"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 (5 max):

Cephalon  (NASDAQ:CEPH)

$81.35

$53.29

*****

Energy Conversion Devices (NASDAQ:ENER)

$83.20

$12.14

****

Eagle Rock Energy  (NASDAQ:EROC)

$16.25

$2.78

****

Danaos Corporation  (NYSE:DAC)

$25.50

$2.96

****

CIT Group (NYSE:CIT)

$13.00

$1.53

**

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.

Knock, knock
Who's there? If you ask most CAPS members, it's Opportunity with a capital "O."

With the sole exception of CIT Group (word has it that this firm is at death's door), Fools feel decidedly optimistic about these stocks. Their prices have tumbled, and Fools are ready to reap the rebound. But there's one company they love more than all the rest. That's why today, we'll be discussing ...

The bull case for Cephalon
CAPS All-Star Alex1963 introduces us to this "international biopharmaceutical company dedicated to the discovery, development and marketing of innovative products to treat human diseases. Currently its four core therapeutic areas are central nervous system disorders, pain, cancer and addiction." Alex particularly likes the firm's minimal debt load, "excellent efficiency numbers, mgt, profitability, strong growth & growth history."

(Before you ask, I'm not entirely certain which "efficiency numbers" he's talking about. Cephalon's return on equity and assets, for example, both look subpar relative to larger rivals like GlaxoSmithKline (NYSE:GSK) or Johnson & Johnson (NYSE:JNJ) -- and even Sepracor edges Cephalon out.)

Regardless, fellow member IBDvalueinvestin calls Cephalon "one of the best Drug developers I have ever seen."

And yet another of our best-rated CAPStars, zzlangerhans, puts the lie to "Obama pessimism for pharmaceuticals," calling the phenomenon "overblown. I don't believe his policies will fundamentally change the business model or profitability of mid-to-large cap biotechs" like Cephalon.

So, there's plenty of enthusiasm for Cephalon today. But is it warranted?

In a word? No
At first glance, Cephalon doesn't look like much of a bargain. It sports a P/E north of 16, but a growth rate posited at less than 12% -- no margin of safety to be found there.

A second glance doesn't help much, either. Free cash flow for the past 12 months has come in at just more than $34 million -- a mere fraction of the firm's $251 million in reported earnings. And even if you take a longer-term view, Cephalon has averaged $145 million per year of free cash flow generated over the past five years.

Granted, $145 million a year is not chump change, and it's not nearly as bad as the GAAP loss Cephalon incurred over the same period. But to my Foolish eye, it's still not good enough to justify Cephalon's current market cap of $3.9 billion.

Foolish takeaway
Admittedly, I'm no Big Pharma junkie. (I'm more of a growth-at-a-reasonable price guy.) While I don't much like Cephalon's numbers, I'm not particularly enamored of the slow-growth giants like J&J and Glaxo, either -- even if they do have better "efficiency numbers" than today's Fool fave.

What's more, my views are far from the norm on CAPS, where all three of these companies score high marks. So feel free to disagree with me. Just slide on over to Motley Fool CAPS, and tell us why you think Cephalon's a buy -- or best left alone.

Johnson & Johnson is a Motley Fool Income Investor selection.

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 135,000 members. The Fool has a disclosure policy.