DREYFUS GROWTH OPPORTUNITY FUND, INC. FEBRUARY 28, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
GROWTH OPPORTUNITY FUND, INC.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
(Exhibit A)
Past performance is not predictive of future performance.
The above illustration compares a $10,000 investment made in the
Dreyfus Growth Opportunity Fund on 2/4/72 (Inception Date) to a $10,000
investment made in the Standard and Poor's 500 Composite Stock Price
Index on that date. For comparative purposes the value of the Index on
1/31/72 is used as the beginning value on 2#/4/72. All dividends and
capital gain distributions are reinvested.
The Fund's performance takes into account all applicable fees and
expenses. The Standard and Poor's 500 Composite Stock Price Index is a
widely-accepted, unmanaged index of overall stock market performance
which does not take into account charges, fees and other expenses. Further
information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Condensed Financial
Information section of the Prospectus and elsewhere in this report.
*Source: Lipper Analytical Services, Inc.
DREYFUS GROWTH OPPORTUNITY FUND, INC. FEBRUARY 28, 1994
BROAD SECTOR ALLOCATION*
(Exhibit B)
Sector allocations in the pie chart are broader groupings than are listed in
the Report's Statement of Investments. Portfolio composition is subject
to change at any time.
ASSET ALLOCATION*
Common Stocks............................. 88.1%
Cash Equivalents.......................... 11.9
------
100.0%
TEN LARGEST EQUITY HOLDINGS*
Coastal................................... 2.4%
NEXTEL Communications, Cl. A.............. 2.2
Columbia/HCA Healthcare................... 2.1
Boeing.................................... 2.1
Phillips Petroleum........................ 2.0
NovaCare 2.0
Telefonos de Mexico ADS................... 2.0
Nucor..................................... 1.9
BMC Software.............................. 1.9
Consolidated Papers....................... 1.9
* As a percentage of Total Net Assets.
PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to send you this annual report on the investments of
Dreyfus Growth Opportunity Fund for the fiscal year ended February 28,
1994.
Although the Fund's objectives and policies remain the same, the
Fund's investment approach changed in January when Ernest Wiggins took
over as the Fund's primary portfolio manager. Mr. Wiggins brings to
Dreyfus a distinguished background as an investment executive.
For the 12-month fiscal period, including two months under Mr.
Wiggins' management, the Fund achieved a total return of 11.07%.* This
compares with 8.32% for the Standard & Poor's 500 Composite Stock Price
Index and 16.86% for the Dow Jones Industrial Average for the same 12
months.**
During the 12-month period under review, the Fund operated in an
environment characterized by gradual expansion of the economy with few
visible signs of inflation either in prices or wages. The first "preemptive
strike" by the Federal Reserve Board to raise interest rates took place a
few weeks before the end of the Fund's fiscal year. Stock prices declined
as a result, but still leaving the broad market averages _ and total return
of the Fund _ well ahead for the fiscal year period.
The general outlook of Mr. Wiggins is for the global economy to
continue to expand during 1994. He expects that looking further out, it is
entirely possible for the world economy to show continued growth for
some time as, he believes, the recessions in Continental Europe and Japan
will come to an end by late this year or early 1995. Further, in his view,
the emerging markets of Latin America and Asia are likely to resume their
strong growth patterns. At home, Mr. Wiggins believes the current trend-
line growth of the U.S. economy should continue on its present course.
The list of the ten largest equity holdings in the Fund (included
elsewhere in this Report) reflects the changes in the makeup of the
portfolio that have been made during the year, particularly since January
1, 1994.
Technology continues to be a very important growth sector for the
Fund. However, the types of technology issues we hold have been changed,
placing less emphasis on electronic technology and more on other types of
technology. A shift has been made to reflect our belief that, currently,
greater appreciation potential lies in some of the slower but more
consistent growers and away from very high-growth, high-multiple
stocks. As a consequence, the Fund cut back positions in Cisco Systems
and Wellfleet Communications. In contrast, BMC Software (1.9% of net
assets) and Novell (1.1%) are both companies that we believe should see
accelerating earnings growth from current levels, and are more
attractively priced.
In the Telecommunications sector, we added positions in NEXTEL
Communications (2.2%) and CenCall Communications (.3%), two companies
which should benefit from the evolving market for digital cellular
communications.
The technology and telecommunications exposure had been increased
aggressively in the first half of the fiscal year in expectation of
continued strong trends in computer, component and software shipments.
This concentrated weighting had a positive impact on performance
reaching a valuation peak late in the third calendar quarter. This coincided
with the telecommunications hysteria surrounding the proposed merger
between Viacom International and Paramount and very strong year-to-year
comparisons in computer and related equipment shipments. Subsequently,
fourth calendar quarter performance was negatively impacted by a
downward revision of valuations following a slowing in industry
shipments and a return to more rational valuation levels.
The health care industry appears to us to present selective but
potentially exciting investment promise. As background, it is our belief
that whether or not new health care legislation is enacted by Congress,
demand for health services will steadily increase as the country's
population ages. Massive consolidation and restructuring is under way in
the health care industry, and we believe that companies that can cut
costs, drive up productivity through increasing capacity utilization, and
develop health care networks are strongly positioned for earnings growth
in 1994. We have chosen to focus on health care companies which have
state-of-the-art information systems and strong management, and are
low-cost providers in their respective health care areas. As a result, one
of our major new holdings is Columbia/HCA Healthcare (2.1% of net
assets), a leader in the hospital management field.
Earlier, due to the unprecedented scrutiny of the health care
industry by the U.S. Government and the public at large, positions were
eliminated or reduced in Medtronics and U.S. Surgical in medical devices;
Amgen and Synergen in biotechnology; Quantum Health Resources and U.S.
Healthcare in services.
In recent months, we have constructed a meaningful position in
energy stocks. The management teams of these companies have
demonstrated the ability to grow their asset bases during some very
trying times for the energy sector. It is now our opinion that the
fundamentals for energy are poised to improve.
The outlook for natural gas has improved to a point where we believe
that the "bubble" is close to ending. As a result, we anticipate improved
pricing in the future. Oil, on the other hand, is in surplus. However, our
work indicates that the surplus is not as large as the markets suggest and
that equilibrium could occur sooner rather than later. The combination of
asset growth and improving industry fundamentals suggests a brighter
outlook for the energy sector.
Some of the recent portfolio restructuring reflects our belief that
significant portions of the U.S. industrial sector are now much more
rigorous global competitors. This new competitive position is the result
of U.S. management's recent heavy emphasis on productivity and cost
cutting as a way to increase corporate profits in a tepid domestic
economy. Now select U.S. industries stand to benefit from our expectation
of a stronger global economic expansion.
Important new positions in basic industry and manufacturing that
stand to gain from an economic expansion here and abroad include Boeing
(2.1% of net assets), Consolidated Papers (1.9%), Cooper Industries (1.8%),
CBI Industries (1.5%), Georgia Gulf (1.3%), Geon (1.1%) and BWIP Holdings
(1.0%).
It is important to note that our positive outlook for the global
economy does not place much reliance on the U.S. consumer. Accordingly,
we have cut back our investments in the consumer areas. These reductions
began during the latter part of 1993. Consumer product companies
Maybelline, Tambrands, Sarah Lee, and Nike were eliminated due to
expected margin pressures commensurate with a hostile pricing
environment. Home Depot and Toys `R Us were eliminated due to high
valuations and slowing profit trends for the foreseeable future.
During the latter part of calendar 1993, our investment in the
gaming industry underwent significant selling pressures. This was due to
delay in jurisdictional expansion and earnings shortfalls. President's
Riverboat Casinos, Showboat, Circus Circus Enterprises, Boomtown and
International Game Technology all underwent sharp price declines. Early in
1994, all the Fund's investments in the gaming industry were eliminated,
basically due to our perception of speculative excesses reflected in their
stock prices.
As the fiscal year ended, about twelve percent of assets were in
cash equivalents, a reserve that can be drawn on to make new investments
as attractive situations arise.
We appreciate the opportunity to invest assets on your behalf. If you
have any comments on the new directions taken by the Fund, please do not
hesitate to write to us.
Sincerely,
(LOGO SIGNATURE)
Howard Stein
President
March 15, 1994
New York, N.Y.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the
reinvestment of income dividends and, where applicable, capital gain
distributions. Both the Dow Jones Industrial Average and the Standard &
Poor's 500 Composite Stock Price Index are widely accepted unmanaged
indexes of stock market performance.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS FEBRUARY 28, 1994
COMMON STOCKS-88.1% SHARES VALUE
------------ -------------
<S> <S> <C> <C>
BASIC INDUSTRIES-4.9% Alcan Aluminium Ltd................ 65,000 $ 1,543,750
Aluminum Co. of America............ 40,000 3,010,000
LTV................................ 100,000 (a) 1,650,000
Lukens............................. 110,000 4,028,750
National Steel, Cl. B.............. 135,000 (a) 1,940,625
Nucor.............................. 155,000 8,970,625
Webco Industries................... 108,100 (a) 1,702,575
-------------
22,846,325
-------------
COMMUNICATIONS-3.8% CenCall Communications............. 50,000 (a) 1,425,000
IDB Communications Group........... 203,500 (a) 3,663,000
MFS Communications................. 75,000 (a) 2,437,500
NEXTEL Communications, Cl. A....... 230,000 (a) 10,177,500
-------------
17,703,000
-------------
CONSUMER CYCLICAL-2.6% Singer Co. N.V..................... 105,000 3,937,500
Whirlpool.......................... 120,000 8,130,000
-------------
12,067,500
-------------
CONSUMER SERVICES-2.7% CUC International.................. 160,000 (a) 4,800,000
Disney (Walt)...................... 125,000 6,015,625
Viacom, Cl. A...................... 50,000 (a) 1,637,500
-------------
12,453,125
-------------
CONSUMER STAPLES-3.0% Dean Foods......................... 110,000 3,465,000
PepsiCo............................ 120,000 4,695,000
Pet................................ 250,000 4,906,250
Tyson Foods, Cl. A................. 40,000 860,000
-------------
13,926,250
-------------
ENERGY-13.6% Amerada Hess....................... 120,000 5,565,000
Apache............................. 300,000 7,500,000
Arethusa OFF-Shore................. 420,500 (a) 4,520,375
Baker Hughes....................... 270,000 5,130,000
Coastal............................ 350,000 11,025,000
Dual Drilling...................... 105,000 (a) 1,168,125
Halliburton........................ 200,000 6,275,000
Noble Drilling..................... 250,000 (a) 2,031,250
Oryx Energy........................ 450,000 8,100,000
Phillips Petroleum................. 350,000 9,493,750
Weatherford International.......... 225,000 (a) 2,362,500
-------------
63,171,000
-------------
FINANCE-2.5% ADVANTA, Cl. B..................... 230,000 6,497,500
First Chicago...................... 100,000 4,887,500
-------------
11,385,000
-------------
HEALTH CARE-20.1% Athena Neurosciences............... 105,000 (a) 958,125
Caremark International............. 100,300 2,168,988
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ -------------
HEALTH CARE (CONTINUED) Charter Medical.................... 70,000 (a) $ 1,636,250
Chiron............................. 100,000 (a) 7,750,000
Columbia/HCA Healthcare............ 225,000 9,675,000
Community Psychiatric Centers...... 450,000 8,043,750
Genelabs Technologies.............. 166,667(a)(b) 581,251
Gensia............................. 200,000 (a) 4,200,000
Genzyme............................ 35,000 (a) 997,500
IMCERA Group....................... 70,000 2,598,750
IVAX............................... 80,000 2,810,000
Immunex............................ 185,000 (a) 2,913,750
Johnson & Johnson.................. 65,000 2,608,125
Magainin Pharmaceuticals........... 75,000 (a) 1,078,125
Medical Care America............... 150,000 (a) 3,693,750
NovaCare........................... 525,000 (a) 9,450,000
OrNda Healthcorp................... 250,000 (a) 4,687,500
Pfizer............................. 40,000 2,320,000
Roche Holdings ADS................. 45,000 (a) 2,199,375
Schering-Plough.................... 45,000 2,688,750
T2 Medical......................... 260,000 2,177,500
Teva Pharmaceutical Industries ADR. 75,000 2,503,125
United Healthcare.................. 70,000 5,783,750
Ventritex.......................... 210,000 (a) 5,880,000
Vical.............................. 75,000 (a) 900,000
Warner-Lambert..................... 45,000 2,863,125
-------------
93,166,489
-------------
INDUSTRIAL SERVICES-3.8% CBI Industries..................... 200,600 6,745,175
Sensormatic Electronics............ 150,000 5,437,500
WMX Technologies................... 215,000 5,294,375
-------------
17,477,050
-------------
PROCESS INDUSTRIES-7.0% Consolidated Papers................ 190,000 8,621,250
Geon............................... 190,000 5,130,000
Georgia Gulf....................... 205,000 (a) 5,842,500
Grace (W.R.)....................... 130,000 5,817,500
Witco.............................. 200,000 6,775,000
-------------
32,186,250
-------------
PRODUCER MANUFACTURING-7.0% BWIP Holdings, Cl. A............... 235,000 4,758,750
Boeing............................. 205,000 9,583,750
Coltec Industries.................. 60,000 (a) 1,192,500
Cooper Industries.................. 220,000 8,525,000
Dover.............................. 50,000 3,062,500
Eaton.............................. 65,000 3,761,875
TRINOVA............................ 40,000 1,505,000
-------------
32,389,375
-------------
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ -------------
RETAIL TRADE-4.2% Lowe's............................. 85,000 $ 5,620,625
Penney (J.C.)...................... 100,000 5,475,000
Wal-Mart Stores.................... 300,000 8,512,500
-------------
19,608,125
-------------
TECHNOLOGY-8.8% BMC Software....................... 130,000 (a) 8,937,500
BroadBand Technologies............. 135,000 (a) 3,408,750
Cabletron Systems.................. 20,000 (a) 2,500,000
Cheyenne Software.................. 100,000 (a) 4,025,000
Cisco Systems...................... 30,000 (a) 2,212,500
Intel.............................. 50,000 3,437,500
Madge N.V.......................... 170,000 (a) 3,060,000
Novell............................. 200,000 (a) 5,100,000
Oracle Systems..................... 50,000 (a) 1,650,000
Wellfleet Communications........... 30,000 (a) 2,385,000
Xilinx............................. 70,000 (a) 3,815,000
-------------
40,531,250
-------------
TRANSPORTATION-2.1% Canadian Pacific................... 410,000 7,072,500
Overseas Shipholding Group......... 112,000 2,604,000
-------------
9,676,500
-------------
UTILITIES-2.0% Telefonos de Mexico ADS............ 140,000 9,397,500
-------------
TOTAL COMMON STOCKS
(cost $378,820,192)............. $ 407,984,739
=============
PRINCIPAL
SHORT_TERM INVESTMENTS-10.1% AMOUNT
------------
TIME DEPOSITS-2.0% Chemical Bank (London),
3 7/8%, 3/1/94.................$ 9,373,000 $ 9,373,000
-------------
U.S. GOVERNMENT AGENCIES-8.1% Federal National Mortgage Association,
Discount Notes, 3.35%, 3/1/94.. 37,625,000 37,625,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(cost $46,998,000)............. $ 46,998,000
=============
TOTAL INVESTMENTS (cost $425,818,192)........................... 98.2% $ 454,982,739
====== =============
CASH AND RECEIVABLES (NET)...................................... 1.8% $ 8,339,876
====== =============
NET ASSETS...................................................... 100.0% $ 463,322,615
====== =============
</TABLE>
<TABLE>
<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security restricted as to public resale;
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
----------- -------- -------------- -----------
<S> <C> <C> <C> <C>
Genelabs Technologies 3/1/91 $9.00 .13% $3.487 per share
* The valuation of this security has been determined in good faith under the direction of the
Board of Directors.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $425,818,192)-see statement...................................... $454,982,739
Cash....................................................................... 12,282,468
Receivable for investment securities sold.................................. 4,119,870
Dividends and interest receivable.......................................... 571,824
Receivable for subscriptions to Common Stock............................... 4,850
Prepaid expenses and other assets.......................................... 123,791
------------
472,085,542
LIABILITIES:
Due to The Dreyfus Corporation............................................. $ 357,044
Payable for investment securities purchased................................ 8,078,287
Payable for Common Stock redeemed.......................................... 77,621
Accrued expenses........................................................... 249,975 8,762,927
------------ ------------
NET ASSETS..................................................................... $463,322,615
============
REPRESENTED BY:
Paid-in capital............................................................ $370,194,807
Accumulated undistributed investment income_net-Note 1(d).................. 47,598
Accumulated undistributed net realized gain on investments-Note 1(d)....... 63,915,663
Accumulated net unrealized appreciation on investments-Note 3.............. 29,164,547
------------
NET ASSETS at value applicable to 42,550,551 shares outstanding
(100 million shares of $.01 par value Common Stock authorized)............. $463,322,615
============
NET ASSET VALUE, offering and redemption price per share
($463,322,615 / 42,550,551 shares)......................................... $10.89
======
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1994
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $21,604 foreign taxes withheld at source)....... $ 3,014,945
Interest............................................................... 1,766,556
------------ ------------
TOTAL INCOME....................................................... $ 4,781,501
EXPENSES:
Management fee-Note 2(a)............................................... 3,784,920
Shareholder servicing costs-Note 2(b).................................. 1,397,811
Custodian fees......................................................... 83,714
Prospectus and shareholders' reports................................... 76,850
Professional fees...................................................... 56,241
Directors' fees and expenses-Note 2(c)................................. 50,504
Registration fees...................................................... 35,145
Miscellaneous.......................................................... 4,142
------------
TOTAL EXPENSES..................................................... 5,489,327
------------
INVESTMENT (LOSS)-NET.............................................. (707,826)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3.................................... $110,183,296
Net unrealized (depreciation) on investments............................... (55,908,346)
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.................... 54,274,950
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 53,567,124
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED FEBRUARY 28,
----------------------------
1993 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)-net............................................... $ 656,053 $ (707,826)
Net realized gain on investments........................................... 71,371,112 110,183,296
Net unrealized (depreciation) on investments for the year.................. (114,060,997) (55,908,346)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........ (42,033,832) 53,567,124
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net...................................................... (974,084) ---
Net realized gain on investments........................................... --- (101,875,165)
------------ ------------
TOTAL DIVIDENDS........................................................ (974,084) (101,875,165)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.............................................. 1,675,754,905 399,371,920
Dividends reinvested....................................................... 935,608 98,932,125
Cost of shares redeemed.................................................... (1,695,327,535) (556,464,733)
------------ ------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............... (18,637,022) (58,160,688)
------------ ------------
TOTAL (DECREASE) IN NET ASSETS..................................... (61,644,938) (106,468,729)
NET ASSETS:
Beginning of year.......................................................... 631,436,282 569,791,344
------------ ------------
End of year (including undistributed investment income-net; $47,598
in 1993 and 1994)...................................................... $569,791,344 $463,322,615
============ ============
SHARES SHARES
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................ 136,021,435 32,987,816
Shares issued for dividends reinvested..................................... 71,869 8,859,503
Shares redeemed............................................................ (137,273,174) (45,962,792)
------------ ------------
NET (DECREASE) IN SHARES OUTSTANDING................................... (1,179,870) (4,115,473)
============ ============
See notes to financial statements.
</TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY,
------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $10.42 $ 9.77 $10.27 $13.20 $12.21
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income (loss)-net........... .42 .24 .11 .01 (.02)
Net realized and unrealized gain
(loss) on investments.............. .20 .56 2.95 (.98) 1.30
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS... .62 .80 3.06 (.97) 1.28
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net... (.46) (.28) (.13) (.02) --
Dividends from net realized gain on
investments........................ (.81) (.02) -- -- (2.60)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................ (1.27) (.30) (.13) (.02) (2.60)
------ ------ ------ ------ ------
Net asset value, end of year........... $ 9.77 $10.27 $13.20 $12.21 $10.89
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 5.71% 8.53% 29.91% (7.36%) 11.07%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.00% .98% .95% 1.00% 1.09%
Ratio of net investment income (loss)
to average net assets.............. 3.13% 2.32% .85% .11% (.14%)
Portfolio Turnover Rate................ 126.11% 146.93% 56.95% 90.03% 194.59%
Net Assets, end of year (000's Omitted) $525,529 $511,854 $631,436 $569,791 $463,323
See notes to financial statements.
</TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company.
Dreyfus Service Corporation ("Distributor") acts as the exclusive
distributor of the Fund's shares, which are sold to the public without a
sales charge. The Distributor is a wholly-owned subsidiary of The Dreyfus
Corporation ("Manager").
(A) PORTFOLIO VALUATION: Investments in securities (including
options) are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on
the national securities market. Securities not listed on an exchange or the
national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Securities for
which there are no such valuations are valued at fair value as determined
in good faith under the direction of the Board of Directors. Short-term
investments are carried at amortized cost, which approximates value.
Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of discounts on
investments, is recognized on the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net and dividends from
net realized capital gain are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund had a net operating loss from investment income_net of
$707,826 for the fiscal year ending February 28, 1994. Net operating
losses from investment income_net are not deductible for federal income
tax purposes and can not be carried forward to any future tax year.
However, to the extent that a Fund has distributable short-term gains, a
net operating loss from investment income_net may be offset against
those gains. Since the Fund had distributable short-term gains in excess
of that amount, $707,826 was charged to accumulated undistributed net
realized gain on investments.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of 3/4 of 1%
of the average daily value of the Fund's net assets and is payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage commissions and extraordinary expenses, exceed 1
1/2% of the average value of the Fund's net assets for any full fiscal year.
No expense reimbursement was required for the year ended February 28,
1994.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund
reimburses the Distributor an amount not to exceed an annual rate of .25
of 1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the
year ended February 28, 1994, the Fund was charged an aggregate of
$645,374 pursuant to the Shareholder Services Plan.
(C) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each director
who is not an "affiliated person" receives an annual fee of $4,500 and an
attendance fee of $500 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for the merger of the
Manager with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the Stockholders of the Manager and of Mellon. The
merger is expected to occur in mid-1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's board
and shareholders before completion of the merger. Shareholder approval
will be solicited by a proxy statement.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the year ended February 28,
1994, amounted to $859,542,414 and $915,449,540, respectively.
At February 28, 1994, accumulated net unrealized appreciation on
investments was $29,164,547, consisting of $39,760,723 gross
unrealized appreciation and $10,596,176 gross unrealized depreciation.
At February 28, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS GROWTH OPPORTUNITY FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS GROWTH OPPORTUNITY FUND, INC.
We have audited the accompanying statement of assets and liabilities
of Dreyfus Growth Opportunity Fund, Inc., including the statement of
investments, as of February 28, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of February 28, 1994 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Growth Opportunity Fund, Inc. at February 28, 1994,
the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
New York, New York
March 31, 1994
DREYFUS GROWTH OPPORTUNITY FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal Tax purposes the Fund hereby designates $1.56 per share as
a long-term capital gain distribution paid on November 5, 1993. The Fund
also designates $1.04 per share as a long-term capital gain distribution
paid on December 28, 1993.
(Dreyfus Lion Logo)
Growth
Opportunity
Fund, Inc.
Annual Report
February 28, 1994
(Dreyfus Lion "D" Logo)
Dreyfus Growth
Opportunity Fund, Inc.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
110 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 018AR942
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GROWTH OPPORTUNITY FUND, INC.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX
EXHIBIT A:
___________________________________________
| | STANDARD | |
| | & POOR'S 500 | |
| PERIOD |COMPOSITE STOCK| DREYFUS GROWTH |
| | PRICE INDEX * |OPPORTUNITY FUND|
| ---------|---------------|----------------|
| 2/4/72 | 10,000 | 10,000 |
| 2/28/72 | 10,278 | 9,960 |
| 5/31/72 | 10,638 | 10,320 |
| 8/31/72 | 10,868 | 10,100 |
| 11/30/72 | 11,498 | 10,080 |
| 2/28/73 | 11,080 | 8,820 |
| 5/31/73 | 10,491 | 7,460 |
| 8/31/73 | 10,504 | 7,560 |
| 11/30/73 | 9,754 | 7,220 |
| 2/28/74 | 9,867 | 7,160 |
| 5/31/74 | 9,037 | 6,895 |
| 8/31/74 | 7,557 | 6,384 |
| 11/30/74 | 7,430 | 6,322 |
| 2/28/75 | 8,770 | 7,080 |
| 5/31/75 | 9,901 | 8,129 |
| 8/31/75 | 9,534 | 8,171 |
| 11/30/75 | 10,118 | 8,618 |
| 2/28/76 | 11,164 | 10,682 |
| 5/31/76 | 11,325 | 10,209 |
| 8/31/76 | 11,747 | 10,359 |
| 11/30/76 | 11,777 | 11,154 |
| 2/28/77 | 11,635 | 11,262 |
| 5/31/77 | 11,334 | 11,429 |
| 8/31/77 | 11,544 | 12,016 |
| 11/30/77 | 11,464 | 12,472 |
| 2/28/78 | 10,665 | 12,211 |
| 5/31/78 | 12,072 | 15,740 |
| 8/31/78 | 12,987 | 18,155 |
| 11/30/78 | 12,070 | 15,193 |
| 2/28/79 | 12,439 | 16,628 |
| 5/31/79 | 12,976 | 18,000 |
| 8/31/79 | 14,512 | 20,375 |
| 11/30/79 | 14,290 | 21,350 |
| 2/28/80 | 15,502 | 26,924 |
| 5/31/80 | 15,392 | 25,562 |
| 8/31/80 | 17,156 | 30,735 |
| 11/30/80 | 19,884 | 37,030 |
| 2/28/81 | 18,848 | 33,910 |
| 5/31/81 | 19,272 | 36,214 |
| 8/31/81 | 18,083 | 31,752 |
| 11/30/81 | 18,868 | 30,912 |
| 2/28/82 | 17,130 | 26,074 |
| 5/31/82 | 17,204 | 25,628 |
| 8/31/82 | 18,664 | 25,727 |
| 11/30/82 | 21,923 | 30,306 |
| 2/28/83 | 23,707 | 34,885 |
| 5/31/83 | 26,289 | 40,039 |
| 8/31/83 | 26,904 | 40,386 |
| 11/30/83 | 27,529 | 41,186 |
| 2/28/84 | 26,273 | 39,066 |
| 5/31/84 | 25,488 | 36,527 |
| 8/31/84 | 28,559 | 38,707 |
| 11/30/84 | 28,353 | 35,456 |
| 2/28/85 | 31,753 | 37,827 |
| 5/31/85 | 33,579 | 39,647 |
| 8/31/85 | 33,726 | 41,468 |
| 11/30/85 | 36,566 | 45,513 |
| 2/28/86 | 41,429 | 49,397 |
| 5/31/86 | 45,548 | 54,123 |
| 8/31/86 | 46,969 | 54,033 |
| 11/30/86 | 46,677 | 54,303 |
| 2/28/87 | 53,651 | 61,723 |
| 5/31/87 | 55,185 | 66,553 |
| 8/31/87 | 63,182 | 73,823 |
| 11/30/87 | 44,493 | 52,963 |
| 2/28/88 | 52,203 | 61,686 |
| 5/31/88 | 51,587 | 63,912 |
| 8/31/88 | 51,928 | 64,668 |
| 11/30/88 | 54,851 | 65,868 |
| 2/28/89 | 58,400 | 71,300 |
| 5/31/89 | 65,396 | 76,843 |
| 8/31/89 | 72,276 | 78,896 |
| 11/30/89 | 71,741 | 77,002 |
| 2/28/90 | 69,417 | 75,369 |
| 5/31/90 | 76,241 | 80,615 |
| 8/31/90 | 68,670 | 72,515 |
| 11/30/90 | 69,254 | 71,891 |
| 2/28/91 | 79,579 | 81,796 |
| 5/31/91 | 85,213 | 86,814 |
| 8/31/91 | 87,114 | 92,229 |
| 11/30/91 | 83,316 | 95,591 |
| 2/28/92 | 92,280 | 106,260 |
| 5/31/92 | 93,600 | 98,290 |
| 8/31/92 | 94,012 | 96,036 |
| 11/31/92 | 98,684 | 104,811 |
| 2/28/93 | 102,099 | 98,441 |
| 5/31/93 | 104,447 | 101,666 |
| 8/31/93 | 108,280 | 107,149 |
| 11/30/93 | 108,627 | 105,003 |
| 2/28/94 | 110,611 | 109,342 |
| ___________________________________________
| -----------------------------------------------------------|
| DREYFUS GROWTH OPPORTUNITY FUND |
| -----------------------------------------------------------|
| AVERAGE ANNUAL TOTAL RETURNS ENDED ON 2/28/94 |
| -----------------------------------------------------------|
| | | |SINCE INCEPTION |
| 1 YEAR | 5 YEAR | 10 YEAR | (2/4/72) |
| ---------|---------------|----------------|----------------|
| 11.07%| 8.93%| 10.84%| 11.45% |
| -----------------------------------------------------------|
