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 molecular diagnostics company Cepheid (Nasdaq: CPHD) surged 22% on Friday after its quarterly results and full-year outlook topped Wall Street estimates.

So what: Thanks in large part to growing sales of its GeneXpert DNA testing system, Cepheid posted a second-quarter profit of $0.03 per share, while analysts were expecting a per share loss of $0.02. The results represent the third straight quarter of positive earnings for Cepheid, and it's obvious that Mr. Market fully expects the trend to continue.

Now what: I'd wait for a pullback before jumping into Cepheid. While management also raised its full-year profit outlook to between $0.08 and $0.11, the stock -- now up more than 130% over the past year -- trades at a particularly lofty multiple of that estimate. For conservative investors, larger and cheaper rivals like Abbott Labs (NYSE: ABT) and Life Technologies (Nasdaq: LIFE) seem like safer ways into the space.

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

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Abbott, and the Fool owns shares of it.Try any of our Foolish newsletter services free for 30 days.

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