"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 max):

Matthews International  (NASDAQ:MATW)



Nasdaq OMX Group  (NASDAQ:NDAQ)



Paragon Shipping  (NASDAQ:PRGN)



Compass Minerals  (NYSE:CMP)



Integral Systems  (NASDAQ:ISYS)



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.

I admit it, Fools. As an investor and a subscriber to Motley Fool Inside Value, I'd like nothing more than to tell you that the best stock on this list is Nasdaq OMX Group (an Inside Value recommendation). But I can't.

After reviewing the numbers, "the Naz" looks woefully overpriced to me. In fact, after reviewing all the stocks on this list -- stocks that one and all, Fools generally believe have come down into value territory -- I find only one that I like. It is the only five-star stock on the list, which I guess helps to demonstrate the value of CAPS: It helps us as investors to look beyond the sexy names and focus on stocks that offer the best bang for the buck. And this week, the stock that fits the bill is ...

Matthews International
Matthews International is about as far from "sexy stocks" as you can get. If Nasdaq's advertising tag line is "Possibilities," then I suppose Matthews' should be "Probabilities" -- as in, it's more probable than not that you're going to die some day. And once you do, there's a fair chance that your survivors will turn to Matthews to buy you a casket, inscribe a headstone for your grave -- maybe, if you're really popular, build you a mausoleum.

Depressing thought? Perhaps it is, if you're the guest of honor at the funeral. But listen to what some of the best investors on CAPS are saying about the company:

  • CAPS All-Star shop1 introduced us to this company early last year as "an international company that consists of multiple divisions. It's largest division makes and sells funeral related items such as bronze memorials, urns, crypt letters and other funeral related products. Their [casket] division is the largest producer of caskets in the US. ... Regardless of whether there is an economic downturn, there is always a need for funeral related items and with the aging population, the funeral industry is expected to experience higher demand for its services. This company has increased its net income, revenue growth and EPS over last year. In addition, the company continues to expand globally, recently acquiring a majority stake in a leading European pre-[press] & graphic services company."
  • All-Star udflyerz calls Matthews a "[q]uality company in one of those boring and unspoken of industries with favorable demographics and limited competition."
  • And All-Star Roto1177 makes the painfully blunt observation: "People keep dying."

And at the risk of sounding ghoulish, the more people die, the more money Matthews makes. The company generated nearly $80 million in free cash flow last year -- more money than it reported as net income under GAAP. It's expected to keep on growing, recession-in and recession-out, at an annual rate of about 12.5% per year over the next five years.

With a P/E that sits at 12, the stock seems fairly priced, but looks pricier when using an enterprise value-to-free cash flow multiple (14 times). Still, considering that the industry is immune to a recession, the stock may even deserve a higher multiple based on the assurance that customers will keep lining up (while lying down) from here to eternity. In times like these, there's something to be said for such a dependable business.

Time to chime in
That said, the aim of this column isn't just to tell you what I think about Matthews International -- or even what my fellow CAPS players are saying. What we'd really like to know is what you think about the company. Do you find its price irresistible? Or will you throw caution (and valuation) to the wind, and invest rather in Nasdaq OMX Group -- or NYSE Euronext (NYSE:NYX) or even CME (NASDAQ:CME), the parent of the Chicago Mercantile Exchange , on sex appeal alone?

Whatever your investing pleasure, at Motley Fool CAPS, we've got a place for you to make your point.

Nasdaq OMX Group is an Inside Value recommendation. NYSE Euronext is a Rule Breakers selection. The Fool owns shares of and options on Nasdaq OMX Group.

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 was recently ranked No. 303 out of more than 130,000 members. The Fool has a disclosure policy.