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...
Times are tough for Wall Street's Wise Men. A once-in-a-century economic storm has blown up some of the investment bankers' biggest bets, leaving the industry's reputation (such as it was) in tatters. Nonetheless, a very, very few bankers have weathered the storm with their reputations intact.

Thankfully for pharma investors, Banc of America Securities is one of them.

With 52% accuracy on its stock picks, and a record of beating the market by better than three points per pick on average, the venerable B of A ranks in the top 10% of Wall Street analysts tracked by CAPS. So when B of A launched its coverage of Big Pharma last week, I just had to take a gander at what it's thinking.

Most drugs are boring...
While it's early in the game, B of A isn't terribly impressed with most drug shops thus far. Wyeth (NYSE:WYE), Merck (NYSE:MRK), Bristol-Myers Squibb (NYSE:BMY), and Eli Lilly (NYSE:LLY) each merit only "neutral" ratings, according to one report. But the banker did give thumbs-up to two drugmakers.

...but these two sound fun
Opining that Schering-Plough (NYSE:SGP) faces the least risk of generic competition of the group, and praising Pfizer (NYSE:PFE) for its strong cash position, cost-cutting initiatives, and growing presence in Asia, B of A says these are the two to buy. Nor do I believe that Pfizer's announcement that it is jumping into stem cell research affected B of A's rating. The two news items were released nearly simultaneously, which tells me that B of A decided Pfizer was a buy without factoring in the stem-cell development.

But a Fool has to wonder: Does Pfizer's plunge into experimental stem-cell research unravel B of A's investment thesis? I'm no biochemist myself, nor do I play one on TV, but even a lay observer can tell from Geron's (NASDAQ:GERN) income statement that stem cells are costly little buggers to study. The stem-cell pioneer spent nearly a fifth of its own market cap on research and development last year!

That's is precisely where B of A's comment about Pfizer's cash-heavy balance sheet comes into play. Tiny Geron may have spent $54 million on R&D last year. But Pfizer spends more than 130 times as much for its own R&D. If anyone's got the deep pockets necessary to make a go at stem-cell commercialization, it's Pfizer, given its $10 billion in net cash.

What's more, stem cells would be just a small piece of the Pfizer pie. Slice into the rest of the company, and I think you'll find that Pfizer is selling for a price that's every bit as nice as B of A says. Pfizer trades for an enterprise value-to-free cash flow ratio of about seven -- cheap by any measure.

As for growth estimates -- well, analysts don't expect a lot from Pfizer. In fact, they're predicting essentially flat profits for the next half-decade. However, the pharma industry in general is still expected to grow at nearly 8% per annum. Suffice it to say that I think it unlikely that a giant of Pfizer's stature will stand stock-still while the rest of its industry keeps growing.

Foolish takeaway
But even if I'm wrong about that, the simple fact of the matter is that you can profit nicely from Pfizer, even if it doesn't grow at all. Right now, Pfizer's stock pays a fat 7.9% annual dividend. With that dividend to lean on, Pfizer won't have to outgrow the Street's estimates by much more than a percent or three to beat the S&P's average returns handily.

Two separate Motley Fool newsletters have recommended Pfizer. If you want the Fool story on Pfizer's profit potential, grab yourself a free copy of either Inside Value or Income Investor (or take both -- they're free!), and read why our advisors like it for yourself.

Eli Lilly is also an Income Investor recommendation, and the Fool owns shares of Pfizer.

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. 1,653 out of more than 120,000 members. The Fool has a disclosure policy.