"'Don't catch a falling knife' ... 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."

So runs the thesis of my recurring Fool column "Get Ready for the Bounce," in which we search among the wreckage of Mr. Market's overturned cutlery drawer, hoping to find future winners in a pile of 52-week losers. But do we really need to sit around for a whole year, waiting for a potential bouncer?

I say nay. Sometimes, stocks fall far in far less time than a year -- and like a superball dropped from the balcony, the harder they fall, the higher they bounce. Today, we're going to look at a few equities that've suffered dramatic drops over the past week. With a little help from the 130,000 members of Motley Fool CAPS, we hope to find an opportunity or two for you:


How far from
52-week high?


CAPS Rating
(out of 5 stars)

Transportadora de Gas Del Sur  (NYSE:TGS)




Ryland Group  (NYSE:RYL)




MGIC Investment (NYSE:MTG)




AirTran Holdings




Delta Air Lines  (NYSE:DAL)




Companies are selected by screening on finviz.com for abrupt 10% or greater price drops over the past week. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.

Five super falls -- one superball
Last week was a rough one for both airlines and housing stocks. As fellow Fool Alyce Lomax pointed out, there's reason to worry about the latter today -- and the former, always. Seems Fools have a real fear of flying... and of staying home, too.

We're a whole lot more optimistic about the prospects for one of last week's victims, though: the mellifluously monikered "Transportadora de Gas Del Sur." The name practically trips off the tongue, but does TGS offer more than fantastic phonetics? We're about to find out as we dig into ...

The bull case for TGS
For those not familiar with the company, let's begin with a brief description of TGS. CAPS All-Star vittorio301 introduced us to the company back in 2006: "They don't just ship. They also process natural gas and is engaged in midstream activities and the provision of telecommunication services in Argentina. There numbers look good and they have lots of room to grow." (For better or worse, they still do. Revenues at TGS have grown at just 3% annually over the last three years.)

But maybe growth isn't everything? As fellow All-Star investor srk85 pointed out in February, TGS sells for a: "Very low price multiple." What's more: "Utilities are defensive anyway."

Last but not least, CAPS (what else?) All-Star greenwave3 exulted last year: 

Value? Growth? How about both? This stock ... is a strong company with a great balance sheet, strong free cash flow, and positive EPS growth. Natural gas distribution is as close to a consumer staple as you're going to find and these guys are the ones to deliver it. They run the largest natural gas pipeline in South America, serving primarily Argentina. The valuation of TGS at these levels is just absurd. For every dollar you invest, you are getting $1.60 worth of equity in this company [Note: Figure representative of when pitch made], along with a negative PEG. Forget about cheap growth. This is growth that is paying you just to hop along for a ride.

The same tumbling natural gas prices that ko'ed the stocks of gas extractors like Chesapeake Energy (NYSE:CHK) and Anadarko (NYSE:APC), and erased huge chunks of value from Untied States Natural Gas (NYSE:UNG), have done a number on TGS this year. But the more I look at this stock, the more I like it today.

Unlike gas extraction, you see, gas transportation is one of those rare tollbooth businesses that so attract super-investors like Warren Buffett. Once a company's built the pipes, it can pretty much sit back and just cash checks as other people move gas through 'em.

How much cash, you ask? Last year, TGS generated well over $100 million in free cash flow from its business. And while slumping demand has the trailing-12-month total closer to $84 million, that still adds up to a most attractive valuation on the stock -- about 6 times enterprise value. And when a stock with these kinds of numbers sells for just 40% of its book value and carries incredibly moderate debt relative to its cash flow, I cannot help but agree with my fellow CAPS All-Stars today: TGS stands for Today's Greatest Stock.

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

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. 768 out of more than 135,000 members. Chesapeake Energy is a Motley Fool Inside Value recommendation. The Fool has a disclosure policy.