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:

Stock

CAPS Rating
(out of 5)

Friday's Change

Life Partners Holdings (Nasdaq: LPHI)

**

(20.2%)

Rambus (Nasdaq: RMBS)

**

(17.9%)

NVIDIA (Nasdaq: NVDA)

****

(10.9%)

Concerns over the country's economic health and the continued pullback in commodities caused stocks to tumble 100 points on Friday, or almost 1%, so stocks that went down by even larger percentages are pretty big deals.

The devil's in the details
Last year New York courts issued a Solomon-like ruling in a three-way case that pitted the life settlement industry against investors and the insured. The court said an individual had a right to take out an insurance policy for whatever reason he wanted and the decision couldn't be second-guessed. The insured could also sell that policy to whomever he chose, so proceeds couldn't be blocked from being paid out to investors, and in the process, the life settlement business was validated. The Phoenix Companies (NYSE: PNX), which insured the deceased, came out the loser because it said the plans were illegal and it shouldn't have to pay out anything.

The difference between life settlement policies and viaticals such as those sold by Life Partners Holdings and Imperial Holdings (NYSE: IFT) is really one of degrees. The difference between them is how long the insured person has to live: typically, if it's two years or less, it's considered a viatical; more than that and it's a life settlement.

Life Partners however is in trouble because the SEC questions the life expectancy it uses on its insured. The regulatory agency charges the viatical leader intentionally understates life expectancies to be able to show higher returns to potential clients as a means of increasing its sales. Life Partners and other viatical companies benefit when policyholders live longer than expected.

Earlier this year Life Partner's announced it was under investigation by the SEC and the other day it said the regulator issued a Wells Notice that recommends civil actions be brought against its general counsel and CEO.

CAPS member DELMCC99 was hopeful before the latest news, because insiders, which hold about half the company's stock, haven't been selling shares.

This is a speculative play. There have been a lot of law firms circling the company like sharks after the price drop in the last quarter. I notice that the insiders are still holding so that shows confidence and the ratios look good.

You can add Life Partners to your watchlist and let us know on the Life Partners Holdings CAPS page whether an investment here or in one of its viaticals is a good bet.

Cracks in the foundation
Investors in Rambus got slammed when an appeals court ruled the tech licensing company shredded documents in its patent infringement cases against Micron (Nasdaq: MU) and Hynix Semiconductor. The long-running case has taken several turns over the years, but the latest development means that a $397 million settlement it had been expecting to receive won't be coming its way anytime soon. As Rambus makes most of its money from its patents, this is a serious blow to its viability.

Earlier this year CAPS All-Star russfischer1013 expected Rambus would come out on the short end of the stick, but the memory maker still enjoys broad CAPS support with 84% of those rating Rambus believing it would outperform the broad market averages. Add the stock to the Fool's free portfolio tracker to see whether a reassessment is going to be necessary.

Not taking flight
Although NVIDIA's stock got hit Friday as well as concerns about its core chip business remain, the Rambus decision could help it in its own appeal. Last year the International Trade Commission ruled against NVIDIA saying it violated its patents. While each case involves unique patent concerns, the issue of Rambus shredding documents that would prove it misled the semiconductor industry's standards-setting group JEDEC have been part of the record for years.

Of more immediate concern is the impact competition from the likes of Texas Instruments (NYSE: TXN) and other mobile players will have on NIVIDIA's business even though it was able to post analyst-beating earnings results.

CAPS member Razorg finds a whole host of growth opportunities facing NVIDIA that makes the sell-off attractive.

Windows 8 has been shown running on Tegra meaning you can compose a whole computer around [NVIDIA] and leave out AMD and Intel.

The mobile business has just really started taking off, that market will definitely expand going forward, and will get a boost in particular when they get Icera integrated.

And who says the Intel license agreement is a one time deal? [That] could easily continue until [Intel] buys them out.

Chip in your opinion on the NVIDIA CAPS page and let us know which is the bigger catalyst: its chip models or a Rambus redo?

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.

Motley Fool newsletter services have recommended NVIDIA. The Motley Fool owns shares of Texas Instruments. Motley Fool newsletter services have recommended writing puts in NVIDIA. 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 does not have a financial position in any of the stocks mentioned in the article. You can see his holdings here. The Motley Fool has a disclosure policy.