"Don't catch a falling knife." Thus commandeth the old saw (to mix a cutlery metaphor).

But if people weren't tempted to catch cutlery in the first place, there'd be no need for this little bit of investing wisdom, would there? The idea of buying a former highflier at a discount price certainly has its attractions. The trick, of course, is to increase the odds that when you make your grab, you're catching haft, not blade. That's where we come in.

In The Motley Fool's continuing effort to keep your investing dollars safe, today we once again assume our position beneath Mr. Market's silverware drawer. As the knives plummet, we'll measure who's fallen farthest. Then we'll head over to Motley Fool CAPS and ask which of these stocks Foolish investors think are ready to rebound to new highs -- if any.

Let's meet today's list of contenders, drawn from the latest "52-Week Low" list at Nasdaq.com:

52-Week High

Currently Fetching

CAPS Rating

Callon Petroleum  (NYSE:CPE)




OneBeacon Insurance  (NYSE:OB)




American Railcar  (NASDAQ:ARII)












Polypore International  (NYSE:PPO)




Home Solutions  (NASDAQ:HSOA)




Companies are selected from the "NASDAQ 52-Week Low" list published on Nasdaq.com on the Saturday following close of trading last week. 52-week high and current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

If there's one good thing about a broad-based market sell-off, it's that you find a lot of terrific companies getting the baby 'n' bathwater treatment -- tossed out on their rosy little bums as if they were bums of another sort. You just know that some of these babies are gonna bounce right back once the suds subside.

Has the bounceback already begun, or will last week's sell-off resume this week? No one knows for sure. We're still several percent below the market's highs, though, and chances are good that we can still find some valuables strewn among the wreckage. In today's list, we see seven stocks that have been hit hard -- and one that CAPS players think has a serious shot at hitting right back. So without further ado, ladies, and gentle-Fools, let's review ...

The bull case for Callon Petroleum
Based in Natchez, Miss., Callon engages in the exploration, development, acquisition, and production of oil and gas in the Gulf of Mexico, Louisiana, and Alabama. With 33 All-Star outperform ratings to its name, and only one underperform, Callon clearly enjoys the favor of the savviest CAPS players. Few of them have submitted substantive "pitches" explaining their optimism.

All-Star player WCWlooky has, however, and writes: "I am not sure on the timing or catalyst that will send Oil and gas higher and higher. I do feel that it will happen because of limited supply, growing demand and political turmoil in many regions of production."

It's a logical argument, if not exactly specific to Callon. Let's see if LifeLvnFool can do any better:

Since the stock bottomed at the end of last year and was low through the first quarter, new life was given to the company with the aquisition of the Entrada natural gas field in the gulf of Mexico from BP. P/E is very reasonable as well. A good stock to buy on a dip.

But perhaps the most detailed explanation of why Callon might outperform comes from CycleFreak7, who argued back in January:

CPE and other mid-to-small cap energy companies have all suffered price depression due to the precipitous drop in crude oil and natural gas prices. However, these prices will rebound. OPEC has ordered to production cut-backs and threatens a third. ... As prices for these commodities begin to increase, so will the stock prices of energy companies.

Sounds logical to me, but so far, things haven't played out that way. To the contrary, Callon's stock has fallen 26% over the past year, as the S&P climbed 11%.

Why the disconnect? It may have something to do with the firm's declining revenues, which were down year over year in each of the last couple of quarters. Margins are also falling, and free cash flow for the last 12 months is negative. That said, if Callon can just halt the decline in its numbers, it might start to look attractive, based on its below-industry-average P/E and still-above-average (though falling quickly) gross and operating margins.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Callon -- or even what our existing CAPS players are saying. We also want to hear what you know about the company. Do you see capex moderating in the near future, so the firm can be able to sustain itself on its own cash from operations? And more generally, do you think oil & gas are nearing an inflection point, and ready to rise once more? If you've got an opinion, we've got a place to voice it.

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

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. 177 out of more than 34,000 rated players. The Fool's disclosure policy is extremely flexible.