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What: Shares of Omega Protein Corporation (NYSE:OME) were looking stronger today, gaining as much as 21% after reporting fourth-quarter earnings this morning.

So what: The maker of Omega-3 fish oils and specialty protein products said revenues increased 4% to $66 million, missing expectations at $69.5 million, though earnings per share soared from $0.20 a year ago to $0.66, cruising past estimates at $0.32. The surge in profits came as gross margin jumped from 20.5% to 42.4% due to "an increase in fish oil and fish meal sales prices and greater-than-anticipated fish catch in the fourth quarter," which lowered costs and boosted margins in the animal nutrition segment to 47.1% .  

Now what: The jump in animal nutrition gross margins was offset by a drop in the human nutrition segment from 24.9% to 13.6%, showing the volatility of Omega's business. Still, animal nutrition makes up over 80% of Omega's revenue so the price increases seem to bode well going forward. Omega did not release guidance, but the company has beaten earnings estimates easily in its past four quarters, and looks cheap based on its trailing valuation at a P/E under 8. Look for analysts to lift their estimates, which should give the stock another boost. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.