One Economy, Many Opportunities
An economy as huge and as dynamic as California’s both demands and defies summarization and categorization.
The demand derives from our need as Californians--and from the need of outsiders--to understand what really goes on in this trend-setting economy and where it’s leading us, and the nation.
The defying occurs because, by definition, an economy as ever-changing as the Golden State’s can’t be easily pigeonholed--at least not with a description that will hold for very long.
Yes, California business means technology, and in a big way. But it also means Mattel, Safeway, Reliance Steel, Cheesecake Factory, Countrywide Credit and Clorox, to name but a handful of the home-grown companies whose thriving businesses aren’t rooted in silicon.
Which brings us to the specific subject matter of this special supplement: The Times 100.
This section isn’t built around a single listing of California companies--the biggest companies in the state ranked by sales, for example--but rather incorporates 13 different listings, each of which offers insight into the diversity and breadth of California’s public companies.
The most important Times 100 list, then, is whichever of the different listings is most interesting or most useful to you--as an investor searching for hot stocks, a business owner looking for cross-selling opportunities, a would-be entrepreneur scoping out promising new industries, an employee looking to make a job change, or simply a casual observer.
For instance:
* If you’re curious as to which businesses are growing fastest, look to the Sales Growth 100 list and the Gazelle 100 list. The former shows the publicly traded California companies with at least $50 million in annual sales whose top line has risen fastest over the most recent four quarters. The latter zeros in on the fastest growers with between $10 million and $50 million in sales.
Some of these are certain to be the state’s new industrial, technology and service-industry leaders, which means they may present excellent employment opportunities, among other things.
Many may just be flashes in the pan. But right now, they have something people want.
* If you have something to sell-- as a business, an individual entrepreneur or a consultant--the Sales 100, Profit 100 and Employer 100 will direct you to state’s biggest companies by those yardsticks.
At the very least, these lists tell you which California-based companies have achieved a certain critical mass.
* For investors, the Great Expectations listings and High Fliers listing provide insight as to which up-and-coming California companies Wall Street has identified as particularly promising.
Whether analysts and investors have guessed correctly, of course, remains to be seen. But all investing amounts to an appraisal of the future--and the more educated an appraisal, the better.
* Also for investors, the list of Southern California’s biggest stock gainers over the last year shows where the most money has been made. If nothing else, the list is a reminder that the technology sector has no monopoly on hot stocks.
Admittedly, in an increasingly interwoven global economy, there’s a legitimate argument that any business listing based on the location of the physical headquarters of companies may be of limited value.
This section, which focuses on publicly held California-based companies, thus ignores the thousands of businesses that operate here but are headquartered elsewhere (including many of the top entertainment companies, for example).
By definition, the section also ignores the state’s many private concerns, some of which are very large indeed.
Still, this is California, not Rhode Island. The publicly held companies based here, given their size and scope, provide an excellent representation of the state’s multifaceted economy.
What’s more, judged by some other popular lists--the Fortune 500, for example--someone who didn’t know better might assume that California is some industrial also-ran among the states.
California accounts for an estimated 13% of U.S. economic output, but is home to just 10% of the Fortune 500 companies.
What the state lacks in terms of mega-company headquarters, however, it arguably has more than made up as a premier breeding ground for new businesses--many of which appear in lists in this section.
For investors who, thanks to technology, now can research and trade in shares of companies around the planet, there is no overwhelming argument for staying in one’s backyard--even when that backyard is as fertile a field as California.
Still, limiting oneself to California stocks in recent years is hardly the worst thing an investor could have done.
Consider: The Franklin Templeton California-250 stock index, primarily composed of companies based in the Golden State (and some others that do the bulk of their business here), handily beat the blue-chip Standard & Poor’s 500 stock index for the five years ended March 31, with a gain of 185% versus the S&P;’s 144%.
That’s a feat that the vast majority of money managers, picking from among stocks nationwide, did not accomplish.
Over the 12 months ended March 31, the California index gained 44%, just shy of the S&P;’s 46% rise.
What those numbers--and the listings in this section--remind us is that this state’s universe of public businesses is so difficult to summarize precisely because it is so rich with opportunity.
