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: Scientific Games (Nasdaq: SGMS) shares dropped 10% after the company announced earnings.

So what: The lottery was unkind as the company lost contracts and customers traded down to lower-margin products. Revenue fell 7.6% to $221.1 million, but net income tumbled 56% to $6.6 million or $0.07 per share.

Now what: Scientific Games has a history of underperforming expectations, and this quarter was no different. I don't see a reason to buy the shares given the loss of contracts, low margins, and history of underperformance. You could try to scratch off a few more shares, but don't be surprised if the results are just as disappointing as the last year for this stock.

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