Your stock just took a nosedive, but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can lead to excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:

Stock

CAPS Rating 
(out of 5)

Wednesday's Change

LeapFrog Enterprises (NYSE: LF) ** (22.3%)
KV Pharmaceuticals (NYSE: KV-A) **** (19.7%)
Thoratec (Nasdaq: THOR) ** (6.2%)

Reversing several days of steady declines, the bulls took charge of the market yesterday, which jumped nearly a full percentage point to get things going again. Yet stocks that went down even more are bigger deals.

The devil's in the details
Traders were playing leapfrog with LeapFrog Enterprises  stock yesterday, trying to get as far away from it as possible after its disappointing earnings results. It shouldn't have come as such a surprise, because there were plenty of warning signs.

First, Rick Munarriz warned as far back as November that LeapFrog's stock was no prince, because the company merely reiterated full-year guidance after a strong third-quarter run, implying the situation was deteriorating. Then there has been the string of disappointing holiday sales reports from retailers everywhere. TV sales went dark at Best Buy (NYSE: BBY), while American Eagle Outfitters experienced an 11% drop in same-store sales.

The strong showing for November from many merchandisers lulled analysts into thinking December would be the same. Instead, retailers had been so promotional at the start of the shopping season that consumers did the bulk of their shopping then. Add in a Saturday Christmas, meaning stores were closed, followed by a blizzard Sunday in the Northeast, and you had a precipitous drop-off in sales during a week that's often just as important as before Christmas.

Now that LeapFrog's shares are selling at a discount, it may look attractive to another toymaker like Mattel (NYSE: MAT). Other toy companies are being shopped, too, including HIT Entertainment, the owner of Thomas the Tank Engine and Bob the Builder. Its private equity owner is shopping its stake to a number of toymakers, but LeapFrog's innovative, educational lines might strike the right chord.

Although three-quarters of the CAPS members rating LeapFrog believe it will outperform the market, its lowly two-star rating means they think there are better choices out there. Let us know on the LeapFrog CAPS page whether the market has outgrown this stock.

Delay is preferable
Like a homeowner hoping the deposited paycheck hits the bank account before the mortgage check does, KV Pharmaceuticals was hoping the Food and Drug Administration would approve the pre-term birth drug it's developing with Hologic (Nasdaq: HOLX). That's because it would have gotten $80 million in financing just as it would have to pay out $25 million to its partner.

But the FDA is nothing if not cautious these days -- some might say gun-shy -- and it delayed a decision on Gestiva until April. MannKind (Nasdaq: MNKD) had similar problems with its inhaled insulin Afrezza, which was supposed to be decided on by the end of December. The FDA put off a ruling until next month.

While the delay means KV Pharmaceuticals doesn't have to pay out any money just yet, it also means its desperately needed financing is delayed, too. As a result, the company needs to evaluate its liquidity position, because a lack of financing could result in it defaulting on its loans.

More than 95% of the CAPS members rating the pharmaceutical think it will get approval for Gestiva, and because those loans don't mature till 2013, KV Pharmaceuticals ought to get the financing it needs if and when the FDA approves it in April. Follow along with its trials and tribulations by adding the stock to the Fool's free portfolio tracker.

Not-so-rarefied air
What did I ever do to you? That might be what Thoratec is asking today after its stock was socked by a JPMorgan Chase analyst who reiterated a neutral rating after the medical devices maker made an apparently uninspiring presentation at a health-care conference. It's not that there was anything wrong with Thoratec's presentation, and another analyst has said the company's timeline for coming to market with its next-generation heart pump was about what he expected.

The problem comes from competition, which is quickly moving in to fill the need for smaller, less-invasive pumps, particularly from Heartware International. Yet Thoratec still holds a commanding industry lead, and Heartware's pump is at least a year away from FDA approval, despite being available in Europe. That's enough to make CAPS member bizcbug7 enthusiastic.

Pumped up for THOR! Price down nearly 40%. ROA increasing yoy, and gross margins are holding.

I'm with bizcbug7 on this one, and I'm heading over to CAPS to mark it to outperform the broad market averages. You can tell us what you think on the Thoratec CAPS page.

Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what has happened to your stock can give you an edge over other investors who just react to the market's lead.

That's why it pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether it's ready to come back from the dead.

Best Buy is a Motley Fool Inside Value recommendation and a Motley Fool Stock Advisor choice. Motley Fool Options has recommended buying calls on Best Buy. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey owns shares of Best Buy but does not have a financial position in any of the stocks mentioned in the article. You can see his holdings. The Motley Fool has a disclosure policy.