Energy prices soared. The economy stalled. Stock markets struggled. And George Bush was president.
The year was 1992, after the Gulf War but before the World Wide Web. Minnesota's Top 10 corporate giants, measured by annual sales, included five food companies, two manufacturers, a bank, an insurance company and retailer Dayton Hudson.
Fast-forward to the new millennium. Today's Top 10 is a more diversified portfolio that also includes health care (UnitedHealth Group), another national retailer (Best Buy) and a big utility (Xcel Energy).
Honeywell Inc. and Norwest Corp. (now Wells Fargo) are gone from the list, having relocated their headquarters after mergers. Yet after all the change served up by the 1990s, five of 1991's big firms -- including leader Target Corp. (formerly Dayton Hudson) -- remain in today's Top 10. And three others (Hormel, Nash Finch and International Multifoods) remain among the Top 20 in the Star Tribune's annual ranking of the 100 largest Minnesota-based publicly held companies.
Call it staying power. While the Internet and the emergence of a global economy have reshaped the commercial landscape, the native diversity of Minnesota's large firms and industries continues to lend stability in volatile times.
Here's proof: The market value of Minnesota's 100 largest firms rose 16.8 percent from March 3, 2000, to March 22, 2001 -- a period when most major market indexes declined and the tech-dominated Nasdaq Composite index plunged 61.4 percent. (Market value, also called market capitalization, equals the company's share price multiplied by the number of shares outstanding.)
Minnesota's not-so-New Economy doesn't sizzle as much as California's Silicon Valley. But it doesn't evaporate as quickly, either.
Moving market value
Our ST100 market value comparison comes with a caveat, however. The merger of U.S. Bancorp and Firstar transported a large chunk of market value from Milwaukee, where Firstar was headquartered, to the Minneapolis home of U.S. Bancorp. The same is true of Xcel Energy, which combined Minneapolis-based NSP with Denver-based New Century Energies. Those two deals account for about one-third of the year-over-year market value gain for the ST100.
But nine other Minnesota-based companies added $1 billion or more in market value while another five added between $500 million and $1 billion. Among all ST100 companies, there were 46 market value gainers plus four newly public companies added. There were 50 losers. Big gainers include health care services giant UnitedHealth Group, insurer St. Paul Companies Inc. and industrial soapmaker Ecolab.
"In a world that fell in love with technology, that's a pretty healthy list," said Phil Dow, head of retail strategy for Dain Rauscher Inc. "There are no pretenders there. They are all real companies."
Still, in a 12-month period where $4 trillion in market value has evaporated from U.S. equity markets, what are these Minnesota companies doing differently?
The answer is, not much. Rather, it is investors who have changed, frantically shedding technology stocks as the Internet bubble burst.
ADC Telecommunications, Minnesota's biggest tech company, has felt that pain as more than $6.3 billion of its market value evaporated -- most of it in the past six months. Software maker Retek is another tech casualty; it shed $2.1 billion in market value. Revenues at both companies increased better than 30 percent.
But technology companies account for less than 4 percent of sales and profits and less than 5 percent of market value of the ST100. Consequently, Minnesota's largest companies escaped the tech meltdown. And those once out-of-favor Minnesota stocks now are looking attractive.
"Now that the tech sector has corrected, the tortoises -- like 3M -- have caught up by just sort of plodding along," said Keith Tufte, director of equity research at American Express Financial Advisors. "I think it's a good sign for Minnesota."
Edina-based economist William Melton agrees. "When the Internet is going like blazes, you are going to look stodgy. But when the going gets rough for the Internet, you are going to look terrific."