Editor's note: The prior version of this article said that Sierra Wireless was trading at 20 times its 2004 earnings, the same as its competitor Novatel. This is inaccurate. Novatel is trading at 50 times its 2004 earnings. We regret and apologize for the mistake.

Value investors will tell you that it's always wisest to buy when everybody else is selling. It sounds simple enough: Just wait until people are really pessimistic about a company, and then pluck up its stock.

You can bet that traders are putting in buy orders for Sierra Wireless (NASDAQ:SWIR). Shares in the Canadian wireless modem card technology maker hit the skids this summer after the company lost business with palmOne (NASDAQ:PLMO). Sierra had supplied cards for palmOne's Treo 600 smartphone, but palmOne decided to make its own or work with another partner.

Regrettably, bottom fishers will be dismayed to find out that even after the drop, at $17.90 Sierra Wireless is still a risky proposition, just as it was earlier in the year when the shares were at their $46.00 peak.

Of course, there's the argument that Sierra Wireless is one of only three preferred vendors in the fast-growth wireless PC card market. But Fools take note: Now that the mobile data market is taking off, Sierra Wireless' leadership will be under pressure. Kyocera plans to launch a wireless card that could upset Sierra's juicy deals with AT&T Wireless (NYSE:AWE) and Verizon (NYSE:VZ). As Ericsson or Samsung muscles into the market, Sierra's premium-priced cards could quickly become low-price commodities.

Sierra Wireless hopes that its smartphone, the $499 Voq launched earlier this year, will diversify revenues away from PC cards. But let's be frank: The smartphone market is already bursting at the seams with competing products, and vying against Research In Motion (NASDAQ:RIMM) and Nokia (NYSE:NOK) will, at best, be an uphill battle for Sierra.

Sure, the stock is down, and in the short term Sierra Wireless will likely benefit from the bulging market for mobile data services. But over the longer term, it's hard to make out an upside. When weighing the risks and rewards on Sierra Wireless, the risks still have it.

For more Foolish analysis, see Sierra Wireless' Stunning Ascent.

Fool contributor Ben McClure hails from the Great White North. Ben doesn't own any shares mentioned here.