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:

Companies are selected from the "New 52-Week Lows" list published on MSN Money on the Saturday following close of trading last week; 52-week high and current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

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 right quick. And so it is that of the five companies most recently arrived on MSN's "shot list," only one earns an above-average rating from CAPS investors.

Ready to bounce?
That company: bone fixer-upper Orthovita, which makes synthetic biomaterial products used in repairing broken bones. With four stars, and 53 CAPS endorsements (including all 20 of the all-star investors who've looked at it) to its name, CAPS players clearly think this one's a winner, penny stock or no. Let's find out why:

• CAPS superstar pennysplants starts us off with a warning that Orthovita is a "thinly traded stock" (which means that in trading it, you're best advised to use limit orders). Trading risks aside, pennysplants thinks this one has "smart management and [an] interesting business strategy" of "purchasing profit-sharing royalty rights" from other companies, for example, Angiotech (NASDAQ:ANPI) and Kensey Nash (NASDAQ:KNSY).
• smegmacles, whose CAPS rating currently sits just under the threshold of all-star status, sees "enormous potential, especially for war wounded," in Orthovita's products.
• Unfortunately (for VITA-bulls), however, the most knowledgeable-sounding pitch currently on record on Orthovita comes from a VITA-bear, NetscribHealthCare, who worries about the company's "rising operating expenses, royalty payments and product development costs." Thanks to increased spending, the company's losses are growing, rather than shrinking, even as its sales gain traction.

I'm sorry, Fools, but I have to go with NetscribeHealthC on this one. As gee-whiz as Orthovita's products sound, "gee" don't pay the electric bill, and at last report, Orthovita was whizzing away its cash at an alarming rate.

Now, that doesn't mean the stock won't prove itself a winner in the long run. If you can make a case for why the company's (few) detractors on CAPS are wrong, you're welcome to try. Just click on over to the company's CAPS page and explain why Orthovita is a buy. Far from being offended at the criticism -- constructive, I'd hope -- we'd appreciate your taking the time to help educate us, and your fellow investors.

Motley Fool CAPS: It's fun, it's free, and it just might make you famous.

House Values is a Hidden Gems recommendation. 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 70th out of more than 25,000 raters.