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 alternative fuel maker Solazyme (NASDAQ:TVIA) jumped as much as 22.7% today, after reporting earnings.

So what: Solazyme only reported $8.6 million in revenue, which was just short of estimates, and a loss of $0.37 per share, but it was excitement about the future that had investors buying today. The company announced the signing of a joint venture framework agreement with Bunge that plans to produce 300,000 MT annually by 2016. It also signed a strategic collaboration agreement to manufacture and market tailored algal oils with Archer-Daniels-Midland (NYSE:ADM).

Now what: These kinds of agreements are certainly a step forward, but let's keep in mind that revenue was actually down in the quarter, and the company's losses are only growing. Buying Solazyme now is a bet that these oils and fuels will be a financial success, which we have little evidence of right now. I'm not buying into this stock until I see strong, consistent profits, so I'm definitely not a buyer today.

Interested in more info on Solazyme? Add it to your watchlist by clicking here.


Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw

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