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...
"Best" may not be quite the right word to describe Cowen & Co. But in a world where stock shops like JPMorgan and Citigroup are flailing around near the 20th percentile of ranked CAPS investors, I'll take advice from 70th percentiler Cowen over the Wisdom espoused by its name-brand peers any day of the week. And especially the advice that Cowen gave us yesterday, when it upgraded Northrop Grumman (NYSE: NOC) to "outperform."
Let's go to the tape
Why? Well consider who the advice is coming from. Perhaps best known for its prescient pick of First Solar (back before they became famous), and a string of biotech victories ...
Company
Cowen Said:
CAPS Says:
Cowen's Pick Beating S&P by:
FirstSolar (Nasdaq: FSLR)
Outperform
**
483 points
Barr Pharmaceuticals (NYSE: BRL)
Outperform
****
94 points
ViroPharma (Nasdaq: VPHM)
Outperform
*****
58 points
... Cowen's overall performance as a stockpicker looks rather hit-or-miss -- emphasis on "miss." 58% of the time Cowen tells you a stock will rise, or that it will fall, the cussed thing goes and does the opposite. Were it not for such home run hits as the three named above, the analyst would be doing far worse than its current average 2.5%-per-pick outperformance of the S&P 500 suggests.
But here's the thing
In contrast to its scattershot record overall, Cowen's put together an amazing string of success stories in the defense industry:
Company
Cowen Said:
CAPS Says:
Cowen's Pick Beating S&P by:
Raytheon (NYSE: RTN) Continued... |