"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.

Before 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 picks, we'll check them against the collective intelligence of Motley Fool CAPS.

Today's contenders include:


Recent Price

CAPS Rating (5 max):

Exide Technologies (NASDAQ:XIDE)



Mosaic (NYSE:MOS)



Wachovia (NYSE:WB)






Hartford Financial



Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money on the Saturday following close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

I'll say one thing for this market -- fear is in no short supply. But greedy investors are becoming as rare as bidding wars on new homes. Why, I suspect I can count them on the fingers of one hand:

  • There's Warren Buffett, who recently dined on $5 billion worth of Goldman Sachs (NYSE:GS) stock, then ordered up a few billions worth of General Electric (NYSE:GE) preferred shares for dessert. Oh, and he's swallowing Constellation Energy (NYSE:CEG) whole. So I guess it's true: Fools (or at least those whom Fools admire) really do rush in where angels fear to tread.
  • There's me, of course -- I've been buying new "red" tickers all week long.
  • And with all the bargains popping up, perhaps you're feeling a bit greedy yourself?

If so, let me introduce you to this week's most loathed (by Wall Street), yet most loved (by Fools) stock. Exide Technologies is the name, and batteries are the game.

The bull case for Exide Technologies
According to Terok1313, Exide aims to maintain its advantage. As Terok wrote in May of this year: 

Global energy demand has been increasing rapidly in recent years, and there's really no end in sight. Meanwhile, the world is becoming more and more mobile, with cell-phones, ipods, and laptops everywhere. Enter the quest for the more perfect battery. They need to last longer, weigh less, and power everything from your camera to your car. Lead is too heavy and oil (gasoline) is too expensive. I believe [Exide] has the technology and the positioning to profit from the need for next-gen batteries.

PhillyDan agrees, in a comment penned in June: "Exide is well positioned to become one of the leaders in developing and producing very cost effective and energy efficient batteries for hybrids and full-on electric cars.... Wouldn't surprise me to see them enter into the Solar business as well in the next two years."

So Exide's got good technology now, and new technology that may be even better on the way. But what about the price? For all its potential, is Exide worth owning today?

Call me a crazy optimist, but I think it just might be. For years, Exide has been plagued by that curse of so many tech companies: free cash flow that ranges from minimal to nonexistent. But that looks set to change.

For two (fiscal) years running, Exide has generated positive operating cash flow -- which was quickly eaten up by capital expenditures. The last two quarters, however, Exide not only generated positive operating cash flow, but kept its capex to a minimum, resulting in free cash flow that has surged past $105 million for the past six months. If they continue that way, free cash flow could work out to as much as $210 million, which would give this stock a price-to-FCF ratio (using the current price) in the low single digits.

Time to chime in
If Exide can churn out cash in the teeth of a recession, this stock could turn into a real long-term winner. (That's a big if for a company that so recently emerged from Chapter 11, and only just turned FCF-positive.) Will it?

Hey! That's not a rhetorical question. At the Fool, we want to know what you think, too. Click on over to CAPS now and tell us what you think about Exide.

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

On Oct. 7, 2008, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

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. 1256 out of more than 115,000 players. Constellation Energy is a former Motley Fool Income Investor recommendation. The Motley Fool's disclosure policy wishes it had a few of Buffett's billions to take advantage of some of the bargains out there today.