Skepticism is key to successful investing. But all too often, studied caution gives way to outright fear. In this post-Enron age, nothing drives fear more than the implication that something could be amiss with a company’s financial reporting.

Clean Harbors (NYSE: CLH) is the latest example of a formerly hot stock that has been engulfed by suspicions of financial impropriety, regardless of their merit.

In 2011, the hazardous waste management company blew past analyst estimates, thanks in part to its involvement in clean-up efforts following a major oil spill in Montana’s Yellowstone River. The company had similarly benefited from another oilrelated disaster the year before, when it was called in to assist with the aftermath of the BP oil spill in the Gulf of Mexico.

In addition to beating earnings estimates by an average of more than 36 percent each quarter in 2011, Clean Harbors also surprised to the upside for revenue by an average of roughly 6 percent. While the market eked out a paltry 2 percent gain that year, Clean Harbors’ stock shot up almost 52 percent.

But with no major disasters in 2012 to power earnings, Clean Harbors missed analyst estimates in three of its four quarters. Although earnings per share still climbed nearly 19 percent year over year, the stock ended the year down almost 14 percent.

The company’s woes compounded with its announcement on Feb. 5 that Robert Gagnon, hired last August as chief financial officer, had submitted his resignation. Shares fell more than 9 percent in the period following this news.

Clean Harbors reassured investors that the resignation did not arise due to any disagreement regarding its operations or financial statements. However, this was still a jarring development, particularly when the company consummated its $1.3 billion acquisition of Safety-Kleen during Gagnon’s brief tenure.

But when you consider some of the details surrounding his hiring and subsequent resignation, it’s still possible to take a charitable view. For one, Gagnon previously served as chief accounting officer at Biogen Idec (NSDQ: BIIB), so his departure could have been precipitated by the clash of corporate cultures as he transitioned from a large biotech innovator to a relatively small waste company.

Secondly, Clean Harbors noted that it would continue to retain Gagnon through the end of March for “transitional services.” If there were anything awry with the company’s financial statements, then presumably it would be anathema to this former auditor to stick around for another two months.

The company’s former CFO, who had been promoted to president, has now taken on the additional responsibility of his earlier role for the time being.

These issues have left the stock trading near $55, almost 22 percent below its 52-week high. But we believe the company is still well positioned for long-term growth, though it may not necessarily replicate the stock’s heady gains of the past 10 years.

A Clean State

Still, CEO Alan McKim, who founded the company in 1980, owns a substantial 8 percent of shares outstanding, so he’s certainly incentivized to pursue further growth.

And given the size of competitors Waste Management (NYSE: WM) and Republic Services (NYSE: RSG), Clean Harbors still has ample room to do so. Though the company is tiny by comparison, it commands sizable market share in its niche, including control of 70 percent of North American commercial incineration and 20 percent of landfill capacity for hazardous materials.

The disposal of hazardous materials is highly regulated, and the cost of compliance for Clean Harbors results in lower margins relative to its peers. But this also means the company has a defensive edge that makes it difficult for competitors to encroach, while giving it pricing power.

Clean Harbors has been on a bit of an acquisition spree, with nine deals over the past five years. There’s some concern that the lower-margin business of its latest acquisition could constrain the company’s profits.

Even so, once Clean Harbors integrates Safety-Kleen into its operations, analysts predict earnings will grow almost 24 percent in 2014 after a modest drop this year. That gives investors plenty of time to build a position by taking advantage of periodic selloffs.