Star Tribune 100: A roaring start

  • Article by: PATRICK KENNEDY , Star Tribune
  • Updated: May 31, 2011 - 9:37 PM

Most of Minnesota's largest companies are in positive territory - especially those in the urology field.

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Polaris Industries Inc., makers of ATVs, is among Minnesota’s top-performing stocks.

Nearly two-thirds of Minnesota's 100 biggest public companies are in positive territory for the year.

Oh, and investors seem to be bullish on companies in the urological field.

Uroplasty Inc. of Minnetonka posted the highest total return among the Star Tribune 100 companies through May at 106.5 percent. It closed at a 52-week-high of $8.32 on Tuesday. Uroplasty makes medical devices and treatments for voiding dysfunctions.

American Medical Systems Holdings, which makes products to treat urological disorders, also hit a 52-week high Tuesday of $29.94. The company in April agreed to be purchased by Endo Pharmaceuticals Holdings Inc. of Pennsylvania. That deal should close in September.

Finally, a third urology company, Urologix, closed at 95 cents on Tuesday, up 48.4 percent for the year and good enough to put it among the top 10 gainers. Plymouth-based Urologix makes nonsurgical, catheter-based prostate treatments.

Other sectors faring well so far in 2011 include local casual restaurant chains Granite City Food & Brewery and Buffalo Wild Wings, which are up 58.7 and 42.9 percent respectively.

Companies facing severe restructuring were among the biggest decliners. Digital Angel, the biggest decliner on the list, announced May 9 it would sell its largest business, Destron Fearing, for $25 million. Disk-drive component maker Hutchinson Technology Inc. continues to downsize and announced another round of steep job cuts in March.

Meanwhile some investors are betting heavily against Northern Oil and Gas, which is down 26.1 percent so far this year. The company, an energy play on the North Dakota oil fields, was the most-shorted company on the Amex market -- 23.5 million shares -- according to a recent ranking.

Among the large-cap companies in the Star Tribune 100, insurer UnitedHealth Group's total return jumped 35.56 percent year-to-date while medical device makers St. Jude and Medtronic rose 18.5 and 9.73 percent, respectively. Global manufacturing giant 3M rose 9.36 percent. Even grocery retailer Supervalu, which has had its difficulties, was up 6.54 percent through May 31.

But big-box retailers Best Buy and Target struggled, delivering total returns of -7.38 and -17.63 percent respectively.

Overall, total return for Bloomberg Star Tribune 100 index rose 7.84 percent for the first five months while the Standard & Poor's 500 delivered 7.82 percent. (Total return include price appreciation plus dividends, if any.) The index includes the largest, Minnesota-based public companies ranked by revenue.

Jim Paulson, chief investment strategist, at Wells Capital Management, said Tuesday he's holding to his December 2010 prediction that the S&P 500 will close above 1,400 by the end of this year, meaning that the market could gain another 4 or 5 percentage points.

"This market rallied hard through February, and it's consolidated the last three or four months," Paulson said. "We had higher energy prices, disaster in Japan, bad weather in the U.S. and the numbers have gone a little soft lately. But this consolidation also sets us up for later."

Paulson noted that the forward 12-month earnings projection for the S&P 500 index is about $100 per share, or about 13 times earnings. The market traditionally isn't thought of as expensive until the price-to-earnings ratio exceeds 15.

Moreover, Paulson noted that the private sector has created about 250,000 jobs monthly for the last three months and most analysts expect another 200,000-plus jobs month to be announced Friday.

Interest rates remain low and bankers finally are reporting slight increases in commercial, industrial and consumer loans.

David Joy, chief market strategist at Ameriprise Financial, ticked off a litany of global financial challenges to markets, and concluded in his weekly financial note to investors: "It will likely be several months before we know whether these issues will be resolved to the satisfaction of investors.''

Star Tribune staff writer Neal St. Anthony contributed to this report. Patrick Kennedy • 612-673-7926

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