THIRD QUARTER REPORT
SELIGMAN
CAPITAL
FUND, INC.
SEPTEMBER 30, 1995
[LOGO]
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A CAPITAL APPRECIATION FUND
ESTABLISHED IN 1969
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Capital Fund, Inc., which contains information about the sales charges,
management fee, and other costs. Please read the prospectus carefully before
investing or sending money.
EQCA3c 9/95
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TO THE SHAREHOLDERS
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We are pleased to update you on Seligman Capital Fund with this Third
Quarter Report. Your Fund outperformed the Standard & Poor's 500 Composite Stock
Price Index (S&P 500) in the third quarter. However, for the nine months ended
September 30, your Fund, as with many domestic equity mutual funds, lagged the
S&P 500, which posted exceptional gains during this period. The return of the
S&P 500 for the first nine months of the year was to a large extent driven by
the strength of the technology sector, particularly the continued momentum of
the U.S. semiconductor industry. For much of the nine months, your Fund was
underweighted in the technology sector. Your Fund's investment performance,
compared to the S&P 500, has been consolidated into a table which follows the
portfolio.
Your Fund's gain information is as follows: for Class A and D shares, net
realized gain per share from investment transactions for the first nine months
totaled $1.82. At September 30, net unrealized gain per share totaled $4.61. The
realized gain distribution for 1995 will be declared on November 16, and paid on
November 22.
Third quarter reports and statistics suggest that the U.S. economy is
maintaining its pattern of slow growth; for example, factory orders for consumer
goods rose at a tepid rate, as retailers continued to hold down inventories. In
addition, inflation remained benign and low interest rates prevailed, supported
by growing prospects for a deficit reduction plan that will curb government
spending in areas previously off limits -- such as entitlements. In the past, an
environment marked by such modest but sustained economic growth and subdued
inflation has proven very positive for financial markets.
Equity markets continued to be supported by increases -- albeit at a
decelerated rate -- in corporate earnings. Overall, stock valuations seem
reasonable based on estimated 1996 earnings, and equity markets should continue
to benefit from stable-to-lower interest rates and continued corporate
restructuring.
Your Fund held an underweighted position relative to the S&P 500 in the
technology sector in the first six months of the year. However, in the third
quarter, additions were made to this area, leading to an overweighted position
which boosted your Fund's return. As a result, while your Fund outperformed the
S&P 500 in the third quarter, it underperformed the Index for the nine months.
In the third quarter, an overweighted position in consumer cyclicals, such
as HFS Group, Borders Group, and CBS, provided strong returns. In addition, your
Manager took profits in underperforming health care holdings and used the
proceeds to buy consumer-related issues poised to benefit from the current
economic environment of slow growth.
Looking ahead, your Manager feels that your Fund is positioned to continue
to perform favorably.
For information about your Fund, or your investment in its shares, please
write, or call the toll-free telephone numbers listed below.
By order of the Board of Directors,
/s/ William C. Morris
Chairman
/s/ Brian T. Zino
President
October 27, 1995
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Important Telephone Numbers
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Shareholder
Services
(800) 221-2450
Retirement Plan
Services
(800) 445-1777
24-Hour Automated
Telephone Access Service
(800) 622-4597
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PORTFOLIO OF INVESTMENTS (unaudited)
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SHARES VALUE
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COMMON STOCKS 99.0%
APPAREL AND TEXTILES 1.6%
Tommy Hilfiger* ........................... 100,000 $ 3,250,000
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AUTOMOTIVE AND RELATED 4.8%
Cooper Tire & Rubber ...................... 125,000 3,031,250
Eaton ..................................... 65,000 3,445,000
Harley-Davidson ........................... 125,000 3,046,875
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9,523,125
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BASIC MATERIALS 4.2%
Minerals Technologies ..................... 75,000 2,821,875
Nucor ..................................... 70,000 3,132,500
Schulman, A ............................... 93,750 2,367,187
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8,321,562
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BUSINESS SERVICES AND SUPPLIES 2.4%
Interpublic Group of Companies ............ 120,000 4,770,000
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COMPUTER GOODS AND SERVICES 9.5%
Ceridian* ................................. 100,000 4,437,500
FIserv* ................................... 175,000 5,020,312
Intel ..................................... 100,000 6,018,750
LSI Logic* ................................ 25,000 1,443,750
MEMC Electronic Materials* ................ 81,600 2,213,400
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19,133,712
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CONSUMER GOODS AND SERVICES 5.6%
Block (H. & R.) ........................... 50,000 1,900,000
CUC International* ........................ 30,000 1,046,250
Department 56* ............................ 17,000 794,750
Newell .................................... 150,000 3,712,500
Oakley* ................................... 40,250 1,189,891
Tambrands ................................. 35,000 1,535,625
UST Inc. .................................. 40,000 1,145,000
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11,324,016
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DRUGS AND HEALTH CARE 12.8%
Amgen* .................................... 100,000 4,993,750
AmeriSource Health* ....................... 100,000 2,662,500
Bristol-Myers Squibb ...................... 50,000 3,643,750
Columbia / HCA Healthcare ................. 75,000 3,646,875
EmCare Holdings ........................... 65,000 1,425,938
Pediatrix Medical Group* .................. 39,500 807,281
Protein Design Labs* ...................... 100,000 1,968,750
Sunrise Medical* .......................... 100,000 2,750,000
United Healthcare ......................... 75,000 3,665,625
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25,564,469
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FINANCIAL SERVICES 4.9%
Checkfree* ................................ 50,000 1,009,375
Progressive (Ohio) ........................ 50,000 2,237,500
Travelers ................................. 125,000 6,640,625
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9,887,500
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FOOD AND FOOD SERVICES 2.8%
PepsiCo ................................... 110,000 5,610,000
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INDUSTRIAL GOODS AND SERVICES 3.6%
Lam Research* ............................. 65,000 3,875,625
UCAR International* ....................... 125,000 3,406,250
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7,281,875
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LEISURE AND RELATED 12.1%
British Sky Broadcasting (ADRs)* .......... 60,000 2,167,500
CBS ....................................... 50,000 3,993,750
Circus Circus Enterprises* ................ 50,000 1,400,000
Electronic Arts* .......................... 25,000 917,188
HFS Group* ................................ 125,000 6,546,875
Infinity Broadcasting* .................... 66,500 2,177,875
Mirage Resorts* ........................... 100,000 3,287,500
Viacom (Class B) .......................... 75,000 3,731,250
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24,221,938
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PACKAGING 2.5%
Ball ...................................... 75,000 2,221,875
Crown Cork & Seal* ........................ 70,000 2,712,500
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4,934,375
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RETAIL TRADE 7.9%
Borders Group* ............................ 200,000 3,425,000
Gymboree* ................................. 50,000 1,500,000
Home Depot ................................ 100,000 3,987,500
Nordstrom ................................. 75,000 3,135,937
Office Depot* ............................. 125,000 3,765,625
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15,814,062
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SOFTWARE 12.9%
Activision* ............................... 101,000 1,609,688
Comshare* ................................. 100,000 2,912,500
Informix* ................................. 125,000 4,078,125
Microsoft* ................................ 40,000 3,622,500
Parametric Tehnology* ..................... 65,000 4,013,750
Sybase* ................................... 100,000 3,206,250
Symantec* ................................. 150,000 4,490,625
Synopsys* ................................. 60,000 1,860,000
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25,793,438
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September 30, 1995
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SHARES VALUE
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TELECOMMUNICATIONS 11.4%
AVX* ...................................... 100,500 $ 3,366,750
Century Telephone Enterprises ............. 100,000 3,037,500
DSC Communications* ....................... 90,000 5,338,125
Motorola .................................. 80,000 6,110,000
Scientific-Atlanta ........................ 100,000 1,687,500
WorldCom* ................................. 105,000 3,386,250
22,926,125
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OTHER ..................................... 67,318
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TOTAL COMMON STOCKS 99.0%
(Cost $142,076,514) ...................... 198,423,515
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SHORT-TERM HOLDINGS 3.8%
(Cost $7,595,000) ................. 7,595,000
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TOTAL INVESTMENTS 102.8%
(Cost $149,671,514) .............. 206,018,515
OTHER ASSETS
LESS LIABILITIES .......................... (2.8)% (5,521,238)
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NET ASSETS ................................ 100.0% $200,497,277
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* Non-income producing security.
Note: Investments in stocks are valued at current market values or, in their
absence, at fair values determined in accordance with procedures approved by the
Board of Directors. Securities traded on national exchanges are valued at last
sales prices or, in their absence and in the case of over-the-counter
securities, a mean of bid and asked prices. Short-term holdings maturing in 60
days or less are valued at amortized cost.
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LARGEST PORTFOLIO CHANGES#
DURING PAST THREE MONTHS
SHARES
-----------------------------
HOLDINGS
ADDITIONS INCREASE 9/30/95
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AVX ....................................... 100,500 100,500
Comshare .................................. 100,000 100,000
Infinity Broadcasting ..................... 66,500 66,500
Progressive (Ohio) ........................ 50,000 50,000
Scientific-Atlanta ........................ 100,000 100,000
Symantec .................................. 150,000 150,000
Tommy Hilfiger ............................ 100,000 100,000
UCAR International ........................ 125,000 125,000
Viacom (Class B) .......................... 75,000 75,000
WorldCom .................................. 105,000 105,000
HOLDINGS
REDUCTIONS DECREASE 9/30/95
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Dentsply International .................... 70,000 --
EMC ....................................... 200,000 --
General Cable (ADSs) ...................... 100,000 --
Intel ..................................... 20,000 100,000
Leggett & Platt ........................... 45,000 --
Louisiana Pacific ......................... 100,000 --
Microsoft ................................. 35,000 40,000
Nordson ................................... 50,000 --
UST Inc. .................................. 100,000 40,000
Value Health .............................. 75,000 --
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# Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
MAJOR PORTFOLIO HOLDINGS
AT SEPTEMBER 30, 1995
SECURITY VALUE
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Travelers ...................................................... $6,640,625
HFS Group ...................................................... 6,546,875
Motorola ....................................................... 6,110,000
Intel .......................................................... 6,018,750
PepsiCo ........................................................ 5,610,000
DSC Communications ............................................. 5,338,125
FIserv ......................................................... 5,020,312
Amgen .......................................................... 4,993,750
Interpublic Group of Companies ................................. 4,770,000
Symantec ....................................................... 4,490,625
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SELIGMAN CAPITAL FUND
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INVESTMENT RESULTS
TOTAL RETURNS*
FOR PERIODS ENDED SEPTEMBER 30, 1995
AVERAGE ANNUAL
-------------------------------------
CLASS D
THREE NINE ONE FIVE TEN SINCE
MONTHS MONTHS YEAR YEARS YEARS INCEPTION+
------ ------ ---- ----- ----- ----------
Class A
With Sales Charge 3.39% 19.09% 18.84% 18.61% 13.83% n/a
8.57 25.06 24.75 19.76 14.38 n/a
Class D
With CDSL 7.38 23.10 22.28 n/a n/a n/a
Without CDSL 8.38 24.10 23.28 n/a n/a 8.76%
S&P 500** 7.95 29.77 29.75 17.23 15.98 15.63++
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NET ASSET VALUE PER SHARE
SEPTEMBER 30, 1995 JUNE 30, 1995 DECEMBER 31, 1994
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CLASS A $16.47 $15.17 $13.17
CLASS D $15.91 $14.68 $12.82
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* The returns for Class A shares are shown with and without the maximum initial
sales charge of 4.75%. No adjustment was made to performance for periods
prior to January 1, 1993, the commencement date for the annual
Administration, Shareholder Services and Distribution Plan fee of up to 0.25%
of average daily net assets of Class A shares. The returns for the periods of
one year or less for Class D shares are shown with and without the effect of
the 1% contingent deferred sales load ("CDSL") imposed on certain shares
redeemed within one year of purchase.
** The S&P 500 is an unmanaged index and assumes reinvestment of estimated
dividends and does not reflect fees and expenses. Investors may not invest
directly in an index.
+ May 3, 1993.
++ From April 30, 1993.
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These rates of return reflect changes in price and assume that all distributions
within the period are reinvested in additional shares. The rates of return will
vary and the principal value of an investment will fluctuate. Shares, if
redeemed, may be worth more or less than their original cost. Past performance
is not indicative of future investment results.
