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 water heater manufacturer A.O. Smith (NYSE: AOS) are boiling today, racing to gains as high as 10.8% on many times the average daily trading volume.

So what: This is a two-factor jump as Smith both reported blowout earnings in the second quarter and announced a $418 million buyout of privately held rival Lochinvar. The new lines of water boilers are expected to add $0.10 per share to Smith's earnings next year.

Now what: The company is focusing on water heating with laser-like concentration, including the pending sale of the unrelated electric motors division to Regal Beloit (NYSE: RBC). If the concept rings a bell, you may have heard of how Middleby (Nasdaq: MIDD) dropped everything else to focus exclusively on restaurant-grade cooking surfaces. For Middleby, that bold shift led to an astonishing 2,000% share price gain over five years. Our CAPS community is hoping for similar results for this five-star stock, partly fueled by booming water heater sales in China.

Interested in more info on A.O. Smith? Add it to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.