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 Liquidity Services (Nasdaq: LQDT) surged 13% in early trading and remain up about that much as the closing bell approaches. Analysts at highly rated researcher Stifel Nicolaus initiated coverage of the stock with a buy rating.

So what: I don't have access to Stifel's note so I can't tell you what drove the rating, but it's a good bet that a new federal contract helped. On Monday, Liquidity Services announced an extension to its existing deal with the Department of Defense.

Now what: Much like eBay (Nasdaq: EBAY) for consumer goods, Liquidity Services processes and sells via auction excess scrap accumulated and declassified by the DoD. It's been a good business. Adjusted profits have improved by more than 19% annually over the past three years. Is that enough growth to support the stock's valuation? You tell me. Weigh in using the comments box below.

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