These are good days to be in the filtration business. With 3M's (NYSE:MMM) purchase of CUNO (NASDAQ:CUNO), a new valuation bar has been set, and investors have gone around bidding up the multiples of the "next CUNO."

With this renewed investor interest, and good performance in its own right, CLARCOR (NYSE:CLC) is near a 52-week high. Now, I don't know why it's CLARCOR and not Clarcor, but don't let hyperbolic capitalization get in your way.

Business was very respectable in the second quarter. Sales climbed more than 10%, and margin improvements led to a nearly 16% increase in operating income and a slightly higher increase in net income.

Sales in the engine/mobile filtration division were up 13%. The company's efforts to increase original equipment manufacturer sales have started to pay off, and good growth in China is helping as well. This business supplies all manner of filtration products for powered vehicles, though autos are not a major driver, and the slowdown in domestic auto sales isn't really hurting the business.

In the industrial/environmental division, sales were up 9% but operating profit was up only 3%. Although CLARCOR sees areas of strength in businesses like wastewater treatment, aviation fuel filtration, and oil and chemical production, slow HVAC filter sales weighed on the results.

In the company's third division, packaging, results were pretty strong. Sales climbed 11% and operating profit grew 40%. While this is certainly an oddball division relative to the company's focus on filtration, the business here appears to be getting better and better.

Elsewhere, investors can also take heart in a strong balance sheet and solid free cash flow.

With the CUNO acquisition, there has been considerable new interest on the Street in filtration companies. Companies like CLARCOR, Pall (NYSE:PLL), Donaldson (NYSE:DCI), Millipore (NYSE:MIL), and Calgon Carbon (NYSE:CCC) all do different things within filtration and purification, but all are near 52-week highs.

I'm a big believer in the future of filtration. As the quality of air and water decline and the sensitivity of machinery increases, there will be ongoing demand for filtration products. That said, valuations are beginning to look a bit stretched, so Fools would do well to tread carefully in this space.

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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).