"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. Once we've compiled this shopping list of potential contrarian picks, we'll check them against the collective intelligence of Motley Fool CAPS.

Today's contenders:

Currently Fetching

CAPS Rating (5 max):

3SBio Inc.  (Nasdaq: SSRX)

$8.35

*****

First Marblehead (NYSE: FMD)

$12.42

****

Constellation Energy Partners 

$19.10

****

Edge Petroleum  (Nasdaq: EPEX)

$4.63

****

Zoltek Companies  (Nasdaq: ZOLT)

$23.61

***

Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money on the Saturday following close of trading last week. Current pricing also provided by MSN Money on the same date. CAPS ratings from Motley Fool CAPS.

Yowza! Don't you just love a broad-based market sell-off? I gotta tell you -- there's just nothing like a market downturn for knocking popular companies down to reasonable prices, as today's list demonstrates.

The "professionals" may be dumping these stocks, but on CAPS, the lower prices just make these companies look more attractive than ever. Only one company on our list gets as little as a three-star rating, and little Chinese biotech 3SBio actually scores the maximum five stars possible on CAPS. Let's find out why.

The bull case for 3SBio Inc.
CAPS All-Star SapphireSeas gives us a short introduction to the company, and one analyst's take on its prospects:

SSRX's main revenue producer is EPIAO, which is used to treat anemia associated with chemotherapy and kidney dialysis. CIBC believes the market for this drug is underserved in China, with much room to grow ... [and predicts that] earnings for 3SBio will quadruple by 2009, with profit of $1.13 per share at that time, up from 27 cents in 2006.

And putting 3SBio into a context that U.S. investors can understand, liuyan notes that the firm has "four products in hand," before asking:

How many biotech firms have that many products here in the US? A very small number of firms such as [Amgen (Nasdaq: AMGN), Genentech (NYSE: DNA), and Gilead Sciences (Nasdaq: GILD)]. The flagship product is a mimic of Amgen's EPO.

For my part, well, I'm not going to even pretend that I understand biotech investing. If you want useful advice on finding the best biotech companies, I'll point you toward my good friends at Motley Fool Rule Breakers, who've taken a close look at the industry and chosen several promising companies.

What I can tell you about 3SBio is that it's one of those rare tiny biotechs that not only earns profits under GAAP, but also generates strong free cash flow. The firm's stock price trades under 16 times trailing earnings, making it seem cheap. Yet some analysts are concerned that growth in Chinese demand for drugs depends on continuing improvement in standards of living and health care -- which is far from a sure thing.

Disagree? Feel free. Come on over to CAPS and tell me why this stock isn't all it's cracked up to be.

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. 613 out of more than 84,000 players. The Fool has a disclosure policy.