On Tuesday, Headwaters (NYSE:HW) announced that its fourth-quarter earnings had decreased to $17 million from $28 million in the fourth quarter of 2005, and that revenue had dipped a modest 2% to $275 million. The drops were blamed on declining sales from the company's construction business.

So, has Headwaters stalled? Not at all. In fact, I believe the company represents an excellent buying opportunity. For starters, although revenue was down modestly, the figures were actually much higher than most analysts had predicted. The consensus revenue figure was an estimated $247 million.

Secondly, in addition to being a surprisingly diverse company -- with revenue coming from coal products, as well as alternative-energy sources such as ethanol -- its construction material business is a solid environmental play.

Last week, I discussed how a number of companies, including Duke Energy (NYSE:DUK), Alcoa (NYSE:AA), and PG&E (NYSE:PCG), were all lending their support to a cap-and-trade system that seeks to limit carbon emissions.

This is not well known, but the main competitor to Headwaters' fly-ash-enhanced concrete -- Portland cement-- is a high producer of carbon dioxide. It has been estimated that for every ton of Portland cement produced, a ton of carbon dioxide is released into the environment. This is bad news for large Portland cement users such as Lafarge (NYSE:LR) and Cemex (NYSE:CX) and good news for Headwaters.

Furthermore, both FlexCrete and Syndecrete (concrete products Headwaters manufactures with fly ash) are also very energy-efficient. Among other things, they have excellent thermal insulation properties. As both advantages become better known in this new era of environmental awareness, expect sales from Headwaters' construction material business to increase.

Headwaters investors can look forward to another piece of good news. The company's synfuel business is highly sensitive to oil prices, because when they rise above $60, a tax credit offered by the federal government to synfuel producers begins to be phased out.

This past summer and fall, when oil prices soared, that portion of the company's business -- and the company's stock -- took a serious hit. With oil now back below $60, I expect the company, in the coming quarters, might experience a nice little profit from this windfall. Be aware, though, that the tax credit is set to expire completely by the end of this year, and it is not expected to be renewed, so this little bump (if it occurs) will be a one-time deal.

All told, Headwaters might appear to have slowed or even stalled. But things are moving in its favor, and if it just goes with the flow, the company's stock should begin picking up momentum soon.

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Headwaters is a Motley Fool Rule Breakers recommendation. Cemex is a Stock Advisor pick. Duke Energy is a Motley Fool Income Investor recommendation. Try any one of our investing services free for 30 days.

Fool contributor Jack Uldrich does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.