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

Every day, WSJ.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 130,000 stock gurus (and counting) in CAPS have to say about the list's latest contenders:

Company

One Year Ago Today

Recent Price

CAPS Rating (5 stars max.)

Cypress Semiconductor (NYSE:CY)

$19.91*

$6.09

****

Schering-Plough (NYSE:SGP)

$18.76

$24.21

****

America Service Group

$6.45

$12.34

***

Immunogen

$3.17

$6.02

***

Neutral Tandem

$18.25

$20.96

***

Five stars = highest possible CAPS rating; one star = lowest. Companies are selected from the "New Highs & Lows" lists published on WSJ.com on the Saturday following close of trading last week. Year-ago and current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.
*Before the distribution of SunPower (NASDAQ:SPWRA) shares at the end of last September.

Everybody loves a winner
Well, maybe not everybody. But Fools do seem fond -- or at least tolerant -- of the stocks hitting 52-week highs this week. Not one of the five receives less than a middle-of-the-road three-star rating on CAPS, while two actually garner above-average ratings: Schering-Plough and Cypress Semi.

I suspect it's pretty clear why I won't be writing about Schering today. (If not, read this.) In contrast, the more I look at Cypress Semi's numbers, the more I like 'em -- and I'm not the only one. In addition to its rising stock price on the NYSE, Cypress has become quite the market darling in CAPS-land. Let's find out why.

The bull case for Cypress Semiconductor
Most CAPS players who've written pitches in Cypress's favor seem to view the stock as a play on the solar power industry. jb3041, for example, comes right out and says it: "Cypress semiconductors is a play on tech in the semiconductor space."

Way back in December 2007, dpddelta agreed, calling Cypress: "a chance to buy [SunPower](SPWRA) at between 20% and 40% discount. Cypress Semiconductor (CY) owns about 53% of Sunpower which is not fully reflected in the price of CY stock."

Meanwhile, lonewulf47638 argues that "[SunPower] will rise as energy prices climb." But there's just one thing wrong with these investors'  collective thesis: Cypress doesn't own SunPower anymore. It spun the last of that operation off back in September of last year.

SunPowerless
This does not, however, mean that you should necessarily sell Cypress. As dpddelta also noted:

[T]he semiconductor portion of the company is about to get super hot. Their new Westbridge chip allows a cell phone to download or upload to a computer USB port about 50% faster than any other chip. The Westbridge is installed in [Research in Motion's (NASDAQ:RIMM) new] Blackberry and independent third parties have measured it's download speed at about twice the download speed of the I-Phone or any other cell phone. Cypress has a historic relationship with Apple (NASDAQ:AAPL). They have a chip in the nano. So I expect cell phone makers to beat a path to Cypress's door.

Technology aside, the valuation on Cypress also looks pretty good. An operating loss plus a massive $357 million writedown of goodwill last quarter currently have Cypress trading without a P/E. But from a free cash flow perspective, Cypress appears very, very cheap. The company generated $176.5 million in free cash flow last year, which at last Friday's price means the stock sells for less than 4.8 times that amount.

Nor was 2008 a fluke. Cypress has generated positive free cash flow in five of the last six years. (Its former SunPower subsidiary, in contrast, habitually burns cash -- a trait shared by peers Suntech (NYSE:STP), First Solar (NASDAQ:FSLR), and nearly every other major player in the solar biz.) Cypress's habit of generating cash also positions the company well to weather a downturn. Cypress currently has $205 million in cash on its books, or 24% of its market cap.

Time to chime in
I'm not ordinarily in the habit of praising stocks at their 52-week highs. More often than not, when I dig into the numbers behind such a stock's rise, I find the momentum unsustainable. This is not the case with Cypress. Here, I think we've finally found a rocket stock with enough fuel to keep flying higher. But that's just my opinion.

As always, we really want to hear what you think about the stock. Am I missing a fatal flaw in Cypress Semiconductor's business model? Did the company lose more than it gained by cashing out of SunPower? Whatever your views, we'd love to hear 'em. Click on over to Motley Fool CAPS now and tell us what you think.

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

Suntech Power is a Motley Fool Rule Breakers pick. Apple is a Stock Advisor recommendation.

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. 576 out of more than 130,000 members. The Fool has a disclosure policy.