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 independent oil and gas company VAALCO Energy (NYSE:EGY) jumped as much as 20% today after reporting earnings.

So what: Fourth-quarter revenue was up 9% to $58.3 million and the company swung from a loss a year ago to a $26.4 million profit. On a per-share basis earnings were $0.46, coming in well ahead of the $0.34 that analysts expected.  

Now what: Margins expanded significantly in 2013 and expansion plans are under way. The cash flow is encouraging and the stock now trades at just over 9 times trailing earnings. Given the opportunities in Gabon and Angola I think shares continue to have room to run.

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.