Investing in Your Backyard: Phoenix

I went from Phoenix, Arizona, all the way to Tacoma -- Philadelphia, Atlanta, L.A. OK, so we're going backwards, but still, thank you very much, Steve Miller. Today's backyard barbecue is happening in the dry heat of south central Arizona.

There are many good reasons for researching investment opportunities in a certain geographic area. If you happen to live in Laveen or Camelback East, 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, plus 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 the Valley of the Sun:

The mining contingency in town is huge. When Freeport McMoRan and Phelps Dodge merged a couple of months ago, the combined company took up residence in Phoenix, but kept the name of New Orleans-based Freeport. All-Star CAPS player camistocks explains the attraction to this five-star mining giant:

After the acquisition of [Phelps] Dodge, Freeport McMoran is now a copper producer. 78% of their expected output is now copper, while 12% is molybdenum and only 10% is gold! Goldbugs might be disappointed, but Freeport had already made 75% of last years profit from copper and only 25% from gold. As a hard asset bull I still like the stock and [so do] the insiders, it seems.

Southern Copper mines most of its metals in Peru, and it recently settled some long-running labor disputes to stabilize its operations. Our CAPS participants like the valuation, improving margins, and the strong demand for copper from massive and developing markets like India and China.

But there's more than just copper sappers here. Online educator University of Phoenix, for example, is indeed based in Arizona, and it's run by five-star company Apollo Group. Avnet and Microchip work together -- Microchip designs and builds semiconductors, and Avnet is one of its global distributors. Of course, it's hardly an exclusive relationship, and Avnet handles products from more than 2,000 component and end-product manufacturers.

The rundown
Our Foolish analyst teams haven't taken a liking to any of these large-caps, but there are six current newsletter picks and one former one among the smaller fries. Examples include Rule Breakers pick TASER (NASDAQ:TASR) and its stun guns, microwave communications expert and Motley Fool Hidden Gems pick Radyne, and pet-store chain PetSmart (NASDAQ:PETM), which shows up on the Stock Advisor scorecard.

Indeed, it's a vibrant business community. There are plenty of high-flying technology upstarts around, alongside restaurant chains, small-cap financial institutions, and even a major airline operator in US Airways. It's a diverse bunch, even before accounting for Luke Air Force Base, another major Intel production complex, and the American Express data center.

The 39 businesses that have earned CAPS ratings here sport an above-average mean of 3.2 stars, and seven newsletter picks in such a small market is certainly respectable. More than 50,000 Sun Devils make Arizona State University one of the largest educational campuses in the nation, which is always good for feeding graduates into the workforce. The simple fact is that Phoenix is bristling with growth of all kinds: population, business, tourism, you name it. The hot, dry climate is one of the draws, as is its location midway between the Texas business hubs and the California coast.

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

Further Foolishness:

• Fool on Call: PetSmart Gets Smarter
• Duel Revisited: Testing TASER
• The Mother of All Mergers?
• The Sleepwalking Millionaire

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he's still kicking himself for not buying Southern Copper in 2005, when several of his screens pointed that way. You can check out Anders' holdings if you like, or follow him around the world on these Foolish local-business treks. Intel is a Motley Fool Inside Value pick. Foolish disclosure is always red-hot, but it's a dry heat.