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 a while, 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 intraday 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
Last week wasn't a great one for stocks, as more than 3,000 of Wall Street's best and brightest saw their market caps decline. Citigroup lopped $11 off its price target for Human Genome Sciences, stranding the stock at a 52-week low for the second week in a row, and it's not alone. China Life is languishing, despite improved prospects for the firm's plans to expand overseas. Government contractor SAIC got crushed after reporting an earnings miss Thursday. And Aixtron got axed ahead of what could be a good-news week, as rival Veeco Instruments gears up to produce some positive PR at the Citi Technology Conference in New York City Wednesday.

Overall, investors seem blase about the prospects for many of these stocks, handing out only two- and three-star CAPS ratings to most of them. One company Fools are optimistic about is Motley Fool Global Gains recommendation Coca-Cola Hellenic Bottling. Let's find out why.

The bull case for Coca-Cola Hellenic Bottling
Less well-known than its namesake, Greece-based Coca-Cola Hellenic is one of the largest bottlers and vendors of Coca-Cola products. CAPS member CashMyChips says the company "operates primarily in the rapidly growing markets of eastern europe, where demand for coca cola products is much lower than in the west, and has been growing profits rapidly ... "

And why wouldn't it? As CAPS member LSchwab1 points out: "The world drinks [Coke] in good times and bad."

Which may be why All-Star investor kkconway writes rhetorically: "Lose money with Coca-Cola? Not even in Greece. Not anywhere!"

Of course, while not losing money is good, making a bit of money off Coca-Cola Hellenic would be even better. What are the chances of that happening?

Actually, I think the chances are pretty good. At just 11.6 times forward estimates, the stock's not especially pricey. It's cheaper than both Coca-Cola Co. (NYSE: KO) and its archrival, PepsiCo (NYSE: PEP), and even cheaper than the average forward P/E on the Dow Jones Industrial Average (INDEX: ^DJI). Invest in Hellenic, and I doubt there's much risk that you're "buying high" today in order to "sell low" tomorrow. Plus, Hellenic is a strong producer of free cash flow, with trailing cash profits of $684 million -- 31.5% ahead of reported GAAP earnings. Compare that to PepsiCo, where free cash flow is just 77% of reported income, or to Coke, where FCF is just half reported net profit!

Time to chime in
About the only black mark I see against Coca-Cola Hellenic's prospects for a bounce is the low expected future growth rate -- just 6.5%. But if the company should manage to leap that low hurdle, the bounce could be even bigger. And with "Coca-Cola Classic" expected to grow 8% over the next five years, does it really make sense to expect a Coca-Cola entity, located in the high-growth Eastern European market, to grow slower than the classic company?

Personally, I think the opposite is more likely. That's why I'm voting with the majority today, and predicting Coca-Cola Hellenic Bottling is due for a bounce.

Disagree? Feel free. Click over to Motley Fool CAPS and tell us why.