"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

Recent Price

CAPS Rating (5 Max):

Valero (NYSE: VLO)




Tesoro (NYSE: TSO)




Western Refining (NYSE: WNR)




Grupo Aeroportuario del Centro Norte (Nasdaq: OMAB)




Coca-Cola Enterprises  (NYSE: CCE)




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 recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Knives and knaves
If there's one good thing about a broad-based market sell-off, it's that you find a lot of terrific companies getting the old "baby and bathwater" treatment. Tossed out on their rosy little bums as if they were bums of another sort. You know -- just know -- that some of these babies are gonna bounce right back once the suds subside.

This week, we hear wails emanating from the likes of Coca-Cola's (NYSE: KO) favorite bottler and Motley Fool Global Gains' favorite, er, airport. Meanwhile, three of investors' favorite picks from the oil industry over the past five years -- refiners Valero, Tesoro, and Western Refining -- have one-year stock charts that only a mother could love.

Or so you might think. As it turns out, the refiners top our list in Foolish popularity, and at the very tippety-top sits Valero. What's more, the better investors among us -- the CAPS All-Stars -- are more bullish than most on Valero, with nearly 98% giving the stock the thumbs-up. Here's why.

The bull case for Valero
So what's with Valero, anyway? Aren't high oil prices supposed to be good for everyone in the industry? Hardly. Rather, Valero pays high oil prices for crude, then tries to eke out some profit by refining it into usable fuel, and selling it downstream.

As KnightofShadows explains, Valero and its compatriots face much the same situation hurting the car owners to whom they supply gasoline:

Valero's margins are being squeezed by high oil prices. When oil prices eventually drop, and they will, Valero's margins will improve. The current commodity/oil cycle is about to end, and I expect to see oil back in the $70-$80/barrel range soon.

rhallbick boils down the strategy for us:

Buy refiners when crack spreads have been squeezed. Sell refiners when crack spreads are wide (unless you love volatility in your portfolio). Long term, they can sell all that they can make, they just have to accept the current market price. Just re-established my real position in [Frontier (NYSE: FTO)], just because I like those guys a lot. I don't know what the catalyst will be to improve their spreads again, but something will change. It always does.

And while you wait for that catalyst to arrive, sammaster has some words of reassurance about the value of the company: It is selling for "below replacement value ... upgrading to process even more sour/heavier oil" (Venezuelan crude, and Canadian sand, anyone?). Also, the company's busy doing "share buybacks/debt payoffs" and "selling non core refineries that [don't] process complicated crude will bring more cash."

Sounds good to me. And I have to say -- the price-to-earnings ratio of nearly 6, when paired with profits growth that analysts project at 12% per year long-term, looks mighty enticing.

And the risk? If Goldman Sachs is right about $200 crude, all bets are off -- and on Valero, the stock price could be off big time.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Valero -- or even what other CAPS players are saying. We really want to hear your thoughts. Click on over to Motley Fool CAPS and tell us what you think.