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 make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:


CAPS Rating (out of 5)

Yesterday's Change

VirnetX Holding (NYSE: VHC)*(14.9%)
L&L Energy (Nasdaq: LLEN)**(8.8%)
Universal Display (Nasdaq: PANL)***(8.4%)

After three consecutive days down, the markets dropped another 117 points yesterday, or almost 1%, as economic forecasts got revised lower and pessimism crept back into the equation. Amid this gloomy outlook, stocks that fell by even larger percentages are pretty big deals.

The devil's in the details
It's not so hard to understand VirnetX Holding's fall from grace. It's enjoyed a terrific run up over the past few weeks, on pretty much no news specific to it. While it recently opened its communications software technology for licensing to meet 4G LTE specifications, the real moves in its stock began after AT&T (NYSE: T) announced that it was buying T-Mobile. Short sellers who may have been getting squeezed by the run were able to exact their revenge a bit after Jim Cramer said the tide was about to turn.

While the CAPS community tilts toward believing that VirtnetX can outperform the market averages, All-Star members are more wary; 56% of them think it will stumble. TSIF felt the company's lack of new news so long after its Microsoft (Nasdaq: MSFT) deal portended a fall, even though he gave it the thumbs up:

Essentially, I think Virnetx Holdings is "topping out". Thier win against Microsoft is getting a bit old in the teeth with no follow-up wins on their patents. Thier patent technology is growing, but still no revenues. There's a lot of forward speculation on what thier 4G patents might mean and 4G is starting to mature.

Of course, a new announcement might send it right back up. Tell us on the VirnetX Holdings CAPS page whether we should expect to hear something soon.

Cracks in the foundation
The fallout from the accusations of fraud against Puda Coal (Nasdaq: PUDA) are likely weighing on L&L Energy. Both are Chinese small-cap coal miners, and L&L has its own unsavory past. However, L&L began the long road down well before Puda investors got caught by allegations of malfeasance leveled against the firm.

Earlier this year, online fraud-fighter The Street Sweeper exposed many of the problems surrounding an investment in L&L that it warned could have it "go up in smoke." CNBC commentator Herb Greenberg hit L&L last December as a company to beware. The coal miner's stock trades 55% below where it started the year.

Yet plenty of investors agree that L&L is a growth story, thanks to its ability to generate free cash flow. The CAPS community has weighed in, and 93% of those rating the coal miner believe it will outperform the broad market averages, though its low two-star rating suggests they think there are better places for your money.

Add L&L Energy to your watchlist, and see whether long investors are simply acting like canaries in a coal mine.

Not from concentrate
Organic light emitting diode specialist Universal Display took a dive for no particular reason yesterday, though its stock has risen almost 70% since the beginning of the year. The OLED maker licenses its technologies to display-screen manufacturers for use in cell phones, MP3 players, laptop computers, and televisions. While large-screen TV sales haven't been too robust, mobile computing and communications are driving cell phone and computer sales, suggesting that Universal Display's business won't dry up any time soon.

CAPS member MattGontovnick is probably not all that concerned about the pullback in price, given Universal's commitment to R&D spending. That seems to match the sentiment of our overall investor community, where 95% of those rating the OLED king believe it will be able to beat the Street.

Tell us in the comments section below or on the Universal Display CAPS page whether this passes your screen for a rebound.

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 on Motley Fool CAPS at what's happened to your stock can give you an edge over other investors who just react to the market's lead. You can decide for yourself whether it's ready to come back from the dead.

Editor's Note: An earlier version of this article incorrectly stated that SinoCoking & Coke Chemicals was recently accused of fraud. The Fool regrets the error.