"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:

Currently Fetching

CAPS Rating

Flamel Technologies  (NASDAQ:FLML)






Brush Engineered Materials  (NYSE:BW)



American Commercial Lines  (NASDAQ:ACLI)



La Jolla Pharmaceutical  (NASDAQ:LJPC)



Hovnanian (NYSE:HOV)



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.

In through the out door
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). This week, investors believe they have found a steal of a deal in a most surprising place -- our very own Motley Fool Hidden Gems portfolio!

The stock is French biotech pioneer (yes, you read that right) Flamel Technologies, and it's taken a real drubbing up on Wall Street of late. Over the last three months, the stock is down 31%. And yet Foolish investors still love it. Why? Let's find out.

L'argument de taureau pour Flamel
The bull case for Flamel seems to rest on three legs: First is the company's "Micropump"-controlled release formulation of GlaxoSmithKline (NYSE:GSK) blood-pressure drug Coreg (and Coreg-CR), and the revenue stream that comes with it. Second is the hope that Flamel's technology will yield similar deals with other big pharma players. Third, there's the hope that new CEO Stephen Willard will do a better job with Nos. 1 and 2 than did his predecessor (and Flamel founder), Dr. Gerard Soula. Let's listen in as two of our CAPS All-Star investors explain why they remain bullish on the company:

  • All-Star player mansloth actually begins on a bit of a down note: "On the surface, the company hasn't changed much in the 1+ years since Soula was ousted. I have always liked Willard as a leader, but I fear now that the change in management may have done more to hurt this company than to help it." mansloth does, however, believe "royalties from CoregCR should at least slow the cash hemorrhage and secure the company financially for the short term."

Hmm. Stopping the hemorrhage? Hardly a ringing endorsement. Perhaps fellow All-Star SureBeatsWorking can muster up more enthusiasm?

  • "I've owned this stock in my regular portfolio for 2.5 years at a price almost identical to what I paid today. It was probably one of the first 10 stocks I ever bought. It pretty soon sunk about 50% mainly due to cancelled contracts and promises of deals that never materialised."

Uh-oh. But it gets better. SBW is more optimistic than mansloth about the new CEO, calling Willard "a top class leader." SBW also agrees that "with Flamel using one of its drug delivery technologies to deliver Coreg CR, the once a day successor to Coreg IR, things are looking up." Even so, SBW concludes, "Flamel needs to now sign new deals to prove itself, if it can this will be a long term investment, otherwise if it looks like new deals aren't materializing I may sell within the next few years. At the moment it is still in the wait and see phase."

Time to chime in
Motley Fool Hidden Gems investors are well acquainted with this kind of "on-the-one-hand ... but on-the-other" sentiment about Flamel. It hearkens back to Gems co-analyst Tom Gardner's original write-up on the company, which was replete with quotes like: "Initially, the valuation might scare you," "I won't hide from the fact that it's tough to value this business. The earnings are uneven and the technology new," and the now prophetic-sounding "if Flamel fails to ink new partnerships and significantly expand the use of its technologies, shareholders will suffer."

But investors just getting acquainted with the company (perhaps from this column) may have another take. If that's you, then we'd like to know your thoughts. Do the firm's technology and prospects impress you? Enough to forgive its history of burning cash and posting net losses? Either way, tell us what you think.

(Psst! And if you'd like more information about Flamel before making your decision, you're in luck. We've got a 30-day free trial to Hidden Gems on offer. Take us up on it, and read all about why we recommended the company [twice!] before deciding whether it's a buy.)

Fool contributor Rich Smith does not own shares of any company named above. Flamel Technologies is a Motley Fool Hidden Gems recommendation. GlaxoSmithKline is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy.