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 oil and gas explorer Cobalt (NYSE: CIE) climbed as much as 12% in intraday trading Friday after Morgan Stanley (NYSE: MS) initiated coverage on the stock with an overweight rating.

So what: Morgan Stanley tapped Cobalt as a particularly pure and attractive play on deepwater oil exploration. While the U.S. administration continues to drag its heels on approving domestic drilling permits, Morgan Stanley believes Angola, where Cobalt plans to drill one to two wells next year, sports some of the tastiest offshore exploration potential in the world.

Now what: I wouldn't be so quick to climb aboard today's double-digit increase. Cobalt's West Africa prospects are certainly attractive, but as offshore expert TMFDoodleBugger posted yesterday, the company is "still in cash burn while they drill for new reserves and hope to get production going in a timely manner (3-5 years)." With the company still very much exposed to the Gulf of Mexico, Cobalt's shares, which are now up more than 55% over the past three months alone, might just have too much optimism baked into them.

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