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: Diodes Inc. (Nasdaq: DIOD) popped 14% in intraday trading Thursday after the company reported fourth-quarter EPS of $0.55, up 53% year-over-year and ahead of the $0.50 consensus estimate.

So what: Morgan Keegan raised its price target on the stock from $28 to $31.50. Another brokerage firm, Robert W. Baird, upgraded the stock from neutral to outperform.

Now what: Sales growth has accelerated and the company has cut costs, providing opportunity for continued strong EPS growth. The EPS beat and management's comments about capacity constraints and "strong momentum as we enter 2011" suggest that EPS estimates are too low. At the time of publication, Diodes was trading at $28.85; the stock is attractively valued at a forward P/E ratio of 13.9, a discount to the semiconductor sector (at 24.5) and the technology sector (at 19.9).

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