"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:


Recent Price

CAPS Rating
(5 stars max.)

Navigant Consulting  (NYSE:NCI)



YRC Worldwide  (NASDAQ:YRCW)



Take-Two Interactive  (NASDAQ:TTWO)



Huntsman  (NYSE:HUN)






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.

Professional investors are unloading these stocks as fast as they can, yet CAPS members seem to be taking more of a wait-and-see attitude. Most of these companies still get modest three-star ratings, with only housing-industry-hobbled MBIA being roundly panned.

Meanwhile, up at the top of the list sits Navigant Consulting, and this one, we like. Why? Well, let's find out:

The bull case for Navigant Consulting
Back in August craniusmaximus laid out the bull case thusly:

The number of lawsuits, arbitrations, criminal charges, and/or other disputes grows inversely with the economy. Additionally ... when the economy is going poorly, the gov't tends to enact new regulatory measures to try to mitigate the damage caused by the contraction / recession / depression. When this happens ... companies (and often their attorneys) turn to [Navigant Consulting] for help. The perks during economic downturns are all in addition to the constant inflow of business that they already enjoy from litigations (attorneys paying them to get [Navigant]'s forensic accountants to help them figure out their defense or prosecution in any type criminal/civil matter) and other niches in which [Navigant] operates successfully ...

Speaking of lawsuits, barryaltmark noted earlier this year that: "Sub Prime Mortage Fiasco-Related litigation [is] just at the beginning." Meanwhile, CAPS All-Star chronicallyill22 agreed back in September that "financial Consulting will be needed with all the new bailouts and regulations and rules that will be coming into play."

All of which suggests that an economy which many analysts consider less than robust could actually serve Navigant quite well. But that's not to say the company was struggling before the economy turned south. To the contrary, sales growth has averaged 22% per year over the past five years, with earnings growing at nearly 18% annualized.

Going forward, analysts expect 16% long-term growth from Navigant. And while that may not look like enough to justify the stock's 21 P/E, a peek behind the GAAP numbers suggests that there's more to this company than meets the eye -- specifically, free cash flow (FCF). FCF at Navigant outweighs its reported "net earnings" by a factor of two. As a result, the company's boasting a price-to-free cash flow ratio of less than 10 right now.

Time to chime in
Does this sound like a cheap stock to you? (It does to me.) Before you hit the "buy" button, consider that right alongside Navigant lie two competitors CAPS members find equally attractive -- Resources Connection (NASDAQ:RECN) and Huron Consulting (NASDAQ:HURN). Each has grown faster than Navigant in recent years. Huron in particular also boasts a higher profit margin, while Resources Connection has a lower P/E.

Which of the three looks best? Cast your vote for:

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. 751 out of more than 125,000 members.

YRC Worldwide is a Motley Fool Hidden Gems PayDirt selection. Take-Two Interactive is a Rule Breakers pick. Resources Connection is a Stock Advisor recommendation. The Motley Fool has a disclosure policy.