"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett

Of the Oracle of Omaha's many aphorisms, this one holds a special place in Foolish investors' hearts. When you're 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. When desperate institutions lower their asking prices to get rid of a stock, buyers' bid prices to fall in tandem, to create the very price decline that both sides feared in the first place -- until the selling stops.

Until it does, savvy investors can "get greedy" and grab 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 include:

Currently
Fetching

CAPS
Rating

Mahanagar Telephone Nigam (NYSE: MTE)

$6.56

*****

Cypress  Semiconductor  (NYSE: CY)

$22.38

****

Global Sources  (Nasdaq: GSOL)

$15.06

****

Ascent Solar  (Nasdaq: ASTI)

$15.13

**

Zoran

$12.69

**

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 on the same date.

So we have three contenders here this week: Mahanagar Telephone, Cypress Semi, and Global Sources -- an abundance of riches, a plethora of choices. Fortunately, New Delhi-based phone company Mahanagar Telephone Nigam Limited (MTNL) makes the choosing easy for us by presenting itself as the sole five-star stock on the list. Let's find out why that is.

The bull case for MTNL
The best writeup I've seen on MTNL comes from CAPS All-Star Hibachi0, who wrote last July:

India's cellular industry will (and is) becoming huge, however, MTE has only 2.5 million subscribers and derives most of its revenue from fixed land lines. I still like them though, although I give the nod to [Vodafone (NYSE: VOD)] (owner of essar, biggest cell phone company in India) as a more likely play. Given [China Mobile's (NYSE: CHL)] valuation of 220 billion at 430mm subscribers, the cell phone industry in India is a 600 billion market.

In the worst-case scenario, inflectionpoint argued last November that MTNL should "grow at [the Indian] economy's rate despite the government involvement." That growth, by the way, was close to 10% last year.

And if you're curious what inflectionpoint refers to when warning of "government involvement," check out what "Indian outsourcer" Infosys (Nasdaq: INFY) CFO had to say on that point in our recent interview with the CFO.

I'm choosing our last CAPS pitch selection less for its insight and more to show off that I know what "pwn" means. Scooby-Doo-ish monikered CAPS player ralree likes MTNL because: "India's cellular industry is going to explode (and already sort of has). This stock is gonna pwn." (Translation from gamer-speak: "Own." As in "dominate." See how hip I am to the young'uns' palaver?)

Perhaps the most interesting factoid about MTNL, though, relates to inflectionpoint's suggestion that the company will at worst pace the Indian economy's 10% rate of GDP growth. As it turns out, that's precisely the rate of growth that analysts project for the company.

On the surface, that makes the stock attractive. Trading for just seven times trailing profits, and expected to grow those profits at 10%, this stock carries a good-looking PEG ratio of just 0.7. Unfortunately, the company generates significantly less free cash flow than its GAAP numbers suggest. Working from the most recent numbers we've got, we see that for the fiscal year that ended in March 2007, MTNL generated less than $23 million in free cash flow over the year -- just 9% of its net earnings.

To me, that alone is a risk -- over and above the risk a U.S. investor takes investing in a foreign market, where knowledge of the investing environment and associated risks is necessarily tenuous. And for this reason, I have to break with the CAPS consensus on this one. MTNL may be a contrarian pick, but it's not a Foolish one. The margin of safety just plain isn't big enough for me.

Disagree? Feel free. Come on over to CAPS, and make your case that MTNL is a buy.

Looking for safer plays on the astounding growth of the Indian market? Try the Fool's new international investing newsletter, Motley Fool Global Gains, free for 30 days.

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  ranked No. 399 out of more than 83,000 players. The Fool has a disclosure policy.