"'Don't catch a falling knife' ... 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 the thesis of my recurring Fool column "Get Ready for the Bounce," in which we search the wreckage of Mr. Market's overturned cutlery drawer to find future winners in a pile of 52-week losers. But do we really need to sit around for a whole year, waiting for a potential bouncer?

I say nay. Sometimes, companies fall far in far less time than a year -- and like a superball dropped from the balcony, the harder they fall, the higher they bounce. Today, we're going to look at a few companies that've suffered dramatic drops in 2009. With a little help from the 130,000 members of Motley Fool CAPS, we hope to find an opportunity or two for you:

Company

How far from
52-week high?

Recent
Price

CAPS Rating
(out of 5 stars)

Mueller Water Products (NYSE:MWA)

-72%

$3.50

*****

SunPower Corporation  (NASDAQ:SPWRA)

-77%

$25.05

***

LDK Solar  (NYSE:LDK)

-85%

$8.02

***

Delta Air Lines  (NYSE:DAL)

-50%

$6.33

*

Continental Airlines (NYSE:CAL)

-52%

$10.42

*

Companies are selected by screening for 30% or greater price depreciation year-to-date on finviz.com. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.

Five super falls, one superball
As the table above demonstrates, 2009 has not been kind to airline stocks or solar companies. Fools seem to prefer the latter over the former (and perhaps rightly so.) But the one stock idea they find really refreshing is... water.

Mueller Water Products, to be precise. Let's find out why.

The bull case for Mueller Water Products
Some of CAPS' very best investors seem to have taken a real shine to Mueller Water. (For that matter, we like it quite a bit, too. Mueller is an official recommendation of Motley Fool Hidden Gems.) CAPS All-Star Trimalerus argued back in March that, at the very least, "The market for water treatment expands as our population expands and many cities are in need of infrastructural improvements, which this company provides."

CAPS member PSU69 -- just a few points short of All-Star status himself -- points out that despite the need for improvements: 

Mueller Water was pounded down as their order books collapsed during the credit crunch ... Credit is starting to flow and feds are pumping the cash into the water problems. MWA will benefit...

Echoing others' optimism regarding "the need to upgrade outdated or insufficient water and sewer systems," All-Star investor tacksan123 added last month that: "you have to love a company [whose] management puts its money where its mouth is ... This shows a significant level of commitment and dedication to making this company successful."

Knowing that management drinks its own cooking at Mueller is certainly a good start. But should you want to sit down at table with them and pour yourself a glass? More simply: Is the price right?

At first glance, the firm's more than $356 million net loss last calendar year, and its sizeable first-quarter loss this year, might lead you to conclude: No way! But drill a little deeper, and you'll notice that even as Mueller was reporting $930 million in trailing 12 month losses, the firm actually produced over $50 million in free cash flow. Simply put, this story is not nearly as bad as it looks -- or as bad as Wall Street makes out.

If you take the analysts at their word, Mueller will grow its profits at less than 2% per year over the next five years. But consider that this number:

  • ... is barely enough to cover the rate of population growth in the U.S.
  • ... makes almost no provision for Mueller growing its profits faster than the overall population.
  • ... is far below the estimates posited for either the water infrastructure industry at large, or key rivals like General Electric (NYSE:GE) or Tyco (NYSE:TYC) who will also benefit from across-the-board infrastructure improvements.

Time to chime in
Suffice it to say that I'm leery of trusting the analysts' judgment on this one. Seems to me that between Mueller's committed management, a growing population needing new infrastructure, an existing infrastructure in dire need of upgrade and repair, and -- yes -- the Obama stimulus package, Mueller has plenty of opportunities to bounce right back.

But that doesn't mean you need to agree. Heck, maybe you think Mueller's all wet -- and that's OK. Just do us one favor? Click on over to CAPS now, and tell us why.

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. 427 out of more than 130,000 members. Mueller Water Products is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.