Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of China-based online game developer Perfect World (Nasdaq: PWRD) don't look perfect today after falling as much as 14.4% amid heavy trading.

So what: Perfect World's third quarter missed analyst estimates, even though rivals from Shanda Games (Nasdaq: GAME) to Giant Interactive (NYSE: GA) easily beat their Street targets. Making matters worse, Perfect World only just met its own revenue guidance -- after lowering it mid-quarter.

Now what: "Quarterly fluctuation is a natural part of our product cycle," says CEO Michael Chi. That's true enough, and the lumps get even more jarring when you consider Perfect World's small-cap scale. But profit margins are on the decline, and sales growth appears to have hit a modest plateau even if you calculate these metrics over a trailing-12-month period to smooth out the short-term bumps. Online games in China may be a hot sector, but Perfect World doesn't look like the best pick in the industry. Our Rule Breakers team has some stronger ideas for this market -- just grab a totally free 30-day trial pass to see what they are.

Interested in more info about Perfect World? Click here to add it to My Watchlist.