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 back-office operations outsourcer ExlService Holdings (Nasdaq: EXLS) got whomped Tuesday,  down 10% at one point before closing the day just shy of an 8% loss.

So what: And no wonder. The company announced it's doing a 4 million-share follow-on offering -- with insider sales constituting 3 million of the shares up for sale.

Now what: Sounds scary, huh? Insiders are dumping their shares, abandoning ship -- why shouldn't you feel in panic, too? Well, here's why: Insiders at this company currently own nearly 50% of the shares outstanding -- 15 million or thereabouts. Subtract 3 million from that tally, and they still own nearly 40% of the company. Does that sound like they're going to have no desire to see ExlService succeed, post-offering? Does it sound like they're really cashing out and leaving outside shareholders holding the bag?

It doesn't look that way to me. Moreover, with ExlService shares now selling for just 21 times earnings, and pegged for better than 18% long-term earnings growth by Wall Street, the shares are pretty close to fair value today -- meaning even if insiders are moving cautiously for the exits, you might want to start consider entering this stock.

Want to find out more about ExlService. Add it to your watchlist.

Fool contributor Rich Smith does not own (or short) shares of any company named above.

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