"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 not always ...

Stock

52-Week Low

Recent Price

CAPS Rating
(out of 5)

Precision Castparts  (NYSE:PCP)

$47.08

$102.66

*****

ConAgra Foods

$13.52

$22.32

****

FactSet Research  (NYSE:FDS)

$31.15

$62.17

****

Sanofi-Aventis  (NYSE:SNY)

$23.95

$36.76

****

China Life Insurance  (NYSE:LFC)

$33.45

$70.02

****

Companies are selected from the "New Highs & Lows" lists published on WSJ.com on Friday last week. 52-week low and recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Everybody loves a winner
Each of these companies powered forward to a new 52-week high last week, and judging from the opinions of our 140,000 CAPS members, they're not done running yet. Every man jack of 'em scores an above-average four stars or better on CAPS. But the only one possessing that final fifth CAPS star is Precision Castparts.

So let's take this airplane parts maker apart and see what makes it tick.

The bull case for Precision Castparts
CAPS legend TSIF posted the following bullish prognosis on Precision back in May:

Precision Castparts ... show that you can be in an industry that is affected by a recession, and if you are well managed and have a nice moat, you can still come out ahead. By specializing in complex components and special orders [Precision Castparts] has managed to keep it's margins up ... Income year over year is down less than 10%. ... coming out of a recession, it will be hard to beat companies such as Precision Castparts who showed their metal even in the worse of economic times.

(Ha-ha. "Showed their metal." A brief round of applause for the pun, please, and let's proceed to our second pro-Precision thesis.)

This one comes from mtracy9, who predicted in March that once "the economy begins to recover and as the Boeing [ (NYSE:BA)] company begins to fill orders in 2010 for its Dreamliner commercial airplane, this company and its stock price should recover nicely." And yet, joefresquez doesn't believe that "Boeing and [government] spending [have been] factored into growth estimates, mostly because they aren't really known. [Precision] has had a nice run up so we might see a slight pull back in the short term."

Of course, Precision's growth also relies on spending from other industrial heavyweights such as United Technologies (NYSE:UTX) and General Electric (NYSE:GE). As a result, Precision is pegged for nearly 12% growth, even though its customers are expected to increase earnings 7-8% per year over the next five years.

I think this CAPS member got the part about the "short-term pullback" right. Why? Because here at the top of its 52-week run, Precision's price is looking just a wee bit optimistic (and yes, "ready to fall.") And why is that?

Consider first that Precision currently trades for 14 times trailing earnings. Right off the bat, this seems high relative to the firm's projected sub-12% growth. Consider also that Precision's earnings quality is fairly low, in that free cash flow currently backs up barely 75% of its reported "net earnings." With free cash flow amounting to $761 million over the last 12 months, Precision shares currently cost nearly 19 times the amount of cash they generate in a year. Pricey.

Time to chime in
Mind you, even here at its 52-week high, I'm not expecting Precision Castparts to fall to its death. Fact is, as companies go, this is a quality operation. It does generate a solid amount of free cash flow, and carries more than twice as much cash ($630 million) as it does debt on its balance sheet. So unlike some other companies I could name, Precision isn't going away anytime soon. All I'm saying is that it's not going anywhere fast, either.

But hey, that's just my opinion. Feel free to disagree. You can post your comments and explain to me in exquisite detail just how wrong I am right here on Motley Fool CAPS. Click through, and flame away.

Precision Castparts is a Motley Fool Stock Advisor pick. FactSet Research Systems is a Rule Breakers pick. The Fool owns shares of FactSet.

Fool contributor Rich Smith owns shares of Boeing. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 704 out of more than 140,000 members. The Fool has a disclosure policy.