"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
(out of 5)

Suntech Power (NYSE: STP) $18.78 $7.48 ****
Marshall & Ilsley (NYSE: MI) $10.66 $4.97 **
Regions Financial (NYSE: RF) $9.33 $5.50 **
Pacific Capital Bancorp (Nasdaq: PCBC) $5.49 $0.32 **

Companies are selected from the "New Highs & Lows" lists published on WSJ.com on Friday last week. 52-week high, recent price, and CAPS ratings from Motley Fool CAPS.

Last week wasn't a happy one for many investors -- banking shareholders in particular. Beginning at the bottom, independent equity researcher The Bedford Report labeled Pacific Capital Bancorp a "struggling" bank last week. The bank's not healthy enough to pay back its TARP loan in full. Consequently, Bedford warns investors not to expect its dividend (which at one point was yielding more than 12%) to return anytime soon.

Regions suffered a selloff when news broke Tuesday that three of the bank's "risk managers" -- including its chief risk officer -- had resigned. As for Marshall & Isley, that one seems to have been hit for the simple reason that Moody's threatened to cut its debt ratings (already treading water at Baa1) if the results of an evaluation of its real estate portfolios turn out unfavorably.

And Suntech Power? You can get the Fool skinny on that story right here, courtesy of my Foolish colleague Travis Hoium. In short, Suntech recently bought some factories to help it produce more solar power wafers. Unfortunately, it bought the capacity from a related party, and by its own admission, paid about twice what it would have cost Suntech to build the added capacity on its own. Historically, Suntech's never been a big cash producer in the first place. Seems investors looked askance at the company throwing around money it doesn't have.

At least, some investors think that way. Surprisingly, the 170,000 (and counting) investors who populate Motley Fool CAPS don't seem to find this news scary at all. To find out why, let's shine a light on …

The bull cash for Suntech Power
Never heard of Suntech? Allow CAPS member colas1976 to introduce you. Suntech is the "largest solar panel provider in the world." It's also "expanding overseas … reducing production costs," and growing its revenue rapidly. "Revenue grew 300M from a year ago."

jjb1963 views these as "good numbers overall" and says the company makes "real earnings" off its revenue to boot. Before we address this second point, what do our CAPS members have to say about Suntech overpaying for new manufacturing capacity? Shouldn't that concern us?

Bigger is better
Not according to CAPS member nuijel, who notes that while "emphasizing growth over margins [may] not please analysts … it is sensible in a commoditizing market, where economies of scale will matter increasingly. SunTech will be well positioned to be on the big fish side."

So Suntech may not be suffering from sunstroke after all. While many analysts up on Wall Street are beginning to worry about flattening demand and weakening profit margins in solar, Travis pointed out last week that this may not be the future for solar after all. To hear Suntech rival First Solar (Nasdaq: FSLR) tell it, the majority of its production has already been sold for 2011. Likewise, JA Solar (Nasdaq: JASO) says it already has received prepayments from customers desperate to lock up "1.2 GW of its 1.35 GW to 1.45 GW of capacity for next year."

Solarfun (Nasdaq: SOLF) agrees that demand for solar still looks "healthy," while Sunpower goes even further, declaring "demand is greater than the supply," with 70% of his company's North American production capacity already "booked for 2011."

Foolish takeaway
In a demand environment like this -- one in which Suntech in particular said that it sees customers willing to buy 30% more solar panels than it could conceivably manufacture next year, it might well have made sense to rush out quickly and buy up extra capacity. Had Suntech waited to build the factories on its own, the demand might have passed it by, leaving the extra revenue and market share captured by its competitors.

That still leaves the question of valuation, of course. Suntech was already on course to spend $400 million this year on capital expansion before it announced the Glory Silicon deal. The company only reports cash flow once per year, so we don't know whether it's generating cash, or burning it -- and we won't know for another three months. (Considering that the company has never generated $400 million in cash flow in a fiscal year before, though, I'd say the prospects look dubious.)

When all's said and done, I guess I still doubt whether this stock's a worthy investment. If you have an opinion on Suntech, here's your chance to tell the world about it. Click over to Motley Fool CAPS right now, and tell us what you think.

Moody's is a Motley Fool Inside Value pick. First Solar and Suntech Power Holdings are Motley Fool Rule Breakers recommendations. Moody's is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended writing covered calls on Moody's.

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. 623 out of more than 170,000 members. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.