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: Some days, it just doesn't pay to be associated with China. Thursday, investors in industries as far afield as luxury retailing, including Coach (NYSE: COH) and Tiffany (NYSE: TIF), saw their stocks crushed. The culprit: worries that China's rising middle class might take a tighter grip on their wallets as manufacturing growth stagnates. Meanwhile, stocks tied more directly into the Chinese economy suffered even worse. Take advertising powerhouse Focus Media (Nasdaq: FMCN) -- down more than 18% in the day's trading.

So what: If worries about a contracting Chinese manufacturing sector hurt Coach and Tiffany, they'd logically hurt the kinds of firms that advertise their products, too. Focus Media is one such company, and it appears to have become a favorite of short sellers betting against the company. According to one source, options trading against the stock Thursday was more than 10 times its usual daily average.

Now what: Pretty scary statistics -- but on the other hand, fear often brings opportunity. In Focus Media, we have a stock trading for 13 times earnings yet expected by many analysts to have five years of 33% annual profits growth ahead of it. What's more, unlike many Chinese firms, Focus has  a strong history of cash production to back up its GAAP numbers. Free cash flow for the past 12 months -- while not quite as robust as Focus' income statement suggests -- was still quite strong at $176 million. Against a $2.8 billion market cap, this makes the stock look very cheap to me.

At these prices, if I were in the market for a Chinese stock with real potential to outperform, I think Focus Media would be near the top of my shopping list.

Are investors overreacting to Middle Kingdom rumor-mongering? Will Focus Media come out on top? Add the stock to your Fool Watchlist, and find out.

Fool contributor Rich Smith owns no shares of any company named above. The Motley Fool owns, and Motley Fool newsletter services have recommended buying, shares of Coach. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.