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: W&T Offshore (NYSE: WTI) is topping the list of New York Stock Exchange outperformers today, and for two reasons: First, it has added 164 billion cubic feet worth of proven natural gas reserves to its balance sheet through its $366 million purchase of some West Texas Permian Basin real estate. Second, it just reported market-thumping earnings of $0.43 per share ("excluding items"), considerably ahead of consensus estimates of $0.31 (likewise).

So what: All's not oil and roses in Texas, of course. Add those pro forma-less items back into W&T's results, and the company's net income of $0.25 per share wasn't even a patch on last year's $0.57 net haul. Still, the company managed to grow revenue 25% on a mere 14% increase in volumes of gas pumped. Not too shabby.

Now what: But wait -- W&T shares are up 20% today despite profits that actually dropped? Nay, profits that plunged? What's the frequency, Kenneth? W&T may be a fair sight bigger by reserves today, and it may be growing revenues admirably, but the stock's now selling for 22 times GAAP earnings and nearly 62 times free cash flow. Are these really prices you want to pay for a company that, according to Wall Street, is set to show no growth in its profits for the next five years?

I sure don't. And judging from the 25% short interest in the stock, it seems as if I'm not alone. Tread warily, Fool. Once today's short squeeze is over, reality may set in.

Disagree? Think W&T looks A-OK? Add it to your watchlist.