These three companies just didn't live up to Mr. Market's expectations last week. Sometimes, an earnings stumble is a signal to sell. But digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down.

Today, we're moving from the American suburbs to Chinese hospitals, with a pit stop in the Futureland of television. All aboard!

The usual suspects
Let's get this week's disappointing homebuilder out of the way first, shall we? Hovnanian Enterprises (NYSE:HOV) was one of the nation's largest builders once upon a time, but fellow Fool contributor Chris Jones now sees the company teetering on the edge of oblivion.

It's not hard to see why. Analysts already expected the company to do badly, but its actual loss of $2.16 per share came in much worse than those lowered expectations. With only $545 million of unrestricted cash and equivalents on hand, $1.8 billion in long-term debt, and losses that never seem to end, Hovnanian is wading in hip-deep dung right now.

Hovnanian is not the only builder with excessive debt, nor is its debt load the heaviest among its peers. But the heavier financial burdens fall on the really big boys, like Lennar (NYSE:LEN) and Pulte Homes (NYSE:PHM). Though all of those giants are reporting scads of losses, their debt-to-capital ratios are sitting in the 50% range. Hovnanian's tops 100%. In other words, if push came to shove, Lennar or Pulte could raise cash with a fire sale on unsold inventory if creditors came banging on the door with angry faces and loaded shotguns. Hovnanian, on the other hand, couldn't pay its debts even if the company liquidated all its assets at their book value.

I'm all for turnarounds, the end of the housing bust, and all that jazz. But things are looking grim for Hovnanian, and any investment here would be more like a desperate gambler's last all-in bet. Consider yourself warned.

SeaChange we can believe in
Next up on our hit list (miss list?) is video services expert SeaChange International (NASDAQ:SEAC), which was supposed to show a $0.06 profit per share, but slipped to a $0.01 loss per share instead.

A weak market for TV advertising hurt SeaChange's bottom line, but management also reported several important wins. Comcast (NASDAQ:CMCSA) extended its contract for video-on-demand software during the quarter. Also, SeaChange signed another member of the "five largest cable television providers in the U.S.," and six smaller deals were inked.

All told, management expects a return to profitability in the second half of 2009. The balance sheet is squeaky clean, with a small but growing cash position and no significant debt. One concern, though, is that much of SeaChange's business depends on factors way beyond management's control, such as infrastructure budgets at the major cable broadcasting providers, and the strength of the advertising market.

Still, I remain convinced that video on demand is the future of television -- and SeaChange is a market leader in this unstoppable sector. The fuse has not yet been lit under the VOD market's inevitable takeoff, so it's not too late to jump aboard the bandwagon.

Diagnosis: healthy
Last but not least is medical device maker China Medical Technologies (NASDAQ:CMED). The Chinese population is growing old, much like our own Baby Boomers. This places China Medical in a potentially lucrative position, as demand for its medical diagnostics and monitoring tools increases along with the larger Chinese economy.

This quarter, though, the aging process wasn't fast enough. Even after adjusting for non-GAAP expenses, adjusted earnings landed at $0.40 per American Depositary Share (ADS), short of the $0.43 consensus target. Still, China Medical is a profitable business with a very large market in front of it. In that respect, it's kind of like a smaller, Chinese version of longtime Rule Breaker Intuitive Surgical (NASDAQ:ISRG).

And China Medical has the Motley Fool CAPS chops of a possible winner -- five-star CAPS stocks have historically beaten the market senseless. Your fellow investors see something special in China Medical, including all-star CAPS member Mikenrobin, who sees "much opportunity to profit now and in the future" thanks to a niche market with strong growth prospects.

The lesson to take from these three companies is that some underperformers are victims of larger circumstances, while others might have only themselves to blame. By looking closely at each one, you can decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which ones are stuck in the mud for real.