Get Ready for the Bounce

"Don't catch a falling knife." Thus commandeth the old saw (to mix a cutlery metaphor).

But if people weren't tempted to catch cutlery in the first place, there'd be no need for this little bit of investing wisdom, would there? The idea of buying a former highflier at a discount price certainly has its attractions. The trick, of course, is to increase the odds that when you make your grab, you're catching haft, not blade. That's where we come in.

In The Motley Fool's continuing effort to keep your investing dollars safe, today we once again assume our position beneath Mr. Market's silverware drawer. As the knives plummet, we'll measure who's fallen farthest. Then we'll head over to Motley Fool CAPS and ask which of these stocks Foolish investors think are ready to rebound to new highs -- if any.

With that said, let's meet today's list of contenders, drawn from the latest "52-week lows list" at MSN Money:

Knives and knaves
Once again, our list proves the converse of the "everybody loves a winner" maxim. When a stock falls on hard times, its popularity evaporates quickly. And so it is that of the five companies most recently arrived to MSN's "shot list," only one earns an above-average rating from CAPS investors.

Ready to bounce?
KVH Industries develops, manufactures, and markets mobile communication and navigation products. With four stars and 13 CAPS endorsements (including all six of the All-Star investors who've looked at it) to its name, CAPS players seem to think this small cap has a big future.

To explain this bullish enthusiasm, I ventured into the Motley Fool CAPS community to find some foolish advice on KVH. Here's what NetscribeTech has to say:

With mobile video users in U.S. alone expected to touch 20 million and other aspects like gaming, internet usage all expected to increase by leaps and bounds, the market looks very lucrative. From KVH industries point of view they expect the commercial business to grow by 17% and defense business by 21%.

Historically, NetscribeTech notes that KVH's "Net revenue increased by 15% for the nine month period ended September 2006 backed by a 21% increase in defense business and 15% increase in commercial business."

Additionally, I'd add that KVH is profitable, generated $3.1 million in free cash flow over the last 12 months, and is expected to grow its profits at 30% per year over the next five years.

Time to chime in
Is this recent plummet a temporary mishap creating a bargain stock? Or is it the market correcting an overvalued firm to a price closer to true intrinsic value? If you've got an opinion, come on over to CAPS and tell us about it.

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 137th out of more than 27,000 raters. The Fool has a disclosure policy.