"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 what should you do when some of CAPS' smartest investors pan one of these hot stocks?

For starters, consider using the "52-week high" list as a starting point for further research. Stocks can rise for many reasons, but a little help from Motley Fool CAPS can make it easier to figure out how worthy those reasons are. Let's see what the more than 130,000 stock gurus (and counting) in CAPS have to say about the list's latest contenders:

Stock

One Year Ago Today

Recent Price

CAPS Rating
(out of 5 stars)

Spectrum Pharmaceuticals (NASDAQ:SPPI)

$1.74

$3.66     

*****

Anaren (NASDAQ:ANEN)

$12.80

$15.25

****

Iamgold (NYSE:IAG)

$6.12

$9.92

***

Amerigroup (NYSE:AGP)

$25.53

$31.70

***

MarketAxess Holdings  (NASDAQ:MKTX)

$7.92

$10.77

*

Five stars = highest possible CAPS rating; one star = lowest. Companies are selected from the "New Highs & Lows" lists published on WSJ.com on Friday last week. One year ago and current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Everyone loves a winner
When stocks soar on the wings of success, bears become rare. And true to form, the five stocks hitting 52-week highs Friday, include two that have CAPS investors cheering, two more receiving more muted applause, and... hey! what's this we see down at the bottom of the list?

For some reason, despite all its success, MarketAxess Holdings doesn't seem to be feeling the love this week. Want to know why?

So do I
Just 29 separate Fools have chimed in on this bond trader so far: 19 for and 10 against. Yet so far, the only CAPS members who've actually written pitches about the stock hail from the bullish camp of 2006 -- crazyipo, who likes the stock as a play on "exchange consolidation;" and jfjf88, who comes right out and predicts that under "CEO John Thain ... NYSE (NYSE:NYX) ... could acquire MarketAxess" as it evolves into "a true securities exchange, not just a stock exchange."

However, both of these pitches are nearly three years old. (One clue: jfjf88 refers to John Thain as CEO of the NYSE. Most of us today know Mr. Thain as the Merrill Lynch exec who recently got the boot from Bank of America (NYSE:BAC) after Banker Bonus-gate.) Have things changed so much over the intervening years that MarketAxess is now a candidate for shorting?

One word: No
Listen, I understand the bear case against MarketAxess. With a P/E over 40, but long-term growth projected at 15% by analysts, the stock looks dreadfully expensive -- on the surface.

Dig a little deeper, though, and I think you'll find plenty of reason for MarketAxess's stock market strength. It's got $110 million in cash in the bank, against no long-term debt. ($30 million worth of convertible preferred stock, true, but no "debt" per se.) And the firm generated nearly $26 million in free cash flow last year, a number that has held fairly steady for five years straight.

In short, this stock sells for just more than 14.5 times its annual free cash flow, while the underlying business is even cheaper (because once you back out cash, the enterprise value is much lower than the stock's market cap). Put it all together, and I simply do not believe that this stock is as expensive as it looks -- and its single-star CAPS rating notwithstanding, I see no reason why it must fall.

Time to chime in
That said, a lot of Fools would -- in fact do -- disagree with me. If you're one of them, then don't be shy. Speak up! Click on over to Motley Fool CAPS, and tell us what you think.

NYSE Euronext is a Rule Breakers selection. Amerigroup is a Stock Advisor pick.

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. 526 out of more than 130,000 members. The Fool has a disclosure policy.