"Don't try to 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 Low" list at Nasdaq.com:

52-Week High

Currently
Fetching

CAPS Rating
(5 max)

Actuate  (Nasdaq: ACTU)

$8.99

$4.26

*****

Millipore (NYSE: MIL)

$83.20

$64.62

***

Affymax

$41.00

$19.49

**

Corel  (Nasdaq: CREL)

$14.37

$7.32

*

Bookham  (Nasdaq: BKHM)

$3.39

$1.73

*

Companies are selected from the "NASDAQ 52 Week Low" list published on Nasdaq.com on the Saturday following close of trading last week. 52-week high and current pricing provided by Yahoo! Finance, as of the same date. CAPS ratings from Motley Fool CAPS.

Knives and knaves
Once again, our list proves the converse of the "everybody loves a winner" maxim. When a stock falls on hard times, its popularity evaporates right quick. Investors accordingly give low marks to most of the companies on today's list, with one exception: business intelligence software provider Actuate.

Five-starred on CAPS, Actuate was ill-starred last week. Its stock took a 25% hit despite beating earnings estimates by the proverbial penny in Q4 2007. This one-day drop pushed the stock's 52-week performance into negative territory versus the S&P 500. So why do investors still love Actuate? Let's find out.

The bull case for Actuate
There's a startling amount of conversation on CAPS concerning Actuate's potential as a buyout target. (Gee, I wonder why?) For instance, djmallon argued in early November that IBM (NYSE: IBM), Oracle (Nasdaq: ORCL), and Microsoft (Nasdaq: MSFT) "need this BIRT reporting software company for their programs. Actuate is the finest reporting software on the market today."

CAPS All-Star Gtrinvestor mused a few days ago that although:

... the US economy is going through a recession, which doesn't bode well for consulting type companies ... they were able to reverse their reserve on their Deferred Tax Asset. Why is that important you ask? Well, you have to be able to convince your auditors that you are going to be able to make enough money to utilize those Deferred Tax Assets in the future (in other words, your going to keep making money). With a historical P/E of 15 [and] some tangible equity ... I think they could survive a slow-down in business to a degree.

One of the great things about CAPS? With 83,000 investors and growing, we're bound to have a few contributors who can offer firsthand experience with the companies they write about. So let's wrap up with dauril, who saw last week's sell-off as an opportunity to rate it outperform, confiding, "I have used the product in my work and found it very functional and efficient, so how can bottom fishing here go too far wrong??"

How, indeed? While I'm reluctant to put many eggs in the buyout basket, I have to agree with our pitchers on this one. The numbers at Actuate suggest significant undervaluation. In fact, the situation may be even better than they depict.

You see, when Gtrinvestor cited Actuate's 15 P/E ratio, he was referring to the key statistics that Yahoo! Finance listed for the stock at the time. If you update that ratio with the numbers reported last week, you'll find that this company sells for only 13 times trailing earnings, and 13 times trailing free cash flow as well. Relative to a long-term growth rate that most analysts put at 20% per year, that looks downright cheap.

Time to chime in
Of course, this column's aim isn't just to tell you what I think about Actuate -- or even what other CAPS players are saying. We really want to hear your thoughts. Do you, like dauril, have a story to tell about Actuate's software? Have you had time to dig deeper into Actuate's financial reports and discover a good reason for the apparent undervaluation? 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. Microsoft is an Inside Value pick. You can find Rich on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 399 out of more than 83,000 players. The Fool has a puncture-proof disclosure policy.