"'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."

So runs the thesis of my recurring Fool column "Get Ready for the Bounce," in which we search among the wreckage of Mr. Market's overturned cutlery drawer, hoping 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, stocks 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 equities that've suffered dramatic drops over the past week. With a little help from the 145,000 members of Motley Fool CAPS, we hope to find an opportunity or two for you:


How Far From 52-Week High?

Recent Price

CAPS Rating
(Out of 5)

Denison Mines  (NYSE:DNN)




PotashCorp (NYSE:POT)




Best Buy




Citigroup (NYSE:C)








Companies are selected by screening on finviz.com for abrupt 10% or greater price drops over the past week. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.

Five super falls -- one superball
Last week was a tough one for these five stocks. Now, it wasn't all their fault -- PotashCorp, for example got blindsided by a trio of bad news-announcements last week: tumbling potash prices in China, an analyst downgrade inspired thereby, and news that Vale (NASDAQ:VALE) is opening a new potash mine (which could pressure prices even further). But most of these stocks have only themselves to blame for their misfortune.

Palm got slapped when it reported a bigger-than-expected (clarification -- better than some people expected) loss on Thursday. Citi slid drastically after the banker botched its secondary offering last week. Best Buy revealed that its rising sales owe largely to management's willingness to accept smaller profit margins. And Denison? The top-ranked stock on today's list certainly looks attractive on the surface, selling for less than half what it once fetched, a mere buck-and-change. But is there more to this story?

The bull case for Denison Mines
Denison's got its hands in just about anything you can dig out of the dirt -- gold and lead, oil and gas, and uranium. It's that last element that has many CAPS members praising Denison's glowing prospects. dave08666, for one, writes that "nuclear is such a great way to get energy it's the cleanest the only reason why it hasn't been used as much as we'd like is because it can also be used to make weapons."

Desertdavid cites "a recent Time Magazine article (Sept 2009) [telling how] many countries are starting to build nuclear power plants. Seems like uranium might go boom." (Um, "boom?")

Yep, boom. Or as HamsterOnSpeed puts it: "Pent up demand for uranium about to explode in China and else where."

Words to worry by
Gee, thanks, guys. "Uranium." "Boom." "Explode" -- all in the space of a few sentences. Now I'm nervous. And as for why everybody else is feeling nervous about Denison, it stems from a press release last week explaining how the company's McClean Lake uranium mill joint venture is set to close down in mid-2010. Why isn't exactly clear, but investors seem to fear that whatever the reason, less uranium getting dug up translates into fewer prospects for Denison to outperform -- and so they're selling off the stock.

Is that the right call?

I actually think it is -- but I don't think you needed to wait for last week's announcement to know that this stock was going nowhere. Already unprofitable and burning cash, things took a turn for the worse at Denison this year, with sales plummeting 65% in the most recent quarter. In a universe populated by profitable miners like Cameco (NYSE:CCJ), BHP Billiton (NYSE:BHP), and, well, Potash (see above), I just don't see the sense in sinking money into a dry hole like Denison.

Time to chime in
But hey, that's just my opinion -- and I'm pretty well-known around here for preferring profitable, cash-rich, and cash-generating companies over ... well, the other sort. Meanwhile, other Fools may believe that Denison is a moonshot worth taking -- and could pay off big time if they're right. If that's what you think, then here's your chance to tell us why.

Motley Fool CAPS: It's fun, it's free, and it just might make you famous.

Best Buy is a Motley Fool Stock Advisor selection, a Motley Fool Inside Value pick, and the Fool owns shares of it and Cameco.

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. 916 out of more than 145,000 members. The Fool has a disclosure policy.