As Pittsburgh's lukewarm economy struggles to find new growth engines in technology and life sciences, a Rust Belt diamond in the rough claimed the title of the region's top performing public company last year.
U.S. Steel nudged out 2006 champion PNC Financial Services, which slipped to the No. 2 spot, where the Grant Street steelmaker finished last year.
Seven performance factors were used to determine the winner: revenue, revenue growth, net income, net income growth, stock performance, market capitalization (a measure of what a company is worth determined by multiplying its share price by the number of shares outstanding) and return on equity, a gauge that measures how effectively management deploys capital provided by shareholders.
The formula used to rank the Top 50 favors large companies such as U.S. Steel, which was No. 1 in revenue, No. 2 in profits and No. 4 in market cap.
However, there were a few small, hard-charging exceptions, led by No. 5 L.B. Foster, a Green Tree company that makes rail, construction and tubular products. Foster cashed in its 21-year investment in a regional railroad serving Wyoming coal country, recording a $123 million pretax gain from the asset sale. The divestiture, plus strong core businesses, gave Foster the best profit growth and return on equity among the Top 50 and made it the third-best performing stock in the region.
Ansys, a Cecil software developer whose market cap is about a fourth of U.S. Steel's, moved up 19 spots to No. 6. Ansys had the second-best earnings, the third-best revenue growth and the fourth-best stock performance among the Top 50.
Calgon Carbon finished No. 10, aided by its status as last year's top regional stock. It also generated the fourth-best performance in earnings growth. The Robinson company, which supplies activated carbon and other products and services used to treat water, jumped up from the No. 36 spot on the 2006 Top 50.
Bank stocks dominated the bottom of the list, accounting for six of the 10 worst performing companies. Ellwood City's ESB Financial edged out AmeriServ Financial of Johnstown for the worst performing financial company.
The poorest performer was Tollgrade Communications. The Cheswick telecommunications products and services provider had the biggest loss among the Top 50 and ranked last in earnings growth.
Two of the 10 worst performing companies from last year's list didn't make it back this year. Duquesne Light and Blair Corp. dropped off when they were acquired and taken private last year.
Return to Top 50 Index
Len Boselovic can be reached at email@example.com or 412-263-1941.