5 Superball Stocks

"'Don't catch a falling knife' ... 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."

So runs the thesis of my recurring Fool column "Get Ready for the Bounce," in which we search among the wreckage of Mr. Market's overturned cutlery drawer, hoping to find future winners in a pile of 52-week losers. But do we really need to sit around for a whole year, waiting for a potential bouncer?

I say "no." Sometimes, stocks fall far in far less time than a year -- and like a superball dropped from the balcony, the harder they fall, the higher they bounce. Today, we're going to look at a few equities that've suffered dramatic drops over the past week. With a little help from the 145,000 members of Motley Fool CAPS, we hope to find an opportunity or two for you:

Companies are selected by screening on finviz.com for abrupt 10% or greater price drops over the past week. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.

Five super falls -- one superball
After two "down" weeks that left the S&P 500 nearly 7% poorer than it began, investors finally tapped the brakes last week. The index lost less than 1% -- but not all stocks fared so well. Each of the five named above racked up losses more than 10 times the average.

As predicted, MasterCard disappointed investors with its earnings Thursday. Likewise, MannKind failed to cut its losses enough to please the Street. But Frontline shares fell for no apparent company-specific reason, instead simply tracking the general slide in oil stocks like BP and ExxonMobil (NYSE:XOM). And the cruelest cut of all: American Superconductor actually beat the Street and guided higher for the fourth quarter ... yet fell nonetheless.

The bull case for Spirit AeroSystems
Much like American Super, Spirit AeroSystems more than doubled its fourth-quarter profits. But its forecast for next year proved disappointing, with profits estimated at 14% below consensus, and backlog continuing to slip. (Sound familiar?)

Yet this "disappointment" doesn't faze CAPS member mricruz2009, who insists Spirit will turn it around. Why? "Our airline industry is set to take off with new aircraft and fuel efficiency," says he. And he's not the only one. Fellow CAPS member dt44 argues that the: "Cyclic growth cycle looks positive for at least 5-7 years for B-737, B-777. Boeing (NYSE:BA) 787 contractor will see benefit moving forward."

Can Spirit fly?
And maybe they're right. Maybe this is the year that Boeing turns itself around, and investors in major parts suppliers like Spirit get their long-awaited profits. After all, Boeing seems to have its 787 program back on track, and if the rumors are right, it could begin testing the new 747-8 as early as today. With 288 investors putting their reputations on the line, arguing in favor of Spirit, maybe I'm a Fool to say that I'm right, and they're all wrong.

But that's what the numbers tell me.

According to Spirit's earnings report, the company "earned" nearly $192 million in profit last year. But this same report admits (a little farther down below the headline) that Sprit's still burning cash like it's going outta style. Free cash flow ran to negative $242 million last year, and long-term debt ballooned to $885 million. To my Foolish eye, these are not the marks of a healthy business.

Foolish takeaway
A couple of weeks ago -- back when Spirit was still flying high -- I questioned whether this "rocket stock" might actually turn out to be a dud of an investment, and concluded:

Between its hefty debt load, its history of burning cash, and its not-cheap P/E ratio in the high teens, I wouldn't rush out right now to load up on Spirit AeroSystems shares. To the contrary, if you've benefitted from the remarkable run-up in the stock price this year, I would seriously consider taking some profits off the table -- "sell the news," as the experts say.

Until I see Spirit produce better numbers, I'm sticking with my original opinion.

(But that doesn't mean you have to agree. If you've got a different take on Spirit AeroSystems, we'd love to hear it. Click over to Motley Fool CAPS now, and sound off.)