Investing in Your Backyard: Atlanta

Break out the peach schnapps and peanuts -- it's a backyard investing barbecue, Hotlanta style!

There are many good reasons for researching investment opportunities in a certain geographic area. Today, it's the Big Peach -- Atlanta, Georgia. If you don't know anything about the 404, you really haven't lived.

An Olympic host, major media center, and the transportation hub of the Southeast, Atlanta has attracted the headquarters of more Fortune 500 companies than any other city except New York and Houston.

If you happen to live in Sandy Springs, you already have a few advantages when it comes to evaluating the local market, such as access to local news sources and the word on the street, and a high probability of being a customer or employee of these companies. And if you're not a local resident, you might still want to know whether the weather matches the business climate -- a hot area could be chock-full of undiscovered treasures on their way to greatness.

Without further ado, here are the largest companies headquartered in A-Town:

Company

Market Cap (millions)

CAPS Rating (out of five)

Bull Ratio

Coca-Cola (NYSE:KO)

$111.1

***

88%

Home Depot (NYSE:HD)

$75.0

**

79%

United Parcel Services (NYSE:UPS)

$74.5

***

90%

SunTrust Banks (NYSE:STI)

$28.9

*

69%

Data taken from Motley Fool CAPS on April 5, 2007.

I know that name!
These are household names, not just across the South but in some cases around the world. But CAPS doesn't lavish these mega caps with a profusion of stars, exactly.

Coke hardly needs an introduction. It's one of the most recognizable brands in the world, and the company sells two-thirds of its flavored syrups outside North America. Some CAPS players, like my old friend TMFBreakerBeth, don't appreciate the company's steady-as-she-goes prospects, though. "Zzzzzzzzzzzzz. Large caps, fat caps, sleepy caps," she said -- to which the game's score leader, TMFEldrehad, retorted: "At a trailing P/E of 20, I'll lock this one up, do a Rip Van Winkle imitation, and snore contentedly away -- confident that the premier brand worldwide will bring me long-term market beating returns from here."

You know Home Depot, too, don't you? The home improvement warehouse stores dot the American landscape from coast to coast, and the homeowners amongst us can find the two or three closest locations in our sleep. But there's deep-rooted trouble inside the giant, says money4eds:

The systematic elimination of associates with knowledge was brutal to watch. The spirit is gone and the remaining associates are tired. Heavy spending to return knowledge at the associate level and to wipe out the management that thinks like Nardelli. This will take at least a year and that assumes they spend like crazy to rehire quality help!

As for UPS, the worldwide shipper has a few CAPS fans, such as All-Star player mweav: "A dominant shipper in an economy increasingly dependent on shipping with the rise of ecommerce. The recent earnings miss provides a great entry point."

But millie34 does not agree: "Skyrocketing fuel prices plus a scary corporate culture of running drivers until they drop combined with a less-than friendly attitude towards small accounts = problems over the long haul, particularly if FedEx competes price-wise."

Southern mega-bank SunTrust rounds out our top four on a sour note. How come? Let's ask WhoDey9. "SunTrust's potential is sever[e]ly handicapped by the old Trust Company of Georgia's ultraconservative credit philosophy," he says. "The bank's footprint in some of the fastest growth markets in the nation should be fueling above average growth, but management's refusal to embrace modern lending practices continues to drag down performance."

What else have you got?
Unlike the banks of North Carolina or the tech startups in Austin, there isn't any particular flavor to the Atlanta business brew. Instead, it's a diverse mix of industries from the largest companies in the area to the very smallest.

I'd be remiss not to mention that several cable TV stations operate out of Atlanta under the Turner Broadcasting umbrella. But that's part of the Time Warner (NYSE: TWX  ) conglomerate now, so the headquarters proper lie in New York. It's amazing what you can build out of a little UHF station (right, Weird Al?).

Forty-eight out of the 69 companies I found here have earned a CAPS rating. Eleven of them, or 23%, are five-star stocks -- but 13 only have a single star. It seems like mediocrity isn't in the cards.

But nine Foolish newsletter picks puts Hotlanta right up there with Seattle or Austin -- the cream of the crop, according to our crack teams of stock pickers. Credit card processor CompuCredit (Nasdaq: CCRT  ) , for instance, received five stars from our CAPS community and has also received a Stock Advisor nod.

Foolish finish
By the time of the Civil War, Atlanta had already grown into a major transportation hub, which was rebuilt relatively stat after the war. Now, the Hartsfield-Jackson Delta hub is the world's busiest airport, counting by passengers served, and the city is nestled between several crisscrossing major interstate highways.

The local transportation system got a boost from the Olympic projects, and there's a world-class transportation infrastructure in place these days. It's a burgeoning, global city, with a long business history and a progressive social structure. And success attracts more business, so don't be surprised to see A-Town continue its growth into the future. It's a veritable gold mine for investors, with top-notch opportunities both high and low.

Do you agree? Disagree? Feel free to weigh in on the 404 market -- or on any stocks at all, really -- by joining Motley Fool CAPS and blasting away with your ratings and commentary pitches. And if Buckhead isn't your 'hood, maybe we'll come around where you live the next time.

Further Foolishness:

Think you can pitch your favorite stock -- or ditch your least favorite one -- in 27 seconds or less? That's just what we're doing over at Motley Fool CAPS! Come check out our new 27-second stock videos.

Fool contributor Anders Bylund is a Coca-Cola shareholder and lifelong addict, but holds no other position in any of the companies discussed here. He still has fond memories of Perl training classes in Alpharetta. You can check out Anders' holdings if you like, or follow him around the world on these Foolish local-business treks. Coca-Cola and Home Depot are Motley Fool Inside Value picks. FedEx and Time Warner, as well as CompuCredit, are Stock Advisor recommendations. UPS is an Income Investor choice. Foolish disclosure is always red-hot.


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