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:

Knives and knaves
In today's edition of MSN's "shot list," Mr. Market has dealt us a straight flush -- seven companies that investors would like to flush down the commode. Not a one of them gets so much as a middling three-star rating on CAPS. Ah, the joys of scraping the bottom of the market's barrel, looking for treasure buried in the crud.

Obviously, we're seeing no obvious winners this week. But we do have a company that more than 60 investors have reviewed, and that's won endorsement from a two-thirds majority of the CAPS All-Star players who've looked at it. With 50 outperform ratings to its 14 underperforms on CAPS, at least a few investors think that radio and TV content provider Westwood One is worth a look.

Ready to bounce?
But will those investors be rewarded for their faith in the company? Let's listen in on what three of our CAPS players are saying about Westwood One:

• CAPS All-Star MylesPatrick argues that as "a content supplier... [Westwood] will do well regardless of the medium (currently radio) that it partners with to broadcast its shows. It owns no radio stations, merely partners with them." Crunching some numbers, he suggests that if "earnings are going to fall by 2% indefinitely and you get a share price of $7.00," at the current price of under $6, "there is practically no downside to this stock and lots of potential upside."
  
• Finding strength in numbers, fellow All-Star nickbaes likes the fact that institutional investing house Hotchkis and Wiley owns 9% of Westwood's stock. It's also worth pointing out that Royce & Associates, one of our favorite investors at Motley Fool Hidden Gems, owns nearly 8% more.
  
• Finally, my Foolish colleague TMFKopp highlights Westwood's copious cash flows as an added bonus -- and perhaps this is the reason the value investors are swarming over this one. With nearly $100 million in trailing free cash flow, Westwood trades for just over five times its free cash flow -- quite a contrast to the nearly 20x multiple to next year's GAAP earnings, and suggestive of hidden value.

Time to chime in
So what do you think? Is this stock cheap "for a reason," or a value just waiting to be realized -- or perhaps both? Crunch the numbers, then come on over to CAPS and tell us what you think.

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

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 No. 630 out of more than 60,000 raters.