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: Perfect World (Nasdaq: PWRD) shares dropped 16% today after the company released earnings.

So what: Revenues were up 10.8% to $98.4 million and net income was $31.9 million or $0.60 per duluted ADS. Both results beat expectations, but a weak guidance left investors wanting more.

Now what: Two downgrades from Citigroup (NYSE: C) and Credit Suisse will probably drag on the stock as analysts become wary of Perfect World's future. Maybe that's why our Rule Breakers team changed Perfect World to a sell a couple of weeks ago. For today I'm going to stay away from this stock, but a further pullback could get my attention in coming weeks.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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