Get Ready for the Bounce

"Don't catch a falling knife," as the old saw commands. (Pardon my mixing a cutlery metaphor.) The idea of buying a former superstar stock at a discount price certainly has its attractions, but you've got to make sure you catch the haft -- not the blade. That's where Motley Fool CAPS comes in.

It's been awhile, but thanks to last week's sell-off, we once again have a chance to stand beneath Mr. Market's silverware drawer in hopes of snagging a bargain. Let's meet today's contenders:

Companies selected from the list of stocks hitting new 52-week lows as reported on finviz.com.
Recent price and 52-week high provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

The week in weak stocks
It was a rough week for stock investors. Surprisingly bullish news out of Google notwithstanding, the broader S&P 500 index ended Friday down 2.1% from where it had begun.

Surprisingly, Google was not the only stock to show strength. Among big bankers, Capital One, Citigroup, and JPMorgan Chase all managed to beat estimates in their quarterly reports. Delinquencies are down in the loan departments. Folks are using their credit cards more often, and paying on time. And JPMorgan, at least, announced a sharp increase in profits from investment banking. Regardless, we find both Morgan Stanley and Bank of America populating this week's list of losers. A Fool can wonder if this sets the stage for a couple more "earnings beats" when they report later this week ...

For the time being, investors aren't betting on that happening. Share price weakness also suggests pessimism about Human Genome's impending earnings report (despite the company's winning approval to market Benlysta in Europe), and even more worry about Clearwire's results (due out early next month), as Clearwire is named one of the Nasdaq's most-shorted stocks.

These stocks' weak prospects are reflected in investors' assigning them mediocre two- and three-star ratings on CAPS. One stock on today's list shines brighter than all the rest: Five-starred Turkish cell-phone operator Turkcell. Let's find out why.

The bull case for Turkcell
CAPS member ichangedmyuserid thinks Turkcell is "great":

First of all, it's a great way to allocate into emerging markets. Second of all, on a bottom-up basis, it's a great company. It has the majority market share in Turkey, and is priced fairly with a low P/E of about ten and an extraordinarily high dividend yield ...

CAPS member FUZZYMINKINS seconds the emotion, calling Turkcell a "great company" with a "great dividend." And some of CAPS' best investors agree. All-Star tenmiles has been singing Turkcell's praises for months, citing its "attractive dividend [and] signficant FCF" as reasons it will be a "likely market beater on a total return basis for those with 3-5 year horizon."

Turkcell: More than meets the eye
Some of those comments may come as a surprise to you. For example, while Yahoo! Finance data agree that Turkcell has the low, low price so many Fools like -- 10.3 times earnings -- this popular financial data site reports that Turkcell doesn't pay any dividend at all. (!)

But that's simply not true. According to our own data provider, the Capital IQ division of Standard & Poor's, Turkcell is one of the more generous dividend payers out there, boasting a dividend yield of 7.6%. That blows away the payouts at U.S. telecoms Verizon (NYSE: VZ) and AT&T (NYSE: T), which pay 5.3% and 5.7%, respectively.

Just goes to show you should never rely on just one source for your stock research needs.

Foolish final thought
Of course, there's a reason this generous dividend payer is selling so cheap, and that reason is growth -- or rather, the lack thereof. According to Wall Street analysts, Turkcell is likely to grow its earnings at only about 2.8% per year over the next few years. That's slower growth than Verizon and AT&T are pegged for. On the flip side, with expectations so low, almost any improvement at all in Turkcell's prospects could send the stock flying.

For now, I think paying 10.3 times earnings for 2.8% growth and a sustainable 7.6% dividend yield is no worse than a fair price for Turkcell. With plenty of upside if the growth estimates prove conservative, Turkcell gives adventurous foreign-dividend seekers a good chance at catching a bounce. But what do you think? Is Turkcell's dividend big enough to tempt you to invest outside U.S. borders? Is its single-digit growth rate fast enough for an "emerging-market" stock?

Tell us what you think -- on Motley Fool CAPS.