Break out the green tea lattes and California burritos -- it's a backyard investing barbecue in southern California!
There are many good reasons for researching investment opportunities in a certain geographic area. Today, it's San Diego, Calif., where the weather is always great for a barbecue. Let's see how the business ambiance matches up.
If you happen to live in Normal Heights or Linda Vista, 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 between Carlsbad and San Ysidro:
|
Company |
Market Cap (billions) |
CAPS Rating |
Bull Ratio |
|---|---|---|---|
|
Qualcomm |
$70.4 |
91% |
|
|
Sempra Energy |
$15.7 |
94% |
|
|
SAIC |
$8.2 |
95% |
|
|
Leap Wireless |
$5.7 |
75% |
|
|
Amylin Pharmaceuticals |
$5.6 |
81% |
You can't miss the half-ton gorilla in town -- wireless equipment maker Qualcomm stands simian head and hairy shoulders above the rest. That doesn't automatically translate into respect from our CAPS community, though, and its current grade is very much average.
The bears think that the stock's P/E ratio is too high, and that the mainstay CDMA technology is getting outdated. The latter might not be a concern though, at least not if you ask all-star CAPS player FearlessCal:
I don't understand why QCOM bears don't believe QCOM has a play in GSM. The 3G technology is WCDMA -- which is CDMA on top of 2G GSM networks. Actually, I find it somewhat disturbing that when the 3G standards were being set, all the GSM providers knew about QCOM's royalty payments for CDMA and agreed to the standard, only to now complain about the royalties.
Food for thought, indeed.
Military tech-support provider SAIC has a much easier time finding friends. This Motley Fool Inside Value pick is rolling in cash according to even its detractors, and as long as the government keeps spending money on defense, SAIC will collect plenty of it.
Surf's up, dude
Though Qualcomm is the undisputed heavyweight champ, the biotech industry is perhaps a larger contributor to the local economy. Of the 99 company tickers I found in San Diego with my trusty Capital IQ screener, 46 work mainly in health care and pharmaceuticals. Though their market caps add up to less than half of the telecom giant's, that's certainly a respectable cadre of businesses.
After all, this is the home of UC San Diego and its world-class medical school, not to mention the Torrey Pines medical research center. Access to top-notch research facilities and highly qualified med-school graduates always helps when you're kicking off a biotech upstart -- just look at Boston for further evidence of that theory.
There's also a surprisingly healthy real estate market here, with several mid-cap REITs on the market, and a handful of smaller wireless communications players living in Qualcomm's massive shadow. And that, somewhat shockingly, is it.
Outside those four fields, you won't find any other major business concentrations here, only one-off outliers like apparel retailer Charlotte Russe
Final Foolishness
Maybe it's something to do with the weather. Almost every area I've touched on in this article series has come out looking at least decent, and many of my destinations have dazzled me -- Austin, Seattle, and the Twin Cities would be good examples.
But now I'm looking at a decidedly mediocre vista. Not since Miami has the CAPS community been so down on a backyard of mine, despite the plethora of stocks in the supposedly booming medical sector. The average CAPS grade here is an uninspiring 2.6 -- a D+ at best.
And our newsletter analysts seem to largely agree on the lack of opportunity in San Diego. SAIC is the only current pick, though two former recommendations lie discarded in a ditch by the bay in La Jolla.
It's not for a lack of economic advantages. Convenient trade with Mexico, a fine seaport, and easy access to two large airports should lead to good things. But you could say similar things about Miami, too, and that was my previous worst-performing city. Are the suits sipping margaritas out on the beaches in Torrey Pines and South Beach rather than conducting serious business?
OK, that's probably exaggerating things, but the city that was dubbed "Enron By the Sea" by investigators just three years ago might have earned its unwelcome nickname. Unless you're a focused biotech investor, you might prefer looking elsewhere for your next portfolio pick. Just one Fool's opinion, backed by that of nearly 30,000 rated CAPS users.
Do you agree? Disagree? Feel free to weigh in on the market of the extreme Southwest -- or on any stocks at all, really -- by joining Motley Fool CAPS and blasting away with your ratings and commentary pitches. And if the Plymouth of the West isn't your 'hood, maybe we'll come around where you live the next time.
Hit the beach with some further reading:
SAIC is a Motley Fool Inside Value pick. A 30-day trial to the Inside Value service can be yours by simply following this link.
Fool contributor Anders Bylund holds no position in any of the companies discussed here, but those burritos sound good. You can check out Anders' holdings if you like, or follow him around the world on these Foolish local-business treks. Foolish disclosure is always red-hot.
