DREYFUS GROWTH OPPORTUNITY FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The following letter is signed by Timothy M. Ghriskey, who assumed
management of Dreyfus Growth Opportunity Fund, Inc. on September 11, 1995.
This annual report covers the fiscal year that began March 1, 1995 and ended
February 29, 1996.
Tim joined the Dreyfus investment staff in the summer of 1995, as a
Senior Equity Portfolio Manager. Before joining Dreyfus, he spent ten years
with Loomis, Sayles & Company as both an equity and a balanced portfolio
manager. At his prior firm, Tim was an Associate Managing Partner and a
member of the Investment Policy Committee and the Planning Committee. He
began his investment career as an equity analyst following a number of
industries, including beverage, tobacco, leisure, entertainment, home products,
cosmetics, metals and mining.
Tim is a graduate of Trinity College and received his M.B.A. from the
Darden School at the University of Virginia. He is a Chartered Financial
Analyst and a Chartered Investment Counselor.
We are delighted that Tim Ghriskey is now a member of the Dreyfus
investment management team.
Sincerely,
[Stephen Canter signature logo]
Stephen Canter
Chief Investment Officer
The Dreyfus Corporation
DREYFUS GROWTH OPPORTUNITY FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
It is a pleasure to send you this annual report of the Dreyfus Growth
Opportunity Fund, Inc., covering the fiscal year ended February 29, 1996. For
somewhat less than half of the fiscal period, the Fund has been under new
management, using a disciplined approach to value investing. This investment
style seeks undervalued securities with the opportunity for growth.
After restructuring the Fund, which took about a month and a half,
performance has been off to a good start. For the three-month period ended
February 29, 1996, the total return for the Fund was 7.42%* compared to 6.37%
for the Standard & Poor's 500 Composite Stock Price Index.** Including a
substantial period of time under the former portfolio manager, the Fund's
twelve-month total return was 27.37%* compared to 34.66% for the Standard &
Poor's 500 Index.**
ECONOMIC REVIEW
The U.S. economy grew slightly below its 2.5% trend rate during the last
six months, reflecting an improvement compared to the first half of 1995.
Inflation was well behaved, reducing expectations for price increases in the
months ahead. Corporate profits, strong for most of 1995, slowed towards
year-end. Near-trend growth and low inflation helped pull interest rates down
sharply by this January. Although short-term interest rates are still low,
long-term rates have risen in recent weeks. When long-term rates rise above
short-term rates, the yield curve steepens, and this is generally positive
for sustained economic growth. We believe, therefore, that this already
five-year-old business cycle will continue.
The picture, however, remains mixed as growth in late 1995 was not
broad-based across all economic sectors. Faster growth was chiefly due to
strong exports, to a rally in the housing sector, to the service sector, and
to business spending on technology. By contrast, consumer spending in retail
stores was sluggish, leaving many stores with too much inventory, and a sharp
drop in heavy truck sales slowed overall capital spending. These weak spots,
in turn, kept manufacturing slow and weakened imports, hurting foreign
economies. Additionally, several events slowed the economy for a few months
near year-end - a strike at Boeing, the Federal Government shutdown, and
January's snowstorms. These are now past. Recent evidence shows that the
excess inventories have cleared and that retail spending is improving. A
somewhat more broad-based profile now seems possible for economic growth in
coming months.
Most indicators of price inflation remain benign. There is evidence,
however, of pricing power in some sectors. Tight housing markets in some
regions of the country are boosting local housing prices; strong demand in
the service sector is prompting higher prices at hotels, cruise ships and
airlines, and crude oil prices are holding above year-ago levels. Moreover,
recent months' data show that a tightening labor market may finally be
forcing increases in real wages. Wages are emerging as a clear issue in this
year's election, making policy measures to repress rising wages unlikely.
Corporate profits fared well in the slow growth, low inflation
environment of 1995. Operating profits of S&P 500 companies rose an estimated
17% for the year, helped by a weaker dollar and more corporate restructuring.
Profits did slow somewhat in the fourth quarter, as rising wage costs and
foreign profit declines began to take their toll. Current market expectations
are that profits will grow only 4.3% in 1996. Key determinants of 1996 profit
growth will be how soon foreign economies start to pick up, and whether
domestic companies will be able to pass higher wages into prices.
Interest rates fell substantially in 1995. At the end of this reporting
period, short-term interest rates were below 5%, pulled down by the slow
economy and three consecutive rate cuts by the Federal Reserve Board.
Long-term bond yields also fell considerably, reaching a low of 5.96% by
January. But long-term rates have moved upwards in recent weeks because of
signs of increasing economic strength.
MARKET OVERVIEW
The performance of the stock market during the past year reflected the
favorable conditions that governed the economy, as described in the preceding
section of this letter. Throughout the year, stocks set a string of new
record highs. In large part, this reflected the low interest rates that
prevailed during the period, plus belief that interest levels might go still
lower. At the close of the Fund's fiscal year, we remained generally
constructive on the stock market, believing the environment still favored
financial assets and that stock prices could move still higher.
VALUE INVESTING
While there are other investment disciplines practiced at Dreyfus, the
managers of this Fund are passionate believers in value investing. Paying
attention to the value of securities has proven in numerous industry and
academic studies to result in superior and consistent long-term investment
returns.
Why? As value investors, we believe that in the investment world
inexpensive is better than expensive. By definition, securities with low
valuations should have more potential for an increase in valuation than
securities with high valuations, assuming that the company has sound business
fundamentals. In other words, securities priced at a valuation discount to
the average market valuation tend to move toward higher valuations over time
and, therefore, have a built-in advantage for long-term price appreciation.
Further, investors tend to have low expectations for securities with low
valuations, and these low expectations tend to be more easily met than for
securities with high expectations. Finally, investors and analysts often
extrapolate or project past growth into the future which tends to result in
excessive pessimism about low valuation stocks. More often than not, the
opposite growth pattern occurs, relative to these expectations, with low
valuation stocks growing more rapidly than expected.
When a stock with a low valuation is unfortunately greeted with bad news
and its price corrects, it simply should not have far to fall in value. Of
course, there are risks associated with value investing: the time frame for
recovery may be long; the company may never reach its full valuation; or the
problems facing the company may worsen. Overall, however, because of its
focus on securities with low valuations, value investing, we believe, offers
a lower-risk, more conservative style of equity investing.
INVESTMENT PROCESS
Our typical approach to the selection of securities starts and ends with
our analysts, who are an integral part of our investment team. We only want
to own securities which our team of analysts know and follow closely through
detailed fundamental work, regular management interviews and company visits.
Using our analysts' work as a starting point, we then screen the universe
of stocks by computer according to two principal methods. First, we screen
for high projected earnings yield (the inverse of the price-earnings ratio)
on earnings for the next twelve months. We only want to own securities with
an earnings yield which is competitive with risk-free investments, such as
U.S. Treasuries. Otherwise, we would rather own the risk-free security.
Second, we apply our proprietary screen of 21 fundamental factors which have
historically affected stock returns. These factors include the growth outlook
over various time horizons, several relative value measures, company size,
earnings revision and surprise, cash flow, financial, operating and foreign
leverage, momentum measures, and a qualitative evaluation of the potential
for positive change to occur at each company.
Combining this data with our analysts' in-depth knowledge of the
individual companies, we then construct a portfolio of approximately 50
securities which we believe is adequately diversified without overly diluting
the potential impact of good investment ideas.
Selling is also a major part of our discipline and, we believe, an often
neglected part of the investment management process. We use specific criteria
to determine when selling a security is in our shareholders' best interest.
RECENT DEVELOPMENTS
The Fund's fiscal year which ended February 29, 1996 included only a
partial period which fully reflected the Fund's new investment approach.
Prior management of the Fund benefited from exposure to the technology
sector, Intel for example, and from securities undergoing asset
restructuring, such as Grace (W.R.). Results were penalized by a weak retail
group, Home Shopping Network among other holdings, and the minerals sector,
with positions in Aluminum Company of America and Alcan Aluminum Ltd. Current
management of the Fund improved performance with securities like IBM, Digital
Equipment, Fila Holdings, Eastman Kodak, Sandoz, Astra, Praxair and
Westinghouse. Performance was hurt by Sensormatic Electronics and Witco.
At the fiscal year-end, our primary investment themes included:
* Depressed high growth securities
* Asset restructuring potential
* Neglected or misunderstood companies
* New, unappreciated growth opportunities
* Particularly undervalued situations
It is an honor to have been named as portfolio manager of your assets in
this Fund. I will endeavor to serve you to the best of my abilities.
Sincerely,
[Timothy M. Ghriskey signature logo]
Timothy M. Ghriskey
Portfolio Manager
March 12, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS GROWTH OPPORTUNITY FUND, INC. FEBRUARY 29, 1996
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]
$159,902
Standard & Poor's 500
Composite
Stock Price Index*
Dollars
$136,342
Dreyfus Growth
Opportunity Fund
2/4/72
(Years shown above are as of month end February)
*Source: Lipper Analytical Services, Inc.
[Exhibit A]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED FROM INCEPTION (2/4/72)
FEBRUARY 29, 1996 FEBRUARY 29, 1996 FEBRUARY 29, 1996 TO FEBRUARY 29, 1996
________________ ________________ _______________ ______________________
<S> <C> <C> <C>
27.37% 10.76% 10.69% 11.47%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Growth
Opportunity Fund on 2/4/72 (Inception Date) to a $10,000 investment made in
the Standard & 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 shown in the line graph takes into account all
applicable fees and expenses. The Standard & 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 Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS FEBRUARY 29, 1996
COMMON STOCKS-97.0% SHARES VALUE
_______ _______
<S> <C> <C>
COMMERCIAL SERVICES-2.1% Sensormatic Electronics 421,000 $ 8,788,375
____________
CONSUMER DURABLES-4.5%........Eastman Kodak 145,000 10,367,500
General Motors......................... 165,000 8,456,250
____________
18,823,750
____________
CONSUMER
NON-DURABLES-9.2%....... Fila Holdings A.D.S. 196,000 10,731,000
First Brands........................... 360,000 9,630,000
Kimberly-Clark......................... 113,100 8,638,013
Philip Morris Cos...................... 95,000 9,405,000
____________
38,404,013
____________
CONSUMER SERVICES-2.2%..... .Grand Casinos 292,500 (a) 9,323,438
____________
ELECTRONIC
TECHNOLOGY-15.1%...... Boeing 115,000 9,329,375
Digital Equipment...................... 145,000 (a) 10,440,000
Hewlett-Packard........................ 100,000 10,075,000
International Business Machines........ 80,000 9,810,000
Perkin-Elmer........................... 180,000 8,280,000
Storage Technology..................... 290,000 (a) 8,772,500
Teradyne............................... 335,000 (a) 6,825,625
____________
63,532,500
____________
ENERGY MINERALS-6.7%......... Amerada Hess 180,000 9,270,000
Mobil.................................. 80,000 8,770,000
Texaco................................. 125,000 9,968,750
____________
28,008,750
____________
FINANCE-8.1%...... Aetna Life & Casualty 110,000 8,318,750
CIGNA.................................. 75,000 8,887,500
FINOVA Group........................... 175,000 9,340,625
PMI Group.............................. 160,000 7,320,000
____________
33,866,875
____________
HEALTH CARE-4.7%........ Astra A 205,000 9,393,939
Sandoz AG.............................. 11,000 10,325,969
____________
19,719,908
____________
HEALTH SERVICES-1.8%..... Humana 305,000 (a) 7,472,500
____________
HEALTH TECHNOLOGY-6.3%.. Baxter International 195,000 8,921,250
Bristol-Myers Squibb................... 100,000 8,512,500
Warner-Lambert......................... 90,000 8,898,750
____________
26,332,500
____________
INDUSTRIAL SERVICES-1.5%. ENSCO International 265,000 (a) 6,393,125
____________
PROCESS INDUSTRIES-7.8%........ Grace (W.R.) 55,500 3,829,500
Monsanto............................... 82,000 11,039,250
Praxair................................ 300,000 10,350,000
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 29, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
PROCESS
INDUSTRIES (CONTINUED)........... Witco 225,000 $ 7,340,625
____________
32,559,375
____________
PRODUCER
MANUFACTURING-11.1%..... AlliedSignal 200,000 11,125,000
General Electric....................... 125,000 9,437,500
Olin................................... 105,000 8,688,750
Tenneco................................ 160,000 8,940,000
Westinghouse Electric.................. 462,500 8,556,250
____________
46,747,500
____________
RETAIL TRADE-3.3%............ Eckerd 195,000 (a) 8,750,625
Intimate Brands, Cl. A................. 303,000 5,037,375
____________
13,788,000
____________
TECHNOLOGY SERVICES-.1%.. Elcom International 50,000 (a) 387,500
____________
TRANSPORTATION-2.5%...............Tidewater 315,000 10,749,375
____________
UTILITIES-10.0%............ AT&T 125,000 7,953,125
Ameritech.............................. 160,000 9,220,000
Entergy................................ 290,000 8,228,750
GTE.................................... 185,000 7,931,875
Texas Utilities........................ 210,000 8,478,750
____________
41,812,500
____________
TOTAL COMMON STOCKS
(cost $355,265,277).................. $406,709,984
=============
PRINCIPAL
SHORT-TERM INVESTMENTS-4.5% AMOUNT
__________
U.S GOVERNMENT AGENCIES; Federal Home Loan Mortgage,
5.33%, 3/1/1996
(cost $18,700,000)................... $ 18,700,000 $ 18,700,000
=============
TOTAL INVESTMENTS (cost $373,965,277) 101.5% $425,409,984
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES (1.5%) $ (6,170,431)
======= =============
NET ASSETS .................................................................... 100.0% $419,239,553
======= =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $373,965,277)-see statement..................................... $425,409,984
Receivable for investment securities sold............................... 6,432,400
Dividends receivable.................................................... 899,456
Net unrealized appreciation on forward currency
exchange contracts-Note 3(a).......................................... 374,789
Receivable for subscriptions to Common Stock subscribed................. 192,310
Prepaid expenses........................................................ 31,747
____________
433,340,686
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $ 301,661
Due to Custodian........................................................ 3,331,668
Payable for investment securities purchased............................. 10,308,438
Payable for Common Stock redeemed....................................... 18,566
Accrued expenses........................................................ 140,800 14,101,133
____________ ____________
NET ASSETS.................................................................. $419,239,553
============
REPRESENTED BY:
Paid-in capital......................................................... $368,061,128
Accumulated undistributed investment income-net-Note 1(d)............... 91,637
Accumulated distributions in excess of net realized gain
on investments-Note 1(d).............................................. (729,910)
Accumulated net unrealized appreciation on investments
and foreign currency transactions-Note 3(b)........................... 51,816,698
____________
NET ASSETS at value applicable to 43,858,147 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $419,239,553
============
NET ASSET VALUE, offering and redemption price per share
($419,239,553 / 43,858,147 shares)...................................... $9.56
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 29, 1996
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $104,088 foreign taxes withheld at source)..... $ 7,239,575
Interest.............................................................. 579,061
___________
TOTAL INCOME...................................................... $ 7,818,636
EXPENSES:
Management fee-Note 2(a).............................................. 2,998,203
Shareholder servicing costs-Note 2(b)................................. 909,013
Custodian fees........................................................ 82,387
Directors' fees and expenses-Note 2(c)................................ 74,060
Professional fees..................................................... 53,543
Registration fees..................................................... 34,645
Prospectus and shareholders' reports.................................. 10,710
Miscellaneous......................................................... 3,202
___________
TOTAL EXPENSES.................................................... 4,165,763
____________
INVESTMENT INCOME-NET............................................. 3,652,873
____________
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions-Note 3(a)................................................ $52,291,644
Net realized (loss) on forward currency exchange
contracts-Note 3(a)................................................... (1,361,000)
___________
NET REALIZED GAIN....................................................... 50,930,644
Net unrealized appreciation on investments and foreign currency
transactions.......................................................... 42,207,027
____________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 93,137,671
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $96,790,544
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED
______________________________________
FEBRUARY 28, FEBRUARY 29,
1995 1996
____________ ____________
<S>
OPERATIONS: <C> <C>
Investment income-net..................................................... $ 4,243,022 $ 3,652,873
Net realized gain on investments.......................................... 3,313,992 50,930,644
Net unrealized appreciation (depreciation) on investments for the year.... (19,554,876) 42,207,027
____________ ____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......... (11,997,862) 96,790,544
____________ ____________
DIVIDENDS TO SHAREHOLDERS:
From investment income-net................................................ (3,800,200) (4,560,750)
From net realized gain on investments..................................... (67,229,655) (49,121,207)
In excess of net realized gain on investments............................. (1,809,542) (729,910)
____________ ____________
TOTAL DIVIDENDS......................................................... (72,839,397) (54,411,867)
____________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................. 215,640,180 328,651,642
Dividends reinvested...................................................... 70,652,644 52,738,775
Cost of shares redeemed................................................... (292,465,535) (376,842,186)
____________ ____________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS....... (6,172,711) 4,548,231
____________ ____________
TOTAL INCREASE (DECREASE) IN NET ASSETS............................. (91,009,970) 46,926,908
NET ASSETS:
Beginning of year......................................................... 463,322,615 372,312,645
____________ ____________
End of year (including undistributed investment income-net of $490,420 in 1995
and $91,637 in 1996).................................................... $ 372,312,645 $ 419,239,553
============= =============
SHARES SHARES
____________ ____________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................... 22,977,606 34,615,381
Shares issued for dividends reinvested.................................... 8,225,621 5,855,690
Shares redeemed........................................................... (30,788,833) (39,577,869)
____________ ____________
NET INCREASE IN SHARES OUTSTANDING...................................... 414,394 893,202
============= =============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
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 the Fund's financial statements.
FISCAL YEAR ENDED FEBRUARY,
___________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $10.27 $13.20 $12.21 $10.89 $8.67
______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income (loss)-net................. .11 .01 (.02) .10 .10
Net realized and unrealized gain (loss) on investments 2.95 (.98) 1.30 (.38) 2.19
______ ______ ______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS........... 3.06 (.97) 1.28 (.28) 2.29
______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net......... (.13) (.02) - (.09) (.12)
Dividends from net realized gain on investments - - (2.60) (1.80) (1.26)
Dividends in excess of net realized
gain on investments........................ - - - (.05) (.02)
______ ______ ______ ______ ______
TOTAL DISTRIBUTIONS........................ (.13) (.02) (2.60) (1.94) (1.40)
______ ______ ______ ______ ______
Net asset value, end of year................. $13.20 $12.21 $10.89 $8.67 $9.56
======= ====== ====== ====== =======
TOTAL INVESTMENT RETURN.......................... 29.91% (7.36%) 11.07% (2.11%) 27.37%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .95% 1.00% 1.09% 1.10% 1.04%
Ratio of net investment income (loss)
to average net assets...................... .85% .11% (.14%) 1.09% .91%
Portfolio Turnover Rate...................... 56.95% 90.03% 194.59% 242.75% 268.40%
Net Assets, end of year (000's Omitted)...... $631,436 $569,791 $463,323 $372,313 $419,240
Average commission rate paid................. $.0790
</TABLE>
See notes to financial statements.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Growth Opportunity Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
long-term capital growth consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge.
(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. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of
exchange. Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from change in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) 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.
(D) 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. This may result in distributions
that are in excess of investment income-net and net realized gain on a fiscal
year basis. 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.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In accordance with Statement of Position (SOP 93-02) certain permanent
book to tax differences have been reclassified. This
resulted primarily from distributions necessary to avoid an excise tax. As a
result, the Fund reclassified $509,094 to accumulated undistributed
investment income-net, $105 to accumulated undistributed net realized gains
and $509,199 from paid-in-capital.
(E) 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 applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
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 .75 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 11\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 29, 1996.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining 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 29, 1996, the Fund was charged an aggregate of
$431,739 pursuant to the Shareholder Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $70,241 for the period from
December 1, 1995 through February 29, 1996.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the year ended February 29, 1996, amounted to $1,043,296,694 and
$1,086,421,153, respectively.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In addition, the following summarizes open forward currency exchange
contracts at February 29, 1996:
<TABLE>
<CAPTION>
FOREIGN
CURRENCY U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALES CONTRACTS AMOUNTS PROCEEDS VALUE APPRECIATION
______ _______ ______ _________
<S> <C> <C> <C> <C>
Swiss Francs, expiring 3/18/96............... 9,864,250 $ 8,516,024 $ 8,235,306 $280,718
Swedish Krona, expiring 3/18/96.............. 48,528,000 7,260,684 7,166,613 94,071
________
$374,789
=========
</TABLE>
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
purchases of forward currency exchange contracts, the Fund would incur a loss
if the value of the contract decreases between the date the forward contract
is opened and the date the forward contract is closed. The Fund realizes a
gain if the value of the contract increases between those dates. The Fund is
also exposed to credit risk associated with counter party nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the statement of
assets and liabilities.
(B) At February 29, 1996, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $51,819,496,
consisting of $56,823,397 gross unrealized appreciation and $5,003,901 gross
unrealized depreciation.
At February 29, 1996, 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 LLP, 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 29, 1996, 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 29, 1996 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 29, 1996, 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.
[Ernst & Young LLP signature logo]
New York, New York
April 2, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.157 per share as a
long-term capital gain distribution of the $1.386 per share paid on December
12, 1995.
[Dreyfus lion "d" logo]
DREYFUS GROWTH
OPPORTUNITY FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 018AR962
[Dreyfus logo]
Growth Opportunity
Fund, Inc.
Annual Report
February 29, 1996
