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What: Shares of InvenSense (NYSE:INVN) fell 22.1% in August, according to data from S&P Capital IQ. The month started off with a strong first-quarter report paired with weak forward guidance. From there on, InvenSense shares performed a slightly amplified version of the general market's China-based jitters.

So what: In the first quarter of fiscal year 2016, InvenSense saw sales jumping 59% higher year over year to land at $106.3 million. Adjusted earnings rose 17% to $0.14 per diluted share. Your average Wall Street analyst had expected the maker of motion sensors and sound processors to stop at earnings of $0.12 per share on $102.4 million in top-line sales.

Looking ahead, however, management set second-quarter guidance targets well below the prevalent analyst views. In the earnings call, InvenSense CFO Mark Dentinger tied those soft next-quarter goals with uncertainty about the smartphone market in China. You've seen the markets doing the Chinese limbo ever since, and InvenSense's shares have essentially just exaggerated those moves.

Now what: I can't blame InvenSense investors for keeping a very close eye on developments in China. Here's how Dentinger put it:

We are a little concerned with the macro issues that we are hearing about -- some of it is China growth and some of the consumer sentiment coming out of the United States. So we're trying to factor that into the overall guidance that we put together.

Of course, he then went on to explain that China represents a "pretty sound and solid growth story," even at the low end of the trends on the table. InvenSense increased its Chinese sales 22% year over year in the first quarter, and Dentinger sees margins expanding in this market toward the end of the year.

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.

Investors and market movers largely ignored that bit, as they have over the last year or so. InvenSense shares have plunged 62% lower in 52 weeks, while sales soared 59% higher and negative free cash flows turned positive. The company sits on more cash than debt, and the stock trades for less than 14 times forward earnings estimates.

The small-cap stock is as jumpy as its quarterly results are lumpy, but all things considered, we're talking about a healthy business with clearly defined high-growth target markets. I think that InvenSense's best days still lie ahead. And if you agree with my view, there's never been a better time to snatch up a few InvenSense shares at very attractive prices.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.