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 auto retailer AutoNation (NYSE: AN) raced up as much as 12% in intraday trading after the company reported fourth-quarter results.

So what: During earnings season, it's all about expectations. Beat expectations and you're a hero; miss them and you'll be buried in a sell-off. So it should be no surprise to hear that AutoNation's fourth-quarter earnings solidly beat Wall Street's expectations. On a continuing-operations basis, earnings per share climbed 55% year over year, from $0.29 to $0.45. Analysts were looking for just $0.36. Revenue of $3.2 billion also topped the average estimate of $3.1 billion.

Now what: While the company didn't provide specific guidance for 2011, it did express optimism about the state of the industry -- particularly when it comes to the domestic auto manufacturers. That optimism shouldn't be too shocking, since sales of domestic brands -- which include Ford (NYSE: F), General Motors (NYSE: GM), and Chrysler -- climbed 22% in the fourth quarter, and were up 40% year over year for the month of January.

After a torrid performance in 2010, in which shares climbed nearly 50%, AutoNation's stock trades at more than 17 times estimated 2011 profit per share. While that's not crazy-expensive, investors eyeing the stock right now may want to wait for a better price.

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