Contrarian Shopping List

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

-- Warren Buffett

Out of the quadrillions of quotations quarried from that most loquacious of quotationists, this one holds a special place in the hearts of Foolish investors. Are you looking to "buy low" so as to later "sell high?" If so, your best chance of getting that initial, low entry price comes when panicked sellers are unloading their shares at whatever price is on offer.

In today's column, we search the ranks of Wall Street's motivated sellers and note which stocks they're most frantic to unload. Therein may lie the makings of a contrarian investor's shopping list. But don't just take my word for it. Before you decide to go in through Wall Street's out door, check your thinking against the collective intelligence of Motley Fool CAPS investors.

Today's contenders include:

Company	Currently Fetching	CAPS Rating (Out of 5 Stars)
Omnova Solutions (:OMN)	$5.28	***
Multi-Fineline Electronix (:MFLX)	$15.09	**
Nautilus (NYSE:NLS)	$14.30	**
American Home Mortgage (NYSE:AHM)	$21.63	*
Cost Plus (NASDAQ:CPWM)	$8.80	*
WorldSpace (NASDAQ:WRSP)	$3.57	*
TorreyPines Therapeutics (NASDAQ:TPTX)	$6.87	Not rated

Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money on the Saturday following close of trading last week. Price decline and current pricing also provided by MSN Money on the same date. CAPS ratings from Motley Fool CAPS.

The problem with pessimism
The problem with going against the grain on Wall Street is that when professional traders get pessimistic, their grim outlook can become a self-fulfilling prophecy -- at least in the short term. The more that institutions become desperate to abandon a stock, the lower the price they'll accept to get rid of it. And as their "ask" prices drop, the "bid" prices of buyers will fall in tandem, creating the very price decline that they feared in the first place.

Until the selling stops.

When it will stop is anybody's guess. But until it does, savvy investors have a chance to "get greedy" and snap up some bargains from these fearful sellers -- if bargains they truly be.

Beggars cannot be choosers
Judging by the reaction on CAPS to today's list, though, bargains they be not -- or at least not this week. Only one company out of the seven gets even the grudging approval of a three-star rating. But as that seems to be the closest we're going to get to a CAPS endorsement, this company will be our focus today: Omnova Solutions, a maker of emulsion polymers and specialty chemicals.

The bull case for Omnova
Of the 53 investors who've voted with their virtual wallets on Omnova, bullish sentiment outnumbers the bearish 50-to-3. As for why that is, however, I'm afraid your guess is as good as mine. Although several CAPS players have contributed pitches explaining their rating the firm an "outperformer," these explanations range from:

• the ambiguous -- "it's an interesting company and it just looks like a good one" -- to ...
• the painfully honest -- "jumping on bandwagon" -- to ...
• the surreal -- "10,000."

Help wanted
So you see, we could really use some help on this one. Is Omnova a hopeless case, undeserving even of the few stars it's managed to claim? Or is there value to be found in a $222 million-market-cap firm generating $6.6 million in free cash flow per year, and expected to more than double its profits by the end of next year?

Whatever your views, don't keep them to yourself! Come on over to Motley Fool CAPS, and tell us why Wall Street is wrong on this one. If wrong it be.

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 220th out of nearly 27,000 raters. The Fool has a disclosure policy.