Break out the beer and brats -- it's a backyard investing barbecue! And don't forget the ketchup.

There are many good reasons for researching investment opportunities in a certain geographic area. Today, we're looking at Pittsburgh, home of the Terrible Towel and the Andy Warhol Museum. As it turns out, the City of Bridges also has a vibrant business district.

If you happen to live in Lawrenceville or Polish Hill, 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 -- an area that could be chock-full of undiscovered treasures on their way to greatness.

Without further ado, here's a selection of the 'Burgh's finest businesses:


Market Cap (billions)

CAPS Rating

Bull Ratio

Alcoa (NYSE:AA)




H.J. Heinz (NYSE:HNZ)




Allegheny Technologies (NYSE:ATI)




American Eagle Outfitters (NYSE:AEO)




Respironics (NASDAQ:RESP)




Data taken from Motley Fool CAPS on Sept. 28.

If you think I'm cherry-picking the tickers above, think again. The median CAPS grade in Pittsburgh is a stellar four stars, and there are five current Foolish newsletter picks and one former one out of all the companies, to start with. Only 11 companies out of the 46 rate below the three-star level, the biggest one being PNC Financial Services (NYSE:PNC). Even then, the negative CAPS comments about it are largely because of its being in the much-maligned financial sector rather than about company-specific problems.

Steelworking and other heavy industrial manufacturing used to be the lifeblood of Pittsburgh, and that aspect of the local economy isn't entirely dead yet. Allegheny and Alcoa are doing just fine, and are two of the biggest businesses around.

Other old-line mastodons like Heinz and PPG Industries (NYSE:PPG) aren't going away anytime soon, either. I mean, unless America and the rest of the world stop eating ketchup and installing glass panes in their windows.

New deal
Although the old guard stands strong, the business world today is very different from when Andrew Carnegie started working steel in this town. The new Pittsburgh is a cavalcade of robotics, biotech, and tourism, right alongside the old-school financial and industrial majors.

After scaling down the dirty, noisy steel production a bit, this city has been ranked the most livable city in America, an honor it shares with nearby Cleveland. Is it something in the water up there? Carnegie Mellon and the University of Pittsburgh supply local businesses with a steady flow of high-quality graduates to fuel the workforce, and the north-central location in America's heartland makes business travel and product shipping easy and affordable. And there's plenty of old money around to keep the arts and culture healthy -- as well as funding new start-ups.

In short, it's not hard to see why the modern-day Steel Town is home to so many excellent businesses -- the advantages are almost too plentiful to list. It's one of the most impressive showings in the Backyard series so far, right up there with Cleveland, Seattle, and Austin. Feel free to dig in and explore the City of Champions the next time you're looking for a quality investment opportunity.

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

Further Foolishness:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.