"Don't catch a falling knife," as the old saw commands. (Pardon my mixing a cutlery metaphor.) The idea of buying a former superstar stock at a discount price certainly has its attractions, but you've got to make sure you catch the haft -- not the blade. That's where Motley Fool CAPS comes in.

Today, we once again stand beneath Mr. Market's silverware drawer, measuring which knives have fallen the farthest. Then we'll call on CAPS to ask which of these stocks -- if any -- Foolish investors believe are ready for a rebound. Let's meet today's list of contenders, drawn from the latest "52-Week Lows" list at Nasdaq.com:

52-Week High

Currently Fetching

CAPS Rating

(5 max):

Double-Take Software (Nasdaq: DBTK)

$26.54

$10.39

*****

PG&E  (NYSE: PCG)

$52.17

$37.66

***

Limelight Networks (Nasdaq: LLNW)

$24.33

$4.68

***

Sprint Nextel  (NYSE: S)

$23.42

$7.11

**

Isle of Capri Casinos  (Nasdaq: ISLE)

$28.24

$9.05

*

Companies are selected from the "NASDAQ 52-Week Low" list published on Nasdaq.com on the Saturday following close of trading last week. 52-week high and current pricing provided by Yahoo! Finance as of the same date. CAPS ratings from Motley Fool CAPS.

Knives and knaves
People say, "Everybody loves a winner." But from the looks of today's list, you could almost believe that investors have come to grips with the fact that even good stocks go down from time to time. Five stocks here have fallen on hard times, but investors are jumping ship on only two of them -- Sprint and Isle of Capri. They seem willing to sit tight on PG&E and Limelight and remain downright enthusiastic about Double-Take.

Naturally, when looking for a bouncer, we're going to go with the stock that investors are most enthused about, so today, join me in a brief review of ...

The bull case for Double-Take Software

  • Typical of the more recent pitches is this one from josephhofmann. "Now the panic is over, the price has stabalized and it's only a matter of time before common sense takes over, people look at the facts and see this solid company may not be worth the $24 it was selling at, but definitely more than the $11 it's currently at."
  • Business-wise, ForceMajeure26 believes Double-Take "offers a much lower cost based solution software compared with others. But I think more importantly for now, they offer their services to small and mid-size companies, not the huge entities that EMC (NYSE: EMC) and Symantec (Nasdaq: SYMC) do. Take a look at their revenue growth-you can see they are doing quite well competing with the big dogs! ... Sales growth, eps growth, cash flows are all moving along very nicely. They also have a strong balance sheet." (Double-Take has essentially no long-term debt, and nearly $65 million in cash, equivalents, and short-term investments.)
  • One of the great things about CAPS is that, at 85,000 investors strong and growing, we're bound to have some members who can offer firsthand experience with the companies they "pitch." Take, for example, CAPS All-Star TheDuncan, who wrote at the beginning of the year, "[Double-Take] purchased a company called 'TimeSpring'. Earlier in 2007 I actually met and had a conversation with the (now former) President and CEO of TimeSpring. Her name is Janae Lee. Data backup and DR is not even a part of my regular day job (I'm a network engineer). But when I saw what TimeSpring's technology does and how beneficial it will be for businesses, and hearing Janae's answers to my tough line of questioning, I was instantly sold. This is 'the' future of data backup and recovery. The fact that Double-Take saw this and took the opportunity to buy up TimeSpring should tell you something. It definitely told me something."

In addition to all the above points in its favor, it turns out that Double-Take is a fairly recent addition to the Motley Fool Stock Advisor portfolio, picked by none other than growth investor David Gardner. But wait! Before you pass on this one, sure in the knowledge that if David recommended it, the stock must be trading for a crazy multiple, I've got news for you: It isn't.

In fact, unless my eyes deceive me or my calculator is feeling frisky, Double-Take looks downright cheap after last month's sell-off. The stock trades for 12 times trailing net earnings, and roughly 12 times trailing free cash flow as well. Yet if you believe the analysts, it's destined to grow its profits at a 24%-per-year clip over the next half decade. That's cheap, people. I honestly don't see how this one can do anything but bounce.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Double-Take, what other CAPS players are saying, or even what David Gardner had said (if you're interested, take a free trial and you can read his buy thesis). We really want to hear your thoughts. Click on over to Motley Fool CAPS and tell us if we should take back our kind words about Double-Take.

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

As mentioned, Double-Take is a recommendation of Stock Advisor. Symantec and Sprint Nextel are both picks at Inside Value. Any of our newsletters can be tried for free for 30 days.

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. 635 out of more than 85,000 players. The Fool has a disclosure policy.