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: Today's shaping up to be a perfectly miserable day for the stock market -- and an utter disaster for Alere (NYSE: ALR) investors. In the wake of earnings, shares of the medical device maker are down 12% and counting.

So what: Alere lost $0.10 per share last quarter. Disregard one-time charges, and the adjusted profit would have been $0.46 -- but even that number would have fallen $0.13 short of Wall Street' projections.

Now what: It wasn't all bad news. For example, $0.10 was less than Alere lost in last year's Q2. Revenues were actually up 8%. And the company claims to have generated "adjusted" free cash flow of $32.7 million. Considering that Alere generated real free cash flow in the neighborhood of $180 million or so the past two years, $32.7 million seems a bit light to me.

More importantly, even if Alere manages to pull out of its dive and produce, say, $180 million again this year, the resulting price-to-free-cash-flow ratio on the stock would still only be 14 -- no better than the fair price based on consensus growth estimates for Alere that hovers around 14%. Between the risk that Alere doesn't make that number and the fact that the company's still loaded down with more than $2 billion net debt, I have to admit I'm not optimistic about the stock.

My advice: Just because the knife is falling, doesn't mean you have to reach out and try to grab it.

Disagree? Think Alere's alluring at today's lower stock price? Add it to your Watchlist -- who knows? Maybe Rich is wrong about this one.

Fool contributor Rich Smith does not own (or short) shares of Alere. The Motley Fool has a disclosure policy. Motley Fool newsletter services have recommended writing naked calls in Office Depot. Motley Fool newsletter services have also recommended shorting Office Depot. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.