"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 goes the thesis of my weekly Fool.com column "Get Ready for the Bounce." Therein, I run the 52-week-lows list compiled by Nasdaq.com through the "wisdom of crowds" meter that we call Motley Fool CAPS. And out the other end comes a list of stocks that have fallen so far, Foolish investors figure they're just bound to bounce back soon.

But is there a way to cash in on fallen angels who've plummeted even further? Perhaps. If a stock that's fallen for one year straight has headroom, then maybe a stock that's fallen even farther, and longer, has room to soar back even higher -- in which case, an apparently left-for-dead stock could offer us a drop-dead gorgeous entry price.

We're going to test that thesis today, starting with five stocks that just hit their 5-year lows:

Company

Recent Price

CAPS Rating
(5 stars max.)

Precision Drilling Trust  (NYSE:PDS)

$5.57

*****

Patni Computer Systems  (NYSE:PTI)

$4.84

*****

Key Energy Services  (NYSE:KEG)

$3.72

*****

Seagate Technology  (NYSE:STX)

$3.11

****

Pioneer Drilling (AMEX:PDC)

$5.11

****

Companies are selected from the "New 5-Year Lows" list published on MSN Money on Thursday. CAPS ratings from Motley Fool CAPS.

Left for dead? Or drop-dead gorgeous?
Each of the stocks listed above has shed between 50% and 85% of its value over the past year alone, and currently sits at or near its five-year low. Wall Street has left 'em for dead, but Main Street investors reply: "Hey! Not so fast!"

Far from being scared off by the sell-off, CAPS members like these stocks even better, now that they're trading at multi-year discounts. As luck would have it, one of these stocks also caught the eye of our own international investment seeking team at Motley Fool Global Gains.

Let's find out why the company is attracting investors on CAPS, as we review ...

The bull case for Precision Drilling Trust 
Back in November, CAPS All-Star MysterInsidious rated Precision Drilling an outperformer because:

Oil, gas, ... have been sold off hard due to recession fears, hedge fund redemptions, margin calls, and unwinding of the yen carry trade. Despite the US government printing money to help save the US economy, the dollar's value has increased significantly against most world currencies with the exception of the yen. I believe the unwinding of the carry trade has helped to push prices of commodities and anything related to commodities too far. Once these negative pressures are exhausted, I believe the US dollar will go back to declining in value ... When this happens, I expect all commodities to significantly increase in value.

Which tells us a bit about macroeconomic trends, but not much about why we should play them by buying Precision in particular. Fortunately, CAPS All-Star forexnutca also addressed the question in November, saying: "Grey Wolf acquisition will only strengthen their market share. Huge div. Strong fundamentals. With nat. gas and oil in its slow season, mixed with the market sell-off, this creates a major buying opportunity." Actually, "has strengthened" -- the deal's done now.

Finally, fellow All-Star tuffsledding suggests that we not overlook the fact that the stock is: "Dirt cheap. Sky is NOT falling, this is a steal..."

Indeed, it's hard to argue otherwise. Sure, it's true that Precision Drilling isn't expected to grow much faster than 5% per year long term -- but that's better than the predictions for rivals like Schlumberger (NYSE:SLB) and Patterson-UTI Energy (NASDAQ:PTEN). Moreover, while analysts don't expect a lot of growth here, the numbers I'm looking at suggest that you don't need a lot of growth to profit handsomely. Precision's P/E is ultra-cheap at less than 3.0. Conversely, the dividend scrapes the clouds at a large 8.3% yield.

Time to chime in
Of course, to quote Dennis Miller: "That's just my opinion. I could be wrong." Maybe there's greater divvy danger than I'm anticipating? If you see a reason to fear it will be cut, click on over to CAPS and clue us in.

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. 1224 out of more than 125,000 members. Precision Drilling is a Motley Fool Global Gains pick. The Fool's disclosure policy is for your reading pleasure.