Churn, Baby, Churn

A long haul–investor’s view of the list can be much different than the short-term view forced by journalism. Typically, the cutoff for calculating the market caps of listed companies came about two weeks before publication. What if the stock market suddenly soared or swooned in the interim? It happened in 1994, when 32 small- and mid-cap stocks among the bottom 75 fell more than 10 percent in that period. We rushed a supplementary list into the paper to show what had happened to all 100 stocks, but it, too, was only a snapshot of a constantly changing scene.

The list has other limitations. It misses some big players based here. Cargill, long one of the world’s largest privately held companies, doesn’t make the rankings because it’s private. Ditto for other companies in some of the state’s most significant industries—window manufacturers Andersen and Marvin, and a raft of players in printing and construction.

Nor does the list reflect the considerable activity of companies that have a large regional presence in Minnesota but headquarters in other states: Wells Fargo, Thomson West, Seagate, and others. Nonetheless, these companies tend to rely heavily on law, accounting, advertising and marketing, and other support firms that grew up with the big companies based here. (For that matter, the location of headquarters can be misleading. The Twin Cities area boasts 18 Fortune 500 company headquarters—a concentration that ranks the metro area 7th nationally, though it ranks 15th in population. But some would assert that insurer St. Paul Travelers is being run more from Hartford, Connecticut, than from its St. Paul headquarters since the Travelers merger.)

What the list measures best is the dynamic core of a great corporate strength that—even with an emphasis on shareholder value—benefits many stakeholders in the Twin Cities: employees, customers, suppliers, philanthropic organizations, and the community as a whole. It does this not least by providing reservoirs of talented executives and specialists. Many of the bankers who launched the 40 state-chartered community banks that have been founded in the Twin Cities area since 1991 came from the two big bank holding companies based here. And in the 1980s and ’90s, the Pioneer Press 100 charted the rise and fall of two other sectors built by homegrown talent: medical devices and computer hardware.

The First Looks Back

In 1991, I examined the list’s turbulence in a column for the Pioneer Press and, later that year, in a piece for the Minneapolis Fed’s Region magazine. At the time, one of the most definitive trends was the march up the rankings by medical technology companies and the simultaneous decline of computer hardware manufacturers.

Both of these industry clusters took root in the Twin Cities’ over-the-counter or “dollar” stock market nearly half a century ago. Computer hardware took off first, paced by Control Data and its many spinoffs. But by the mid-1980s, the hardware makers were flaming out in the Pioneer Press 100 as technological advances triggered plunging prices for computers. Control Data, 5th in 1983, was 24th in 1991. Cray Research, number 4 in 1987, had dropped to 16 four years later.

Fortunately for the Twin Cities, Medtronic and its spinoffs were climbing up the list by then. Medtronic had gone from 12th in 1983 to 5th in 1991, St. Jude Medical from 38th to 9th, and SciMed from 92nd to 19th. The 1991 list included 17 med-tech companies versus nine in 1983.