Europe has been in turmoil for some time now. Americans citizens and businesses were well aware (who could avoid the Greek headlines?), yet in the same period, the U.S. markets were on the rise in a slow but steady recovery from the recent recession.

Then the U.S. got downgraded from AAA to the unthinkable AA+. The market plummeted, citing European debt and the downgrade as the main motivation. Over the next couple weeks Europe continued its decent into debt and the USA remains downgraded, but the markets are rising again, albeit in a moody way.

It doesn't add up, and that's because investors aren't always rational. In fact, buy high and sell low is generally the norm, despite the intentions to buy low and sell high. It's a funny world.

Enter the contrarian. Webster defines a contrarian as "a person who takes a contrary position or attitude" more specifically, "an investor who buys shares of stock when most others are selling and sells when others are buying." Thus, contrarian investors tend to go against the crowd.

One mind-set of contrarians is that excessive bearishness or bullishness might signal a stock is oversold or undervalued, creating an investing opportunity before the market value corrects itself.

Contrarian investing is an extension of value investing, and if you're a follower of contrarianism, you feel pretty good about the market right now. To a contrarian, the market's excessive bearishness signals a great time to invest. And to a contrarian, there's no time like the present.

To be sure, on one knows if the market has more downside than upside in the present political and financial climate, and there's plenty of evidence and experience to suggest that a falling market reflects an legitimate danger to stock holders.

Yet until we reach a point of total capitulation, a contrarian has as much right to speculate as anyone else.

If you're a believer in contrarianism you probably like to keep an eye on the stocks seeing maximum pessimism. To help you along, here is a list of S&P 500 stocks with significant institutional selling over the last quarter.

List sorted by institutional selling as a percentage of share float. (Click here to access free, interactive tools to analyze these ideas.)

1. Cephalon (Nasdaq: CEPH): Biotechnology Industry. Market cap of $6.24B. Current price at $80. Net institutional share sold over the current quarter at 13.3M, equivalent to 18.81% of the company's 70.71M share float. The stock has gained 36.29% over the last year.

2. Alpha Natural Resources (NYSE: ANR): Industrial Metals & Minerals Industry. Market cap of $3.55B. Current price at $29.45. Net institutional share sold over the current quarter at 42.0M, equivalent to 18.66% of the company's 225.12M share float. The stock is currently stuck in a downtrend, trading -21.66% below its SMA20, -29.49% below its SMA50, and -42.5% below its SMA200. It's been a rough couple of days for the stock, losing 6.24% over the last week.

3. Big Lots (NYSE: BIG): Discount Variety Stores Industry. Market cap of $2.26B. Current price at $30.13. Net institutional share sold over the current quarter at 8.8M, equivalent to 11.9% of the company's 73.98M share float. The stock is currently stuck in a downtrend, trading -8.87% below its SMA20, -9.1% below its SMA50, and -14.4% below its SMA200. The stock has performed poorly over the last month, losing 13.04%.

4. Lexmark International (NYSE: LXK): Computer Based Systems Industry. Market cap of $2.35B. Current price at $29.62. Net institutional share sold over the current quarter at 8.9M, equivalent to 11.36% of the company's 78.36M share float. It's been a rough couple of days for the stock, losing 5.73% over the last week.

5. United States Steel (NYSE: X): Steel & Iron Industry. Market cap of $3.93B. Current price at $27.28. Net institutional share sold over the current quarter at 15.0M, equivalent to 10.47% of the company's 143.21M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.44). The stock is currently stuck in a downtrend, trading -23.84% below its SMA20, -32.36% below its SMA50, and -44.8% below its SMA200. It's been a rough couple of days for the stock, losing 10.59% over the last week.

6. Torchmark (NYSE: TMK): Life Insurance Industry. Market cap of $3.71B. Current price at $35.32. Net institutional share sold over the current quarter at 9.9M, equivalent to 9.57% of the company's 103.42M share float. Might be undervalued at current levels, with a PEG ratio at 0.86, and P/FCF ratio at 3.91. The stock is currently stuck in a downtrend, trading -7.57% below its SMA20, -12.86% below its SMA50, and -15.16% below its SMA200. The stock has performed poorly over the last month, losing 14.81%.

7. Janus Capital Group (NYSE: JNS): Asset Management Industry. Market cap of $1.13B. Current price at $6.07. Net institutional share sold over the current quarter at 16.5M, equivalent to 9.16% of the company's 180.04M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.66). Might be undervalued at current levels, with a PEG ratio at 0.75, and P/FCF ratio at 4.38. The stock is currently stuck in a downtrend, trading -21.54% below its SMA20, -29.54% below its SMA50, and -45.75% below its SMA200. It's been a rough couple of days for the stock, losing 12.54% over the last week.

8. Gap (NYSE: GPS): Apparel Stores Industry. Market cap of $8.54B. Current price at $15.52. Net institutional share sold over the current quarter at 31.4M, equivalent to 7.72% of the company's 406.51M share float. Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 10.44. The stock is currently stuck in a downtrend, trading -12.95% below its SMA20, -13.96% below its SMA50, and -23.67% below its SMA200. The stock has performed poorly over the last month, losing 19.29%.

9. H&R Block (NYSE: HRB): Personal Services Industry. Market cap of $4.10B. Current price at $13.42. Net institutional share sold over the current quarter at 21.5M, equivalent to 7.55% of the company's 284.81M share float. The stock is currently stuck in a downtrend, trading -6.04% below its SMA20, -11.55% below its SMA50, and -7.7% below its SMA200. The stock has performed poorly over the last month, losing 12.17%.

10. LSI (NYSE: LSI): Semiconductor Industry. Market cap of $3.84B. Current price at $6.34. Net institutional share sold over the current quarter at 41.8M, equivalent to 7.32% of the company's 571.12M share float. It's been a rough couple of days for the stock, losing 10.33% over the last week.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Becca Lipman does not own any of the shares mentioned above.Institutional data from Yahoo! finance, all other data sourced from Finviz.