"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 -- if any -- Foolish investors think are ready to rebound to new highs.

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

52-week high

Currently fetching

CAPS rating

Merge Technologies (NASDAQ:MRGE)




Hypercom (NYSE:HYC)




Lexicon Genetics (NASDAQ:LEXG)

$ 5.85



Caspian Services

$ 5.40


Not rated

IXYS Corporation (NASDAQ:IXYS)



Not rated

Princeton Review (NASDAQ:REVU)



Not rated




Not rated

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
The vast majority of the stocks on MSN's "shot" list don't even have CAPS ratings, because they're too small and too illiquid to merit inclusion in our service. Even when a stock that's scraping the bottom of its price barrel does make this list, it's usually pretty widely disdained in Fooldom. That's not the case this week, however; two of the three stocks that have earned "average" three-star CAPS ratings from our players.

Ready to bounce?
That's not a glowing endorsement, to be sure. But Merge and Hypercom aren't being panned, either. Here's what CAPS players are saying about each.

On Merge, which develops clinical and medical imaging software:

  • inl43, who boasts an above average CAPS rating of 60.52, points out that Merge is "currently trading under its book value of $7.40 / share. Also, MRGE currently has zero debt with roughly $1.78 / share in cash on the books."
  • To that, CAPS newcomer rstar5 would add that Merge has "Great cash flow."

What's more, CAPS all-stars -- those performing in the top quintile of our raters -- rate Merge an outperformer, 24 to 3. Hmm.

Similarly, Hypercom, which makes transaction terminals for electronic payments, is highly favored among our all-star analysts. In fact, one of the very best Wall Street firms, and the second-best player in all of CAPS, downwithpumpers, both think this stock will outperform the market.

Are they being too generous? Too overconfident, contradicting the Wisdom of the Street? If you've got an opinion on either Merge or Hypercom, or indeed, on any of the other companies listed above, go to Motley Fool CAPS now, and tell us what you think.

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 30 out of nearly 21,000 raters.