"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 looking to bag a bargain, a panicked sell-off by jittery investors offers you a great chance to snap up stocks on the cheap.

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

Until it does, savvy investors can "get greedy," snapping up bargains from these fearful sellers. (Assuming they really are bargains.) In today's column, we'll see which stocks Wall Street's motivated sellers are most frantic to unload -- and whether you should buy 'em:


Recent Price

CAPS Rating
(out of 5)

China North East Petroleum Holdings (NYSE: NEP)



Trina Solar (NYSE: TSL)



TiVo (Nasdaq: TIVO)



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

Wall Street vs. Main Street
Up on Wall Street, the pinstripe-and-wingtip crowd are unloading these stocks just as fast as they can. Down here on Main Street, though, each of these companies still has its fans.

For example, CAPS' souladventurer sees Trina as the "top" company in the global solar sector, "an industry still in its birth and pending potential massive expansion as people shift demand to renewable resources." In light of the BP (NYSE: BP) / Halliburton (NYSE: HAL)Transocean (NYSE: RIG) Gulf of Mexico disaster, "[t]he planetary repercussions of fossil fuel addiction can no longer be rationally denied. There's actually no alternative than to invest in alternative energy."

Bad news for the oil industry, no doubt, but great news for Trina Solar.

TiVo gets props for forward-thinking of a different nature. While the company has suffered a legal setback in its feud with DISH Network (Nasdaq: DISH), CAPS member viyer00 says: "The odds are in their favor on winning the appeals case. A settlement or a buyout would be positive as well."

Ah, the eternal seduction of the "somebody could always buy us out" hypothesis. Yes, sometimes it works. Against all odds, it worked for Palm last month. And it could work for TiVo as well. Personally, though, I prefer to put my investing hopes in something a bit more substantial. And it seems most Fools agree; the CAPS community gives both of today's forward thinkers subpar, two-star CAPS ratings.

So what do investors like better? How about the tried and true virtues of investing in oiland China.

The bull case for China North East Petroleum Holdings
Never heard of China North East? Allow CAPS member tytymhorau to introduce you. "Chinese energy micro-cap [is] engaged in the exploration/production of crude oil in northern China. An internal source for some of China's massive and mushrooming crude oil needs. Currently grossly undervalued in the mid-6's due to market concern over a delay in reporting restated financials."

Um, delayed reporting? A need to restate its numbers? That does sound worrisome. Then again, if this CAPS member is right about this being naught more than a tempest in a teacup, it's possible that fellow CAPS member pchop123 is also right about China North East having "huge" upside potential.

After all, as CAPS member StockEse points out: "So long as it remains in favor with the government, NEP should do well. Since it just hammered out a contract for 30 new wells, it seems like a solid and cheap short/mid-term investment."

Now new wells are all (forgive me) well and good. But what we really want to know is what's down in 'em. Last we heard, China North East had a mere 5.5 million barrels of proven oil reserves to its credit.

Thanks to the restatement delay, though, this data is well over a year out of date. But for the sake of argument, let's assume it's reliable. At the going rate of $74.36 per barrel, 5.5 billion barrels of oil would be worth $409 million at spot prices.

Still, paying $142 million in market cap for China North East's $409 million of potential assets looks like a good bargain. It could be an even better bargain if the company's reserves have grown in the year since we last got a read on proven reserves. It could be better still if these 30 new wells that StockEse mentioned hit paydirt.

Foolish takeaway
Based on the selling, which has forced the shares down to a forward earnings multiple below four, Wall Street doesn't seem to trust that these happy eventualities will pan out. In contrast, the Fools rating the stock seem to be betting that they will. Where do you stand on the question? Tell us here.

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. 460 out of more than 165,000 members. The Fool has a disclosure policy.