"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.

It's been a while, but thanks to last week's sell-off, we once again have a chance to stand beneath Mr. Market's silverware drawer in hopes of snagging a bargain. Let's meet today's contenders:


52-Week High

Recent Price

CAPS Rating (out of 5)

Alcatel-Lucent (NYSE: ALU) $6.63 $1.99 ***
Niska Gas Storage Partners (NYSE: NKA) $22.21 $9.57 ***
United States Natural Gas (NYSE: UNG) $12.96 $8.21 **
Incyte Corporation $21.15 $12.54 **
Diamond Foods (Nasdaq: DMND) $96.13 $35.80 **

Companies selected from the list of stocks hitting new intraday 52-week lows as reported on finviz.com. Recent price and 52-week high provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

The week in weak stocks
Wall Street sent investors on a roller coaster again last week, rising slowly at first, then entering a deep dive, then rising again. When all was said and done, the Dow Jones Industrial Average (INDEX: ^DJI) actually ended up for the week -- but not for everyone.

Above you find five of the market's laggards. Five companies just scraping by as they inch along 52-week lows. Five stocks pretty much loathed by investors. Starting from the top, we have Alcatel-Lucent. I'd tell you what I think of 'em, but like my mama used to tell me, "If you can't say something nice about an over-promising, under-delivering, cash-burning French telecom equipment maker -- don't say anything at all." So ... 'nuff said.

Moving on down the list, we see two stocks both tied to the market for natural gas: Niska Gas and U.S. Natural Gas. One's an honest-to-goodness business; the other is a financial construct that attempts to track the ups and downs of nat-gas prices. One underperformed expectations in an earnings report earlier this month; the other's been disappointing investors for years.

Incyte? Here's some insight for you: If you've been in the business of making drugs for 20 years, but still haven't managed to invent something that can earn a profit ... maybe it's time to try a different line of work. Shoe salesman, perhaps?

Taking a crack at Diamond Foods
As I said, not one of the stocks that popped up on our 52-week-low screener this week actually receives high marks from investors. The best the CAPS community is willing to say about these stocks is that a couple of them (three-starred Alcatel and Niska) might possibly match the market's returns. But are investors being too hard on these stocks?

Consider the case of two-star-ranked Diamond Foods. Yes, the company got into trouble a couple of weeks ago when it announced an internal investigation into "accounting for certain crop payments to walnut growers." Yes, the news has delayed Diamond's purchase of the Pringles unit from Procter & Gamble (NYSE: PG), a move that would instantly transform Diamond into a snacks purveyor on a scale similar to that of Frito-Lay purveyor PepsiCo (NYSE: PEP). But my fellow Fool Matt Koppenheffer recently went on record saying that the 40% drop in Diamond's market cap seems overdone, and he's "skeptical that investors aren't overreacting to the news." And he's not the only one.

CAPS member rugby14 points out that Diamond's nutty "Products [are] gathering strong support from nutritionists."

stpatrick31782 predicts that Diamond's "short term slump presents long term opportunity."

Perhaps, says fellow CAPS member mercyn, in the form of "an M&A sooner rather than later. It has bought other companies-it will soon become the acquired. An announcement, another pop and I'm out."

Once it pops, will Diamond stop?
To be honest, that's pretty much how I'm looking at Diamond myself. Listen, Fools -- I've long been skeptical of Diamond Foods -- since before it was even a public company in fact. While on the surface, Diamond looks attractive today at 16 times earnings, a 17% long-term growth rate, and a modest 0.5% dividend, the company still seems weak in the free cash flow department, where the company's $50 million in claimed GAAP "net income" overstates true cash profits by at least 31%.

If you ask me, this company is in dire need of new management, one that can better capitalize on the trend toward "healthy snacking" and make better profits off Diamond's portfolio of premium-branded nuts. An acquisition -- not of Pringles by Diamond, but the other way around -- might be just the thing to turn this business around -- and make the stock pop.

What's that, Fool? You say you've heard of Frito-Lay, but never heard of Diamond Foods? That's not necessarily a bad thing, you know. Some of the best stocks in the world are tiny companies you've never heard of. Read about two more of our favorites in the Fool's new -- and free! -- report: "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.