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.

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