Fearful Stocks for Greedy Investors

"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
-- Warren Buffett

Of all the Oracle of Omaha's orations, this one holds a special place in Foolish investors' hearts. When you're looking to bag a bargain, a panicked sell-off by jittery investors offers you a great chance to buy some stocks on the cheap.

In the short term, professional traders' pessimism can become a self-fulfilling prophecy. When desperate institutions lower their asking prices to get rid of a stock, buyers' bid prices fall in tandem and create the very price decline that both sides feared in the first place -- until the selling stops.

Until it does, savvy investors can "get greedy," by snapping up bargains -- assuming they really are bargains -- from these fearful sellers. In today's column, we'll see which stocks Wall Street's motivated sellers are most frantic to unload. Once we've compiled this shopping list of potential picks, we'll check them against the collective intelligence of Motley Fool CAPS.

Today's contenders include:

Stock	Recent Price	CAPS Rating (5 Max):
Yingli Green Energy  (NYSE: YGE  )	$6.18	*****
Ameristar Casinos  (Nasdaq: ASCA  )	$6.44	***
YRC Worldwide  (Nasdaq: YRCW  )	$3.95	***
DryShips (Nasdaq: DRYS  )	$24.82	**
OfficeMax	$5.47	**

Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money on the Saturday following the close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Fear ran rampant on Wall Street last week, and investors ran willy-nilly. They bought one day and sold the next -- and they stopped to see what they were buying and selling only as an afterthought.

Why, just look at today's list of the bankers' most fervent sell-offs. Out of just five stocks making the cut, two of 'em are bona fide Motley Fool recommendations. Not that we mind it, necessarily, when Wall Street hates our stocks. That just means better entry prices for us. But it is surprising.

It's also neither here nor there, because today's top stock -- most loathed on Wall Street, and most loved in CAPS-land -- is Chinese solar upstart Yingli Green Energy, and it's not a Fool rec. But should it be? Let's see what the bulls have to say about it.

The bull case for Yingli Green Energy 
River2River wrote back in March:

This seems like one of the potential winners in the solar space. They seem to have the food chain covered pretty well from making ingots through installation. As peak oil takes [its] toll over the coming years, [Yingli] may be one of the best gainers.

CAPS player darkstar13 agreed back in July:

[Yingli] has about 1/3 of their Polysilicon supply for the current year locked in through a purchase agreement. There [have] also been several decent contract announcements with European industries and governments. I believe they have an advantage in being a Chinese company in that their labor costs will remain lower than their competitors in the long run, which will allow them to win more contracts and grow faster than their competitors. 

How much faster? JohnTheTrader tells us that despite being "[a] great solar play with a single-digit forward PE," Yingli boasts "[o]ver 100% quarterly revenue and profit growth."

Wow. 100%. That is fast. It's not every day you see a company doubling its sales and earnings ... and selling for a price-to-earnings ratio of 7. But that's precisely the situation at Yingli.

On the other hand, up until this point we've been talking exclusively about Yingli's purported profits under GAAP. Although the company looks exceedingly cheap from that perspective, I admit, I do have some concerns over how much free cash flow Yingli is generating.

Sure, management tells us that "its current cash and expected cash flow from operations and committed available lines of credit will be sufficient to cover its capital expenditures." But I wouldn't mind being able to independently verify that statement -- say, by taking a gander at the company's cash flow statement. Yingli seems reluctant to part with that particular document, however, in its regular earnings releases. 

Unless Yingli produces the data to show otherwise, I have to err on the side of caution and assume this company is just as free cash flow-negative as it has been when reporting its annual numbers (in a 20-F filing). Just like every other company in the solar space -- from SunPower (Nasdaq: SPWRA  ) to First Solar (Nasdaq: FSLR  ) to Suntech (NYSE: STP  ) -- you have to assume there's no free cash flow here. Yep, I'm letting fear win out over greed this time, and I'm staying away from Yingli.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Yingli Green Energy -- or even what other CAPS players are saying. We want to hear your thoughts. Head on over to Motley Fool CAPS, and tell us what you think.

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