A few weeks ago, I wrote about how Behr's Premium Plus Ultra paint now uses Nanophase Technologies' (NASDAQ:NANX) proprietary nanoparticles. That news makes the $134 million nanotech company look like a solid, if not spectacular, investment.

You might think I'd be similarly bullish about word from Altair Nanotechnologies (NASDAQ:ALTI) that it's teamed up with leading paint manufacturer Sherwin-Williams (NYSE:SHW) to form a new company, AlSher Titania. All things being equal, it would be a step in the right direction for Altair; but as I've often said before, when it comes to this company, all things are not equal.

First off, Altair claims that AlSher Titania will be able to produce titanium dioxide pigment at a significantly lower price point than rivals. I find this a little hard to believe, especially since BASF (NYSE:BF) and Millennium Chemical (a subsidiary of the Lyondell Company (NYSE:LYO) are among the largest producers of titanium dioxide. On relative economies of scale alone, it's difficult to imagine how Altair's small manufacturing facility could match these behemoths on cost.

Secondly, Sherwin-Williams' deal with Altair is much different than Nanophase's relationship with Behr. For starters, Nanophase is already manufacturing and supplying the nanoparticles to Behr, and the paint will soon be sold in thousands of Home Depot (NYSE:HD) stores. More importantly, the partnership is already creating real revenues for Nanophase. The same can't be said for Altair.

Here's my advice, Fools: Continue to monitor Altair if you like, but don't invest. At its best, this deal puts only a thin coat on an already expensive stock. As my fellow Fool Seth Jayson pointed out, Altair is trading at 47 times revenue. At its worst, the deal is nothing more than the company's latest attempt to whitewash investors.

If you disagree, ask yourself this: Where's the revenue from Altair's past deals involving pool cleaners, animal pharmaceuticals, and most recently, hybrid batteries?

Think small with further Foolishness:

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Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big. He does not own stock in any of the companies mentioned in this article. Home Depot is an Inside Value pick. The Fool has a strict disclosure policy.