"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 include:

Stock

Recently Fetching

CAPS Rating (5 max):

Obagi Medical Products (Nasdaq: OMPI)

$7.00

****

Crocs  (Nasdaq: CROX)

$10.22

**

East West Bancorp  (Nasdaq: EWBC)

$13.97

**

First Horizon National  (NYSE: FHN)

$13.06

**

Affymetrix  (Nasdaq: AFFX)

$11.16

**

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 pricing also provided by MSN Money on the same date. CAPS ratings from Motley Fool CAPS.

Of these five, CAPS players rate just one above average. Plastic shoes, it appears, no longer qualify as haute couture in their books. Nor are they impressed with banks, or, um, DNA analysis. But skin care? Now that's exciting. Let's learn a bit more about the maker of "prescription-based, topical skin health system" Nu-Derm as we examine...

The bull case for Obagi Medical Products
We'll start off with a quick overview of the business, courtesy of NetscribeBiotech a year ago:

Obagi Medical Products ... is a specialty pharmaceutical company focused on the aesthetic and therapeutic skin health markets. The Company develops and commercializes prescription-based, topical skin health systems that enable physicians to treat a range of skin conditions, including pre-mature aging, photo-damage, hyper pigmentation, acne and soft tissue deficits, such as fine lines and wrinkles. ... Obagi is the leader in the physician-dispensed skin care channel. Physician-dispensed skin care market is somewhat concentrated with top four players cornering 65% market share.

Let's not underestimate the competition here, folks. According to its own filings, Obagi's rivals for market share include none other than heavyweights Johnson & Johnson (NYSE: JNJ) and Procter & Gamble (NYSE: PG).

One of the great things about CAPS is that with 97,000 investors (and counting), we're bound to have a few contributors who can offer firsthand -- or at least secondhand -- experience with the companies they're describing. In Obagi's case, we're pleased to report that two such investors have chimed in with their thoughts.

First up, ColoHunter78, who volunteered back in August that:

My wife has been using the NuDerm product and is quite satisfied with the results. The Doctors office seems to be trained quite well to sale/explain these product lines. All competitors in this industry are posting solid earnings.

runriverrun7 also has a story to tell:

I asked my physician girlfriend about Obagi; she said 'Haven't you seen my medicine cabinet? It's full of their products.' She's been using these products for years and is a loyal customer. Makes me think this is the type of product that people become very loyal to because of its results.

Testimonials aside, though, what do Obagi's numbers look like? Actually, not half bad. The stock sells for a mere 10 times trailing earnings. That looks awfully cheap, since the half-dozen analysts tracking this stock predict that it will grow those earnings at about 25% per year over the next half-decade.

And while it's true that Obagi's free cash flow doesn't entirely back up its reported net earnings under GAAP, they're not materially off. Last year, the company generated $13.7 million in cold, hard, free cash. Against the firm's small-cap market valuation, that only pushes the price-to-free cash flow ratio up to 11.6 -- which, I repeat, looks awfully cheap. What you consider that the company is cash-rich and carries almost no debt, I think Obagi makes the grade as a sound contrarian pick.

Time to chime in
Of course, this column isn't just designed to tell you what I think about Obagi Medical Products -- or even what other CAPS players are saying. We really want to hear your thoughts. Click on over to Motley Fool CAPS and tell us what you think.

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

First Horizon and J&J are both recommendations from Income Investor. Affymetrix is a choice at Rule Breakers. Try any Fool newsletter 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 currently ranked No. 1,382 out of more than 97,000 players. The Fool has a disclosure policy.