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:

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 desperate institutions become 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.

In through the out door
When it stops 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). This week, investors believe they've found such a bargain in the stock of medical robotics pioneer Hansen Medical.

Not to be confused with drinks purveyor Hansen Natural (NASDAQ:HANS), Hansen Medical actually has more in common with Motley Fool Rule Breakers recommendation Intuitive Surgical (NASDAQ:ISRG). Both companies operate in the field of medical robotics and even share the same founders -- CEO Dr. Frederic Moll and Chief Technical Officer Robert Younge. Another thing they've got in common: The stocks have been on a tear, with Hansen in particular more than doubling since going public in November, before relapsing in recent weeks.

None of that has dissuaded Foolish investors, though, more than 90% of whom continue to rate the stock an outperformer. Let's find out why.

The bull case for Hansen

• Not one, but two All-Star Fool staffers recommend Hansen. TMFBreakerJava says: "Brought to you by the people behind Intuitive Surgical. These people know the market, they know the technology." TMFSmashy agrees, calling Hansen "a natural ISRG buyout target" and predicting it "should perform well on its own, regardless."
• FearlessFreep adds that Hansen's "Sensei product will greatly improve catheter-based interventional procedures at a lower cost to health care organizations than its chief competitor's product. Also, I believe the potential for this product in off-label applications is enormous. "

Time to chime in
Are they right? Are they wrong? Tell us what you think on Motley Fool CAPS. You see, on CAPS, it doesn't matter if your name has a "TMF" in front of it or a "CFA" after it. Unlike Wall Street, we welcome all comments on CAPS, where the best arguments -- and the best records -- carry the day.

(Psst! By the way, if you want to learn more about Hansen's founders' past success at Intuitive Surgical, you can read all about the company in Motley Fool Rule Breakers. Free 30-day trials are yours for the asking.)

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. 350 out of nearly 30,000 rated players. The Fool has a disclosure policy.