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

Today's contenders include:

Stock

Recent Price

CAPS Rating
(out of 5)

Value Line (NASDAQ:VALU)

$27.22

*****

AIG (NYSE:AIG)

$30.17

*

Crocs  (NASDAQ:CROX)

$5.43

*

Protalix BioTherapeutics (NYSE:PLX)

$8.20

*

BioCryst Pharmaceuticals (NASDAQ:BCRX)

$7.05

*

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.

Wall Street vs. Main Street
Up on Wall Street, traders are searching frantically for someone to take these stocks off their hands. Down here on Main Street, though the reply's a near-unanimous: "Keep looking." CAPS members aren't interested in loading up on Wall Street's rejects ... well, except in one instance.

The bull case for Value Line
 GrahamJervis, for instance, looked at Value Line back in April and wondered, what's not to like? "[N]o debt, great return on equity and well managed." A couple years earlier, SirKnight1775 had recommended the stock on the reasoning that "Value Line plays a major part in my investment research." (Remember what Peter Lynch told us: Buy what you know.) More recently, aordinaryguy looked at Value Line and saw "a VALUe play, (pun intended)."

Judging from the stock's five-star rating, a lot of people are thinking along these lines. And can you blame them? Value Line is one of the best-known and respected investor publications out there. It's not as big an operation as Morningstar (NASDAQ:MORN) or Thomson Reuters (NYSE:TRI), certainly, but its reputation stacks up with the best of 'em. But its business reputation notwithstanding, I have to say that Value Line the investment has a few warts:

  • The lack of profit over the last four quarters, and a P/E, for example.
  • The business's years-long decline. Whereas reported profit under GAAP held up pretty well up until recently, we've watched free cash flow drop pretty steadily from its high in 2005.

Now, I'm not saying it's all bad news at Value Line. For example, while it's true that free cash flow hasn't grown on annual basis since 2007, for the time being at least, Value Line is still free cash flow-positive. Nor is the company in debt. To the contrary, Value Line sits on a cash and investments cushion piled $106.5 million high.

Between a lofty cash pile to tide it through tough times, and a cash machine that keeps stacking the pile higher, I don't believe Value Line will go away anytime soon. I just don't think it's going to go anywhere fast -- which means there are probably better places to invest your money today.

Time to chime in
But hey, that's just my opinion. Feel free to disagree. If you think Wall Street's giving Value Line short shrift, and that I'm missing some obvious reasons why the stock is a buy, here's your chance to tell me why. Click over to Motley Fool CAPS now, and drop me a line. A, er, Value line.

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