The 100 Smartest Companies of 2007 - ' Taking Stock'

One of the drug companies on our list, the pain-killer specialist Endo Pharmaceuticals (No. 62), says it has not been particularly smart about using technology. "Are we smart or are we lucky?" says Daniel Carbery, the company's senior vice president of operations. "We hope both. But you can't institutionalize luck." The $1 billion company will be investing upward of $20 million this year in a series of technology initiatives designed to support its growth.

One sobering fact about this Baseline list is that people who own stock in the smartest companies may not have much to show for it—at least not lately. This is especially true for people with investments in technology sellers like the software giant Microsoft (No. 69) and the wireless-provider Qualcomm (No. 27). The companies have brilliant technical workers who keep the money rolling in, but investors have been skeptical about the firms' future prospects; both are trading at about half the level of their all-time highs. The aforementioned Yahoo is in a similar position. Things are even worse for Linux-seller Red Hat (No. 59), whose shares trade at about one-seventh of their record seven years ago.

The graphics software company Adobe Systems (No. 95) has bucked the depressed tech-stock trend. With its recent price near $40 a share, Adobe is close to where it was seven years ago. An investor who has held Adobe's shares since then may not feel very smart, but at least he can take some solace in knowing that he has not been going backward.