Editor's note: An incorrect version of this article was mistakenly published. The corrected version follows. The Fool regrets the error.

"The bigger they are, the harder they fall." It's the worst nightmare of every investor in today's market -- buying a hot stock just before it takes a nosedive.

Every day, Nasdaq.com publishes a list of stocks whose shares have just hit new 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 86,000 stock gurus (and counting) in CAPS have to say about the list's latest contenders:


One Year Ago

Currently Fetching

CAPS Rating (5 max):

Whiting Petroleum  (NYSE: WLL)




Cabot Oil & Gas  (NYSE: COG)




Cross Timbers Royalty Trust (NYSE: CRT)




Central Fund of Canada  (AMEX: CEF)




Agnico-Eagle Mines  (NYSE: AEM)




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 provided by Yahoo! Finance, as of the same date. CAPS ratings from Motley Fool CAPS. Everybody loves a winner
The old saying holds true again today. None of our five companies, newly arrived on the 52-week high list, gets rated as an underperformer on CAPS. To the contrary, our community of lay and professional investors thinks that these stocks will keep on outperforming the S&P 500.

Build-a-bear, anyone?
With optimism prevailing this week, I'm hesitant to suggest that any stock on today's list looks "ready for the fall." But we can at least highlight a few negative sentiments that could -- if they play out -- foretell a stumble. Reviewing the stocks on today's list, we find that Whiting has no negative pitches on file, but everyone else does. Herewith, a survey of the knocks against:

  • Cabot Oil & Gas: ReInAd points out that "[i]nsiders have been dumping heavily" and that Cabot is [s]elling at 4-5 times book and nearly twice the industry P/E average." Indeed, Anadarko (NYSE: APC) and Chevron (NYSE: CVX) are both projected to grow about 7% per year for the next five years, compared with about 10% for Cabot, yet those two sell for single-digit multiples to earnings -- versus Cabot's 31-times multiple.
  • Cross Timbers Royalty Trust: CAPS participant cswiii criticizes this company for its "[l]ower recent distributions." But I don't see a problem here. Over the past five years, the yield has averaged 7.4%. The forward-looking yield is expected to be about 8.3%, based on current price and expected payouts.
  • Central Fund of Canada: CAPS All-Star Lammergeier40 pointed out in late January that "[w]hen gold & silver were in disrepute, investors also incurred a discount to NAV. But lately there's a 3-10% premium to NAV, which makes little sense."
  • Agnico-Eagle Mines: Similar argument on this one, and again, from an All-Star investor. As member chuckpin stated earlier this year: "Commodities have been so inflated and with a slowing economy, they will eventually return to normal levels - anticipated by 2009."

To reiterate -- on balance, CAPS investors are confident that these stocks will beat the market over the long-term. But if the majority is proved wrong, remember the Foolish words of the minority quoted above. They'll be the ones whispering: "We told you so."