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 value-oriented teen retailer Rue21 (Nasdaq: RUE) surged 16% on Friday after its quarterly results and full-year outlook topped Wall Street expectations.

So what: Driven by an impressive 26% jump in revenue and widening margins, the company posted a first-quarter profit of $9.6 million, or $0.38 per share, versus the average analyst estimate of just $0.30 per share. Rue21 has been succeeding at the expense of gorilla discounters like Wal-Mart (NYSE: WMT) and TJX Companies (NYSE: TJX) in recent months, and judging from the share price action, Mr. Market expects its affordable, yet fashionable, offerings to continue to grow in popularity.

Now what: Management now expects full-year earnings per share of between $1.50 and $1.54, handily topping analyst forecasts of $1.21. So even with today's big rally, Rue21 shares are trading at a reasonable -- given its strong operating momentum -- 20 times the midpoint of that range. When you couple that decent forward valuation with a cash-rich, debtless balance sheet, Rue21 is at least worth checking out.

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