Some investing axioms bear repeating, and this is one of them: Companies don't go straight up, even though their stocks sometimes do. Now while I'm fully willing to ascribe some of Fuel-Tech's (NASDAQ:FTEK) recent run to investors simply catching up (or catching on) to this company, I think there's also some energy-tech froth coming into the picture.

That said, the company seems to be doing at least all right on running the business. Revenue was up 42% in the first quarter and both operating units (air pollution control and fuel treatment) had solid growth. What's more, operating income was up 82% as margins in the fuel treatment business seem to have picked up significantly.

So, what are the nitpicks this time around? Well, the backlog in Fuel-Tech's air pollution business dropped a fair bit, and orders in this quarter appear to be annualizing at a lower level than FY2005's full-year performance. And in the fuel treatment business, there has been some sluggishness as oil-fired plants (11 of the 32 customers) have increasingly been idled with today's high oil prices, and many of the coal-fired plants experienced lower operating levels in response to periodic issues with coal supply.

Longer-term, though, it's hard not to like the story here. More coal-fired generation capacity keeps coming onto the books (like TXU's (NYSE:TXU) recent announcement), and I really doubt we're going to see much in the way of rollbacks in environmental standards. What's more, countries like India and China are seemingly taking tentative steps to take better control of their pollution problems. And with the fuel treatment business, a move toward more Illinois Basin coal (good for James River (NASDAQ:JRCC), by the way) should be good for them as well.

Keep in mind, though, that Fuel-Tech is in the business of selling some new technological approaches into an industry known for extreme conservatism. And larger rivals like Engelhard (NYSE:EC) and Eastman Chemical (NYSE:EMN) have their own approaches -- some of which are cheaper in certain settings.

I was actually quite a fan of this company back in those distant days when it traded below $8 a share. And while I'm not going to say that Fuel-Tech can't, or won't, grow into today's valuation, I'd rather spend my time finding the next Fuel-Tech at $8 than chasing this one at today's prices.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).