"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 WSJ.com:

Company

52-Week High

Recent Price

CAPS Rating

(5 max):

Novartis  (NYSE:NVS)

$61.30

$41.26

*****

FedEx (NYSE:FDX)

$99.46

$50.94

***

United Parcel Service (NYSE:UPS)

$75.08

$42.49

***

International Paper  (NYSE:IP)

$33.77

$9.12

***

Capital One Financial  (NYSE:COF)

$63.50

$15.84

*

Companies are selected from the "New Highs & 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.

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 ol' baby 'n' bathwater treatment, tossed out on their rosy little bums as if they were bums of another sort. You just know that some of these babies will bounce right back once the suds subside.

And what a batch of bargains we've got this week! FedEx and UPS? International Paper? Capital One? Thanks to our once-in-a-century sell-off, some of the biggest brands on the planet are going for fire-sale prices. While investors seem hesitant to take Mr. Market up on some of these bargains -- and downright terrified to see what's in Capital One's wallet -- there's one stock on today's list that they think offers a cure for what ails your portfolio. Are they right?

The bull case for Novartis
CAPS All-Star investor mulledover summed up the bull thesis on this one quite elegantly back in October, calling Novartis:

A solid boring company with intelligent management. Owns a big chunk of Roche who will shortly own all of Genentech (NYSE:DNA). Big player in generics, likely will be a big one in biosimilars. Alcon will be rolled in. Next?

Taking up mulledover's challenge, bigbonesmagoo adds that Novartis has a:

Good pipeline. Vasella is the best manager around. Won't fall for stupid mergers like Wyeth (Pfizer (NYSE:PFE))--will target small biotech-look for targeted pickup.

Last but not least, in early December, livitup1 gave us a numerical rundown on the company: "OK, so this company has a P/E well below the sector, and is actually increasing sales and net profit every quarter this year, despite the economy. And you're not already in [Novartis], why?"

I'm presuming that "why?" was rhetorical, but I'm going to answer it anyway. The reason I'm not "already in Novartis" boils down to valuation.

Sure, at first glance, the stock doesn't look particularly expensive at 12.5 times earnings. But it's not cheap, either. Analysts only expect 8% long-term growth from of the stock, and to me, that's just not good enough to justify such a high multiple.

Furthermore, Novartis occupies a nearly unique position in the pharma sphere: It generates less free cash flow than it reports as net income. Pfizer, Merck, Eli Lilly -- pretty much anywhere else you look in the industry, you'll find a company generating beaucoup bucks in free cash flow, yet reporting lower net income under GAAP. In this regard, at least, Novartis' uniqueness is not a selling point for me. I'm even less impressed with Novartis when I see that all three of these peers use their copious cash flows to fund dividend yields far superior to the pittance Novartis pays out.

Time to chime in
A relatively expensive price and relatively miserly dividend keep me from investing in Novartis, but hey, feel free to disagree. If you see something in this stock than makes it a better drug play than the other firms mentioned, point it out to us!

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

United Parcel Service and International Paper are Motley Fool Income Investor recommendations. FedEx is a Stock Advisor pick. Pfizer is an Inside Value selection, a Motley Fool Income Investor pick, and a holding of The Motley Fool.

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. 1011 out of more than 125,000 members. The Fool has a healthy disclosure policy.