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 Chinese diesel engine manufacturer China Yuchai International (NYSE: CYD) were stalling out today, losing as much as 16% in intraday trading after the company reported first-quarter results.

So what: According to Standard & Poor's Capital IQ, analysts were expecting a year-over-year dip for China Yuchai, but not quite as big of a dip as the company ended up reporting. For the first quarter, the company notched $0.94 in earnings per share on revenue of $646 million. Analysts were looking for EPS of $1.29 on revenue of $661 million. The weakness was driven by softening demand for auto engines as total diesel engines sold dropped to 160,831 from 195,017 a year ago.

Now what: Considering that China Yuchai's stock is currently trading at roughly five times expected 2011 earnings, it seems as if investors may be lumping it in with a host of other Chinese small caps that investors fear are using some financial shenanigans. Of course at a nearly $1 billion market cap, the stock is a borderline small cap and the company did not hit the public markets through a reverse merger -- the vehicle of choice for the most worrisome companies. It could also be that investors are concerned that the sudden ramp in profitability over the past few years simply won't stick. But whatever the case, the stock appears to be pretty cheap right now and may be worth a closer look from investors willing to take on a bit more risk.

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