The Contrarian Shopping List

"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:

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 desperate institutions become 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.

Shoppers, start your engines
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). Which of the above stocks fits the bill? Today, we've got a pair of potential winners: Oilsands Quest and U-Haul, a.k.a. AMERCO. But which one shall we feature today?

Reviewing the comments that CAPS players have posted on these two companies, it's pretty clear that AMEX-listed, Saskatchewan-based Oilsands is the more popular choice, garnering nearly eight times the number of ratings AMERCO receives. But I've never been much for popular stocks. Give me an old standby any time -- and that's AMERCO through and through. U-Haul's parent company may not generate as much excitement as the sticky sand sucker does, but to me, that fits the contrarian bill all the more.

Here's what Fools are saying about AMERCO:

• Newcomer johnporche gets off to a great start on CAPS with his argument that AMERCO is a "rock solid business," and "a no brainer for mid term performance." He does, however, caution that the "US military is reducing moves from 3 yrs to 4 yrs -- may have an impact in 4 yrs or so in UHAL."
  
  
• chrismichael1 puts some context around the stock's sell-off, advising that: "A bad quarterly sent this stock plummeting," and musing that "the demand for U-Haul moving trucks has probably declined as a result of the weak housing market." Still, "demand for storage remains strong, and as housing picks up over the next two years this company should benefit nicely." Agreed.
  
  
• Finally, the ever-laconic racoveanul gives us a few numbers to ponder, specifically: "Good fundamentals (p/b<5,p/s<1,roe>15,fp/e<15)." To which I'd add that as of today, the price-to-book is actually less than 2, price-to-sales less than 0.7, and trailing P/E is less than 15. (From a cash profits perspective, however, free cash flow runs negative and has done so for years -- so tread carefully. Even a brand-name business needs to generate cash profits if it's going to reward an investor.)

So there you have it. You've heard what I think of AMERCO. You've heard from our CAPS players. But what do you think? Log on to CAPS now, and tell us whether this U-Haul is loaded with potential profit, or running on empty. And while you're at it, drop us a note or three on the other companies listed above.

Motley Fool CAPS: It's fun, it's free, and it just might make you famous.

Fool contributor Rich Smith is no fan of moving, but he loves the view from way up in the cab of a U-Haul truck. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 34 out of more than 23,000 raters. He does not own shares of any company named above. Vertex Pharmaceuticals is a Motley Fool Rule Breakers pick. The Fool has a disclosure policy.