"The bigger they are, the harder they fall." Every investor's worst nightmare in today's market is to buy a hot stock just before it takes a nosedive.

Every day, Nasdaq.com publishes a list of stocks whose shares have just hit 52-week highs. And every day, investors read the list and tremble -- some with greed, others with terror. On our Motley Fool CAPS investing community, these top stocks usually enjoy favorable ratings, since everyone loves a winner. But what should you do when some of CAPS' smartest investors pan one of these hot stocks?

For starters, consider using the 52-week-high list as a starting point for further research. Stocks can rise for many reasons, but a little help from Motley Fool CAPS can make it easier to figure out how worthy those reasons are. Let's see what the more than 83,000 stock gurus (and counting) in CAPS have to say about the latest contenders.

Stock

One Year Ago Today

Currently Fetching

CAPS Rating

Permian  Basin  (NYSE: PBT)

$15.04

$17.93

*****

Respironics  (Nasdaq: RESP)

$42.12

$65.75

****

Titan Machinery (Nasdaq: TITN)

N/A

$19.50

****

Olympic Steel  (Nasdaq: ZEUS)

$28.93

$38.04

***

Priceline.com  (Nasdaq: PCLN)

$51.87

$123.86

**

Five stars = highest possible CAPS rating; one star = lowest. Companies are selected from the "NASDAQ 52 Week High" list published on Nasdaq.com on the Saturday following close of trading last week. One-year-ago and current pricing from Yahoo! Finance. CAPS ratings from Motley Fool CAPS. N/A = not applicable; Titan Machinery started trading Dec. 5, 2007, at $8.50.

Everybody loves a winner
When stocks soar on the wings of success, bears become rare. So it's not surprising to see most of the stocks on this week's list rated above average. In fact, just one stock falls short of the three-star cutoff for average sentiment. And -- surprise! -- it's a Motley Fool Stock Advisor selection.

You know which one I'm talking about: William Shatner's favorite paycheck signer, Priceline.com.

The bear case against Priceline.com
What do investors have against naming their own price? Not a lot, as it turns out. Here are three of the most substantive CAPS objections to Priceline.

  • SlamDunkEarly warned of a "price growth stall" from the "run-up in the past year of the [price-to-earnings ratio] and a normalization as in the e-banking sector once the dust settles from the dog fight between Orbitz (Nasdaq: OWW), Expedia (Nasdaq: EXPE) and Priceline for your summer travel." This pitch was posted in August.
  • MeirRatsky echoed the sentiment in early December, by arguing that the "risk/reward is unfavorable, despite management's recent ability to play the expectations game all too well. With a major correction, it could again be a good investment (like below 50% of today's price at best)." The implication is that you wouldn't want to be holding the stock before that correction happens.
  • And CAPS All-Star JCash22 says Priceline has "no economic moat" and is "overvalued."

Sense a common theme? Yep. All three Priceline bears I've quoted here -- and several more I haven't -- say the only thing keeping them from owning Priceline is the, er, price. So let's take a look at the valuation.

Priceline shares change hands for 39 times trailing earnings -- pretty steep for a projected 25% grower. And it gets worse. With free cash flow backing up just 78% of GAAP earnings at last report (the company still hasn't released its end-of-year cash-flow statement), Priceline carries a price-to-free cash flow ratio of 44. With that number staring me in the face, I'm afraid I must agree with our bears today -- Priceline is overpriced.

Disagree? Feel free. Come on over to CAPS, and make your case that Priceline's price is right.

Does Stock Advisor still think Priceline's a buy, even at today's share price? Take a free 30-day trial and find out.

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 ranked No. 645 out of more than 83,000 players. The Fool has a disclosure policy.