The Contrarian Shopping List

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

Out of the quadrillions of quotations quarried from that most loquacious of quotationists, this one holds a special place in Foolish investors' hearts. Are you looking to "buy low" so as to later "sell high?" If so, your best chance of getting that initial low entry price comes when panicked sellers are unloading their shares at whatever price is on offer.

In today's column, we search the ranks of Wall Street's motivated sellers, and note which stocks they're most frantic to unload. Therein may lie the makings of a contrarian investor's shopping list. But don't just take my word for it. Before you decide to go in through Wall Street's out door, check your thinking against the collective intelligence of Motley Fool CAPS investors.

Today's contenders include:

The problem with pessimism
The problem with going against the grain on Wall Street? When professional traders get pessimistic, their grim outlook can become a self-fulfilling prophecy -- at least in the short term. The more desperate institutions become to abandon a stock, the lower the price they'll accept to get rid of it. And as their "ask" prices drop, the "bid" prices of buyers will fall in tandem, creating the very price decline that they feared in the first place.

Until the selling stops.

In through the out door
When it will stop is anybody's guess. But until it does, savvy investors have a chance to "get greedy" and snap up some bargains from these fearful sellers (if bargains they truly be). Which of the above seven stocks fits the bill? In today's list, Main Street by and large agrees with Wall Street on these companies' prospects -- except in one instance, that of the poetically named Nighthawk Radiology.

It's perhaps surprising to see CAPS investors bestowing four stars on a Wall Street pariah. Then again, it's surprising to see Wall Street so pessimistic about a groundbreaking business model like Nighthawk's, which plays directly into the outsourcing/offshoring trend by hiring radiologists in Australia and Switzerland to examine X-rays taken at "night" in the U.S.

Reviewing the company's CAPS page, we see that 86 out of 89 investors who have rated the company -- including every single one of two dozen CAPS All-Stars -- think it will outperform the S&P. Here's what a couple of the best investors in CAPS-land are saying about Nighthawk:

• When it comes to knowledge, "secondhand" is the next best thing to "firsthand." That's what we get from ikkyu2, who writes: "One of the smartest guys I know moved to Australia in 2002 or thereabouts to be a Nighthawk radiologist; another one of the smartest guys I know did a lot of work on their IT back end. The business model's new and clever; medical imaging is a field growing by leaps and bounds; and every hospital wants good imaging interpretation available at night."
  
  
• Rule-breaking Fool analyst TMFBreakerRick agrees, asking: "It's 3am, do you know where your certified radiologist [is]? NightHawk removes the worry by sending that work out to wide awake board-certified radiologists in Australia and Switzerland. It's cheaper. It's immediate. It's just what hospitals need to save costs and for pained patients to save time in getting diagnosed and treated."

Of course, not everyone is a fan. Presumably in reply to Rick's pitch, venaca asks: "It's three am and do you know how many of your emergency scans are reimbursed? I do and once the hospital and radiology groups ascertain this loss leader the only loser will be NHWK which with its cash on the barrel payment philosophy is great except now they can't make a buck in net profits."

Time to sound off
So which is it: Is Nighthawk an idea whose time has come? Or does the lack of "net profits" make Nighthawk a lame duck? Whatever your position, at CAPS, you've got a chance to make yourself heard, and help your fellow investors in the process.

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 46 out of more than 24,000 raters.