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 hydraulic valve and manifold maker Sun Hydraulics (Nasdaq: SNHY) sank 10% in late trading today on a Wall Street downgrade and general market malaise.

So what: The double-digit plunge comes just one day after the shares surged 10% on better-than-expected quarterly earnings. Although Wall Street firm Robert W. Baird admitted that the results were indeed exceptional, Sun Hydraulics' seemingly rich valuation prompted them to cut their rating on the stock to neutral from outperform.

Now what: I wouldn't look too much into the downgrade. While Sun Hydraulics' 35-plus P/E doesn't exactly look cheap, its competitive position and long-term growth prospects are certainly solid enough to consider paying up for. Yesterday, my fellow Fool Travis Hoium wrote that Sun Hydraulics' strong quarter doesn't look like a "one-time event," and today's stock price weakness shouldn't do anything to change that.

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