Get Ready for the Fall

"The bigger they are, the harder they fall." This old saying sums up the worst nightmare of every homeowner, every gold buyer, and every investor in today's market. Dare ye buy at the top?

Every day, MSN Money publishes a list of the market's top stocks -- the companies whose shares have just hit their highest intraday price of any time in the past 52 weeks. Every day, investors read this list and tremble -- some with greed (big mo', baby!), and others in pure, unmitigated, acrophobic terror (whatever you do, don't look down).

Over on Motley Fool CAPS, thousands of investors just like you are watching these same companies and voting their gut on whether they'll keep rising or stumble and fall. Usually, the ratings wax optimistic as stocks hit new highs -- because everyone loves a winner. But what do you make of it when some of the smartest investors out there are panning a hot stock?

You could heed them. You could ignore them. You could take the stock tickers and construct anagrams from 'em. For my money, though, the best course of action is to use the "52-week highs" list as just a starting point for further research. After all, stocks can go up for many reasons, and it's up to you to decide how worthy those reasons are. But thanks to Motley Fool CAPS, now you don't have to make the decision alone.

With that said, let's meet today's list of contenders, drawn from the latest "52-week highs" list at MSN Money. What does our panel of more than 28,000 stock gurus (and counting) have to say about them?

Everybody loves a winner
When stocks soar ever higher on the wings of success, bears become rare. So it's no surprise that investors love most of the stocks on today's list. The sole exception: network infrastructure specialist Juniper Networks.

Over on CAPS, Juniper gets the thumbs-down from one out of every four investors who've rated it. The better the investor, the worse the sentiment -- 29% of CAPS All-Stars who've rated the stock think Juniper will underperform.

The bear thesis on Juniper

• All-Star TomFoolNC thinks Juniper will underperform because "Cisco is stealing Core Routing share from Juniper."
  
  
• gaf12 doesn't see this changing any time soon, arguing: "Cisco is going to kill Juniper. I don't see the advantage Juniper brings to the table other than the room to grow. Unfortunately, they need to grow through Cisco's market and I don't see that happening."
  
  
• But perhaps the best bear argument of all comes from a CAPS player still a bit shy of an "All-Star" score. LiLNipsFatal writes: "I believe CSCO is pretty close to fairly valued at a P/E of roughly 28, P/S of around 5, and P/CF at around 18. Juniper is similarly valued at 32 times earnings, about 5 times sales, and 18 times cash flow. CSCO is the market leader and deserves the premium valuation ... Juniper does not deserve the same market premium CSCO commands as the market leader."

Just one point of clarification before we close. The P/Es that LiLNipsFatal cites are "forward" P/Es, based on what Cisco and Juniper are expected to earn next year. On a trailing basis -- what the firms have actually earned over the last year -- Cisco is a bit pricier, at 26 times earnings. Then again, Juniper doesn't even have a trailing P/E. That's a prize reserved for firms that avoid losing $1 billion in their last 12 months.

Bears wanted. Bulls, too.
So what do you think, investors? Is Juniper doomed to play eternal second fiddle to Cisco? Or can it surpass its better-known peer and grow into its valuation? If you've got an opinion, we're willing to listen. Come on over to Motley Fool CAPS and make your voice heard.

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 273 out of more than 28,000 raters. The Fool's disclosure policy would like to point out that Union Pacific's ticker can be rearranged to spell PUN.