of 14 tell me that at worst, this stock is selling for a slight premium to its worth.

The company's stock has gained 20% -- in a miserable market, no less -- since it was recommended to Inside Value subscribers a few months ago. It might not be a dirt-cheap dream stock, but it's one worth keeping an eye on.

Fool contributor Rich Smith owns no shares of any company named above. You can find him on CAPS, pontificating under the handle TMFDitty, where he's ranked No. 508 out of more than 115,000 players. ITT is an Inside Value recommendation. The Fool has a disclosure policy.