"Don't catch a falling knife," as the old saw commands. (Pardon my mixing a cutlery metaphor.) 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 where Motley Fool CAPS comes in.

Today, we once again stand beneath Mr. Market's silverware drawer, measuring which knives have fallen the farthest. Then we'll call on CAPS to ask which of these stocks -- if any -- Foolish investors believe are ready for a rebound. Let's meet today's list of contenders, drawn from the latest "52-Week Lows" list at WSJ.com:

Company 

52-Week High

Recent Price

CAPS Rating (out of 5)

FormFactor (Nasdaq: FORM)

$26.08

$15.02

*****

Gilead Sciences (Nasdaq: GILD)

$50.00

$39.76

****

SurModics 

$31.00

$18.48

**

SeaDrill Limited

$28.40

$26.01

***

McAfee (NYSE: MFE)

$45.68

$35.05

**

Companies are selected from the "New Highs & Lows" lists published on WSJ.com on Friday last week. 52-week high, recent price, and CAPS ratings from Motley Fool CAPS.

Damage report
Gilead Sciences has continued to trade downwards ever since disappointing the Street with its full-year revenue guidance -- which in turn prompted a downgrade from Piper Jaffray, and cost Gilead 10% of its market cap. Lower-than-expected earnings and guidance were the problem at McAfee, while downgrades have also dogged SurModics and SeaDrill.

And as for FormFactor, would you believe they missed their estimates, and lost money, and got a downgrade? (From Goldman Sachs -- which is advising investors to sell the stock.)

Yes, Fools, FormFactor boasted a 45% year-over-year spike in sales in Q1, and still managed to lose money for the quarter. And still, CAPS members believe it's a "buy." But if a 45% increase in sales aren't enough to put this company in the black, then what, a Fool may wonder, will it take?

The bull case for FormFactor
For all the company's troubles, CAPS member Forbajato insists that FormFactor's wafer probe cards remain an: "Important tech product, well positioned for recovery as tech spending improves."

ellinroc loves the company's "strong balance sheet," jam-packed with more than $430 million in cash, and no long-term debt.

While CAPS All-Star SmallPimpin limits himself to a two-word endorsement of the stock: "Mmm... semiconductors..."

Overly simplistic, you say? It's not enough to think a stock will outperform just because it helps build the brains of so many 21st century tech products? Be that as it may, SmallPimpin's enthusiasm is understandable given recent news reports. According to the Semiconductor Industry Association, global semi sales rose in March to their second-best-ever monthly sales record, up 4.6% from February.

Why, in this market, even the beleaguered Advanced Micro Devices (NYSE: AMD) is now reporting profitable numbers, while Intel (Nasdaq: INTC) just got done reporting a quarter that was by all accounts simply stellar. If one of FormFactor's biggest customers is doing well, the thinking goes, it stands to reason that better days for FormFactor, too, cannot be too far off.

And yet ... I cannot help but notice that the Wall Street consensus still predicts the opposite. Most analysts following FormFactor expect to see the company post declining earnings over the next five years. Profits remain elusive. (Indeed, the company hasn't generated positive free cash flow on an annual basis for two years now -- and even when it was, its free cash flow numbers didn't often add up to anything near what it reported as earnings.)

Foolish takeaway
Call me a pessimist, but I remain strictly skeptical about FormFactor. Yes, I agree the firm's balance sheet is impressive. True, its rebound in sales has been nothing short of astounding. But unless and until FormFactor proves itself capable of generating consistent free cash flow from its business, I see every risk that the balance sheet will deteriorate, and little hope that greater revenues will yield real returns for shareholders.

Of course, that's just my opinion. You, on the other hand, are perfectly free to disagree. If you believe that FormFactor's got imminent bounce-ability, come on over to Motley Fool CAPS, and tell us why.

Intel is a Motley Fool Inside Value choice and The Fool has created a covered strangle position on Intel. FormFactor is a Motley Fool Hidden Gems recommendation, Motley Fool Options has recommended a bull call spread position on FormFactor, and The Fool owns shares of FormFactor.

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. 688 out of more than 160,000 members. The Fool has a disclosure policy.