5 Stocks to Pounce On After a Big Correction

For many, yesterday's big drop in the stock market was a scary, ominous sign of what might be to come. But long-term investors who have prudently kept money on the sidelines for the next golden opportunity should be overjoyed at the prospect of a market correction -- because it may give you the attractive entry points you've been looking for.

Investing in a straight-up market
Last month, I noted just how hard it is to invest when the market is soaring. The pressure to do something -- anything -- seems to increase every day that you watch share prices go up.

Yet the best thing you can do in those situations is nothing. Nothing, that is, except to plan for the future -- and, more specifically, the inevitable time in the future when the market finally comes down again. If you have a plan in place, then you'll be better prepared when the time comes to take smart, profitable action.

Making a list, checking it twice
One great way to keep your emotions in check as an investor is to make what may seem like unreasonable demands on stocks you're assessing as candidates. By setting your standards higher, you leave yourself open to never getting the deals you want. But when you occasionally do find a stock that meets your criteria -- and it'll happen from time to time, no matter how ridiculous those criteria may be -- it'll give you the best prospects for profits that you could ever ask for.

Today, let's look at five big-growth candidates whose share prices have soared just a little too high lately. If the market's fall yesterday turns into a full-blown correction, then these stocks might suddenly look a lot more attractive.

priceline.com (NAS: PCLN)
Priceline has distinguished itself with its customer-bidding process and its unparalleled ability to negotiate from a position of strength with travel providers. But eventually Priceline will have to slow down. That's why despite strong results, paying 30 times earnings seems expensive. I'd rather "name my own price" on the shares at about a 20% discount, corresponding to its 24% long-term future expected growth rate -- and hope that William Shatner can deliver.

Intuitive Surgical (NAS: ISRG)
Robotic surgery is the wave of the future, and Intuitive Surgical is surfing on its leading edge. But growth for such an expensive item has an inherent speed limit, and paying 30 times forward earnings estimates doesn't match up well with realistic growth projections. Bring that price back down to where shares traded last summer, however -- about 30% lower -- and the company starts looking more attractive again.

Wynn Resorts (NAS: WYNN)
Unlike Priceline and Intuitive Surgical, Wynn Resorts has already seen a nice move down for its share price. If the company is indeed on the cusp of a deal to develop a new property on the Cotai Strip area of Macau, then its current growth projections could go up in a hurry. But even if future growth is 50% faster than currently expected, a 10% cheaper price would go a long way toward building in some margin of safety.

Silver Wheaton (NYS: SLW)
Silver-streamer Silver Wheaton has an enviable business model, with a sweet deal that allows the company to reap the benefits of rising silver prices without the uncertainty and capital demands of actually having to mine for the metal itself. Although this year's run-up in silver prices has made the shares expensive, even returning to beginning-of-2012 levels just under $30 per share would make a much better buying point.

Northern Oil & Gas (ASE: NOG)
The Bakken shale play has huge potential, both for profits and for heartbreaking losses. But Northern is unusual in that it doesn't operate its wells, instead hiring outside operators to work its properties. That has helped the company avoid debt, but it's still vulnerable to falling oil prices or bad luck in its drilling. A correction that pulled the shares down another 10% to 15%, however, would potentially take a lot of the risk out of the stock.

Stick to your guns
Of course, there's no guarantee that yesterday's plunge was anything other than a one-day blip. And even if a bigger correction comes, these stocks might not fall enough to make you comfortable with their value proposition.

But patience is the most important virtue as an investor, and by waiting for the perfect opportunity, you'll maximize your chances for good results. Especially in a high-priced market, you need as many things going for you as you can get.

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At the time thisarticle was published Fool contributor Dan Caplinger doesn't really expect such huge corrections on stocks, but you can always hope. You can follow him on Twitter here. He doesn't own shares of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of priceline.com and Intuitive Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy gets everything correct.

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