Things are looking pretty grim at Reebok International (RBK): Earnings are under pressure, down a hefty 49% in the first quarter. Prices and orders are slumping, and inventories are on the rise. Reebok's shares, which hit 52 1/4 last summer, have slid to 28. So why is money manager Bob Olstein salivating over Reebok and snapping up the stock?

He thinks that Reebok is a buyout deal just waiting to happen. ''We're betting that a major consumer-products company before long will recognize Reebok's great brand franchise and assets and make a move to acquire it,'' says Olstein, chairman of Olstein Financial Alert Fund.

Second only to Nike in the U.S. athletic-shoe and -apparel market, Reebok ''is ridiculously undervalued--based on its brand name, goodwill, and free cash flow,'' he adds. He calculates that Reebok's annual excess cash flow (after capital expenditures and taxes) runs to about $150 million.

Olstein focuses on companies that are selling at a discount to their intrinsic, or private market, value. ''I find such companies during periods of disappointing earnings and negative market psychology,'' he says. Reebok falls in just that category, he adds, with practically no analyst recommending the stock. Olstein's fund has outscored the Standard & Poor's 500-stock index each of the past two years.

He figures that Reebok is worth 36. In a buyout, however, according to Olstein, Reebok is a bargain at 40. Reebok has been in and out of the rumor mills for two years.

''We have heard that management is now prepared to put Reebok up for sale,'' says Olstein, ''once it decides that it can't turn it around fast enough.'' Adds Olstein: ''Our sources say that point has been reached.'' Reebok Chairman Paul Fireman ''has indicated to analysts [that he would welcome offers],'' says Olstein. Part of the company problem is the fierce competition in the industry. ''Reebok needs a new direction and strategy to reinvigorate its product lines--which are basically good and attractive,'' argues Olstein.