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: Footwear sales specialist Foot Locker (NYSE: FL) shot out of the gate and proceeded to bound 12% higher this morning, as investors cheered third-quarter earnings that reversed a year-ago loss.

So what: Granted, sales grew only 5.4% versus last year's number, and exceeded expectations by only $60 million or so, but the company's $0.33 in per-share profits doubled what analysts had been predicting.

Now what: Foot Locker investors have been amply rewarded for sticking with this company through the tough times. Shares sprinted for a 55% gain over the past year, raising the valuation far beyond what rival retailers Finish Line (Nasdaq: FINL) or Wal-Mart (NYSE: WMT) charge. With a price now verging on 36 times earnings, investors may be wondering whether such an expensive stock still has the "legs" it needs to run further.

It does. While Foot Locker did not provide a cash flow statement with its earnings release (tsk, tsk), its most recent filings show the company's free cash flowing in at a rate three times faster than reported GAAP income -- $233 million in free cash flow, total. Investors tempted to play "pin action" on Foot Locker, and trade in the retailer for its suppliers, Under Armour (NYSE: UA) or Nike (NYSE: NKE), are actually better off sticking with the one that brung 'em.

Why? If Foot Locker maintained its pace in Q3 -- and all indications say it did -- then the stock's P/FCF ratio could now be as low as 12, which looks plenty cheap for a projected 11% grower paying its shareholders a 3.6% dividend.

Want more information on Foot Locker? Add it to your watchlist.

Fool contributor Rich Smith does not have any position in any company named above. The Motley Fool has a disclosure policy.

Wal-Mart Stores is a Motley Fool Inside Value selection. Under Armour is a Motley Fool Rule Breakers recommendation. Nike is a Motley Fool Stock Advisor pick. Wal-Mart Stores is a Motley Fool Global Gains choice. Under Armour is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Under Armour, and Wal-Mart Stores.

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