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 Energy Recovery, (ERII 0.42%) fell 12% today after reporting earnings.

So what: Revenue was down 39% from a year ago, to $3.0 million, and net loss was $3.7 million, or $0.07 per share. Analysts were expecting a loss of $0.03 per share and revenue of $8.8 million, so results were well short of what investors expected. 

Now what: Analysts were hoping that conditions would improve enough for Energy Recovery to report a small profit this year, and that may now be out the window. For my money, there's simply not enough revenue or earnings to make a bet on the stock because there's too much risk that losses continue. I'm going to sit out this move, and would make the company prove it can make money before jumping in.