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 retail drugstore operator China Nepstar Chain Drugstore (NYSE: NPD) sank as much as 11% in early trading today after Goldman Sachs (NYSE: GS) downgraded the stock from neutral to sell.

So what: Goldman's bearish opinion comes on the heels of China Nepstar's disappointing results last week, in which rising operating costs bruised the bottom line. Particularly, Goldman sees a tough operating environment ahead for Chinese retail pharmacies now that the 15% drug mark-up added by hospitals has been eliminated.

Now what: I wouldn't be so quick to pounce on today's plunge. While China Nepstar's growth prospects might be enticing, rising costs and a potentially weakened competitive position are risks that this Fool just isn't willing to take on. Of course, with China Nepstar trading at a clear P/E premium to U.S.-based pharmacies Walgreen (NYSE: WAG) and CVS Caremark (NYSE: CVS), the decision to stay away is that much easier.

Interested in more info on China Nepstar? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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