"Don't catch a falling knife," sayeth the sage. 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.

Yet again, we're upending Mr. Market's kitchen drawers and watching the knives tumble. We've already sifted through the silverware on the NYSE. Now it's time to take a stab (pardon the pun) at bargain hunting on the Naz. As always, our guides in this endeavor are twain -- we start with the latest "New 52-Week Lows" list at WSJ.com, then crunch the numbers on investor sentiment at Motley Fool CAPS:

 

52-Week High

Recent Price

CAPS Rating

(5 max):

Akamai (NASDAQ:AKAM)

$41.45

$14.12

****

Google (NASDAQ:GOOG)

$747.24

$332.00

***

JDS Uniphase  (NASDAQ:JDSU)

$15.95

$6.75

***

Ciena (NASDAQ:CIEN)

$49.55

$7.27

***

Broadcom  (NASDAQ:BRCM)

$43.07

$14.86

***

Companies are selected from the "New 52-Week Lows" list published on WSJ.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.

Eenie, meenie, market woe
Last week was a bear. Literally. Right now, you can play "eenie, meenie, minie, moe" on both the Amex and NYSE -- and every time you say "eenie" or "minie," you'll be pointing at a stock hitting a 52-week low. That's right, folks. Half the stocks trading on these exchanges in the U.S. hit bottom last week. Half.

Things weren't quite that bad on the Nasdaq, but it was only a matter of degree. The Naz booked 619 52-week lows -- that's one stock in five. So if the carnage on the markets has you thinking the sky is falling, well, I can't blame you. It's ugly out there.

But here's the good news: I've been running some numbers on the market's biggest losers, trying to find the potential winners. And guess what, Fools? Focusing on the Nasdaq alone, I found five names that have at least been rated a respectable three stars by our CAPS community. All of 'em have hit bottom. All of them have genuine bounce potential -- but in the minds of CAPS players, one has more potential than all the rest. And that's why today we'll be reviewing ...

The bull case for Akamai

  • Back in July, rokku gave us a short intro into who Akamai is, what it does, and why we should care: "internet speed is more important than most people realize. The US dose not have enough bandwidth, so the only way to get more speed is by optimizing what we've got. That's where Akamai comes in. They host websites close to where people are so the lack of bandwidth is less noticeable. They have competition, but ... Akamai has the best technology in this space." (As for who the competition is, along with a differing opinion on whose tech is best, read this post on the looming -- and rhyming -- threats from AT&T (NYSE:T) and Level 3 Communications (NASDAQ:LVLT).)
  • Like rokku, CAPS All-Star whatismyoption doesn't scare easy. Here's what he has to say about Akamai and its rivals: "The masses are sure that competition will eat the lunch of this established leader and are pricing [Akamai] as if growth will be negative going forward. Cheap on all metrics... Lowest Price to free cash flow ever. FCF has increased every year since 2000 ... Lowest Price to sales since 2002 ... Slowing growth more than priced in."
  • And let's close with an agnostic argument from joetheboss from back in June, who thinks Akamai's worth owning no matter who has the better tech: "Competition may be increasing but I'm not interested in speculating on factors that I have no measure of. ... yes prices are falling however demand is increasing and we will reach a point where prices are decreasing at a slower rate than demand is increasing at that point the company who has controlling market share will lead (assuming strong management)."

I'm with joetheboss and his "can't we all just get along?" philosophy. Maybe Akamai's got the best tech. Maybe it doesn't. One thing's for sure -- I'm not an engineer and I'll never know the answer for sure.

What I do know for sure is that after years of shying away from Akamai, I finally like the valuation I see today. After losing nearly two thirds of its market cap to a roaring bear market, Akamai shares currently trade for just 20 times trailing earnings and less than 12 times trailing free cash flow. Measured against long-term profits growth that analysts continue to peg north of 20% per year, Akamai's not just cheap folks -- it's dirt cheap.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Akamai -- 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.

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

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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. 881 out of more than 115,000 players. Google and Akamai Technologies are Motley Fool Rule Breakers recommendations. The Fool has a disclosure policy.