Life has been interesting for Flowserve (NYSE:FLS), a leading maker of flow-control products like pumps and seals. In addition to significant accounting restatements (and the seemingly mandatory SEC investigation that accompanies them), the company has faced other issues with the IRS and the company's possible involvement in the UN/Iraq oil-for-food scandal of recent years.

That said, Wall Street is a pretty forgiving place if people think you'll make them money again. We've seen a pretty healthy environment for all manner of industrial stocks -- even with recent pullbacks, it's been a pretty decent year for the likes of Eaton (NYSE:ETN), Parker-Hannifin (NYSE:PH), and Dover (NYSE:DOV). Combine a favorable macro environment with a beaten-down stock, and you've got a risky but high-potential setup.

The question that strikes me now, though, is whether Flowserve has seen its due in the market. Remember, this company just recently filed its 10-K for 2005, so things aren't exactly "normal" yet. What's more, you can credibly ask whether Flowserve's recent troubles have given rivals like Roper (NYSE:ROP), ITT (NYSE:ITT), and IDEX (NYSE:IEX) a leg up. While Flowserve was trying to fix itself and pay down debt, other businesses were spending money on product improvement.

If today's update is a fair indication, things aren't so bad. All we got today were numbers pertaining to bookings, and 29% organic growth at that, but then, this stock has been trading off little more than bookings for a while now. Are margins improving? Are returns good enough? The results for 2005 do show progress, but investing today requires a little more trust than usual that the business really is continuing to improve. Personally, I'm not keen on mixing investing with leaps of faith.

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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).