"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 further, 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 five-year lows:

Companies

Recent Price

CAPS Rating (out of 5)

Western Refining  (NYSE:WNR)

$4.17

*****

American Vanguard (NYSE:AVD)

$6.82

***

Bank Mutual Corp

$6.09

*

DemandTec (NASDAQ:DMAN)

$5.93

**

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

Left for dead? Or drop-dead gorgeous?
Each of the stocks listed above has shed between 25% and 65% 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, and if truth be told, CAPS members aren't too hot on their prospects either -- except in one instance.

If there's one stock here with the potential to bounce back with the broader economy, it's gotta be Western Refining -- or so Fools believe. Fact is, we've been waiting for this particular diamond to pull itself out of the rough for quite some time now, yet our patience has gone unrewarded. Sure, Western Refining's reappeared on our radar after a two-month hiatus, but why should we expect anything different this time around?

Here's why:

The bull case for Western Refining
Long-time Fool kahunacfa recently dropped by to point out that: "Refinery margins are on the rebound having been hammered during the Depression of 2007-2009. Crude prices are expected to be range bound from about $50 tp $72 bbl for the next several years. Reduced price volitility is a favorable operating operating [environment] for efficient refiners like Western Refining."

Moreover, as WiseChoice4u2 reminds us: "These refineries are almost impossible to get approval for today with all the regulations. Someone will need them and upgrade them."

Perhaps most telling of all, though, is the note that Maxen just submitted: "CEO Jeff A Stevens bought 80,000 shares end Nov. Price range 4.60-4.67 for a total of 370.2 K Today you could buy WNR for 4.31 a share."

Follow the leader?
So, the CEO's loading up on his own stock ahead of earnings in March. That sure sounds bullish.

But hold up a sec -- did you say "November?" That was more than two months ago, closer to last quarter's earnings than to this one's. Also, the insider trade in question was 50,000 shares -- not 80,000 -- and Stevens already owned more than 5.2 million shares of Western. A 50,000 bump to that number works out to less than a 1% addition to his total stake. So on balance, I'm not sure this insider news is quite as bullish as Maxen may have interpreted it. 

Are there other reasons to be bullish about Western Refining's chances? Sure there are. For example, the stock currently sells for less than half its book value. And after a rough start-of-the-recession, Western has produced positive operating profits in five out of the last six quarters, so maybe things are looking up.

Once burned, twice shy
But I wouldn't bet on it. You see, while kahunacfa's right about Western's margins turning up, you can't throw a brick in Texas these days without hitting another oil refiner for which the same is true. Tesoro (NYSE:TSO), Valero (NYSE:VLO), Sunoco (NYSE:SUN) -- each of 'em has produced positive operating margins for the past 18 months. (Why, Frontier (NYSE:FTO) is even making it into the double digits as often as not!)

These Western rivals also all sport better-looking balance sheets than their rival, and pay dividends to their shareholders -- a practice which Western now eschews.

Time to chime in
With 61% of Western's shares now sold short, a lot of smart folks seem to be betting on this company's demise. Personally, I'm not sufficiently confident to make that bet (and risk getting turned to pulp in a short-squeeze). But neither am I certain that this company will return to walk among the living.

But what about you? Do you see a way for Western to escape its crushing debt load and sidestep an ignominious bankruptcy? If you've got an opinion, we've got a place for you to state your case: Motley Fool CAPS.

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