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

Time to buy Buffett?
When the Wall Street wizards at Stifel Nicolaus announced last July that they were "selling Buffett," slapping a "sell" rating on his Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) conglomerate, the decision caused a bit of controversy. How dare they sell greatest investor of all time? As I wrote at the time: "The analytical woods are full of analysts hunting small fry, but it takes real brass ... bullets ... to go bear hunting with Warren Buffett in your sights."

But as it turns out, Stifel was sort of right. Berkshire's class A stock has gained about 10% since Stifel said to sell it -- but the S&P 500 has risen 20% in the same period. If you'd taken Stifel's advice, sold Berkshire last summer, and put the proceeds in a plain-vanilla S&P 500 ETF (NYSE: SPY), you'd be richer today for it.

Take a bow, throw in the towel
That's why it's so interesting to hear that Stifel has now changed its mind. Buoyed by Buffett's bullish tone in the annual shareholder letter Berkshire issued over the weekend, Stifel announced Monday that it's declaring victory, cashing in its chips, and revoking its "sell" rating on Berkshire stock. While it's not yet convinced that Berkshire is a buy, Stifel doesn't believe that Berkshire's large stakes in Home Depot (NYSE: HD), Johnson & Johnson (NYSE: JNJ), and Bank of America (NYSE: BAC) will drag the holding company's stock down. (For one thing, Buffett no longer even owns Bank of America, having hopped off that horse to add more of Wells Fargo (NYSE: WFC) instead.)

To the contrary, Stifel argues that amid the economic recovery," Berkshire's equity holdings could help the parent company's shares going forward. Since most of these stocks have underperformed Berkshire since June, their reversion to the mean would indeed boost Berkshire's fortunes. Meanwhile, Stifel predicts that "recovery-driven earnings growth" among Berkshire's own businesses "should offset declining underwriting results and lower reinvestment yields as borrowers repay crisis-era debts."

In short, the stock has underperformed the market as predicted -- but things are bound to get better for Berkshire, Stifel says.

I disagree.

Valuation matters
Right now, Berkshire Hathaway's $13 billion in net earnings give the stock a P/E ratio of 16.6. That price looks a bit optimistic in light of Wall Street projections that Berkshire will only be able to grow its earnings at about 5% per year over the next five years.

I know that Buffett's latest letter told you to ignore his company's net income, and focus instead on operating results and growth in book value. Still, with all due respect to the Oracle, whenever a CEO of a company tells me to "pay no attention" to a certain number behind the curtain, I get an itch to do the opposite.

Indeed, over the past five years, Berkshire's operating earnings have compounded at an annual rate of 11.7%, while tangible book value's grown at only 9.8%. While these rates surpass the pace of Berkshire's projected earnings growth, they also seem insufficient to justify its share price.

What's more, the number I prefer to focus on when valuing a company -- free cash flow -- reveals that Berkshire's even more expensive than its GAAP earnings would suggest. With $11.9 billion generated over the last 12 months -- 8% below reported earnings -- Berkshire currently trades for 18.2 times the amount of cash it generates in a year. Add in the company's $20 billion in net debt, and Berkshire only looks more expensive.

Foolish takeaway
Daring to question the wisdom of investing with the Oracle of Omaha is rarely a popular opinion. Here at the Fool, two of our newsletters have publicly recommended buying Berkshire. I gave props to Stifel for braving the critics last summer, and I don't fault them for quitting while they're ahead this week.

But from where I sit, the situation hasn't changed: Berkshire Hathaway's growth is slowing, and its CEO is retrenching. Meanwhile, the stock price continues to reflect increasingly unwarranted optimism about the company. Berkshire may be the "hold" that Stifel now says it is, or the "sell" I think it still is. Either way, it's not a stock you should buy -- at least, not at this price.