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 manufacturer Energy Recovery (NASDAQ:ERII) dropped 15% today after the company reported earnings.

So what: Revenue fell 53%, to $4.9 million last quarter, and the company lost $3.9 million, or $0.08 per share. Analysts were only expecting a $0.02 per share loss, and investors have to be concerned about falling revenue. 

Now what: Management said that about $5 million of product shipped in the first week in October, too late to be included in third-quarter revenue. The good news is that these larger shipments this quarter have allowed them to keep full-year guidance constant. With that said, shares trade at about 5.5 times this year's revenue estimates, which is simply too expensive for me to consider, even if next quarter sales will pick up.