DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Fellow Shareholder:
It is a pleasure to have this opportunity to communicate with my fellow
shareholders of the Dreyfus Growth Opportunity Fund, Inc.
This letter accompanies the semi-annual report of the Dreyfus Growth
Opportunity Fund for the six months ended August 31, 1998. During this period,
your Fund produced a total return of -16.16%* which compares with a total return
of -8.07% for the Standard and Poor's 500 Composite Stock Price Index (the "S&P
500" )** and -11.04% for the Wilshire Large Company Value Index.*** The Fund
currently is being managed in a disciplined value investment style and,
therefore, we believe its performance results are more comparable to a value
stock benchmark like the Wilshire index noted above.
Value stocks underperformed growth stocks during the period. The margin was
among the widest in memory. Any value manager who remained true to his or her
discipline could not hope to have matched the returns of the S&P 500 Index, the
performance of which has become largely dominated by a relatively few growth
stocks due to increases in major component security valuations. The S&P 500
Index and many of its major security components carry valuations well above
those of any historic period by almost any financial measure, according to our
calculations. These major security components, the so-called "mega caps" or the
very largest domestically traded companies, continued to drive the performance
of the S& P 500 Index. This concentrated overvaluation, in our opinion, is
reminiscent of the early 1970s "nifty fifty" stocks or oil stocks in the early
1980s. Both of those markets ended with quick and severe corrections of the
overvalued securities. No one can predict such an occurrence today, but many
market participants may conclude that the risk level of the S&P 500 Index and
many of its major security components is high by historic standards. Despite the
recent stock market correction, at least for the time being, positive relative
price momentum in this index and in many of these mega cap stocks has continued
As to your Fund, most of the relative performance shortfall occurred during
the recent August market correction. In the midst of a volatile period for the
overall stock market, relative performance can initially fall either way. Quite
often, disciplined value investment processes will underperform when the overall
stock market reaches speculative overvaluation, but will outperform as the
market corrects and as economic change occurs. With the stock market having
corrected and with interest rates having fallen, the universe of securities
available within our investment discipline has broadened.
ECONOMIC REVIEW
A significant influence on the U.S. economy during the six months through
August 1998 was Asian economic weakness. It had both positive and negative
effects. On the positive side, actual inflation and expected inflation in the
U.S. dropped, causing a decline in long-term Treasury bond yields and mortgage
rates. These lower rates contributed to the boom in real estate prices and
benefited stock prices as well. The fall in inflation helped the consumer sector
as more income remained after price increases to buy goods and services.
The negative effect of Asian weakness was directed toward the industrial
sector. By midyear, evidence of U.S. industrial weakness was clear-cut given
slowing inventory accumulation and weakening exports. One result of this
industrial weakness was to cool off the overall U.S. economy, keeping the
Federal Reserve Board neutral toward the level of interest rates, and perhaps
increasing the possibility of an eventual ease or lowering of rates. We believe
that this favorable shift in expectations about Federal Reserve policy was
clearly a major reason for the rise in U.S. bond and stock prices during the
spring and early summer.
A major change in the economic outlook over recent months has been a downward
shift in expectations for world economic growth. A tightening of lending
standards developed in numerous emerging markets, sharply reducing the economic
outlook for Asia and Latin America. The effect on Europe and the U.S. has been
to lower profit expectations due to weakened export opportunities.
Market sentiment has shifted towards expectations of monetary ease in the U.S.
and other industrial countries as the evidence of a weaker world economy has
accumulated. The prospects for world economic weakness and lower interest rates
in major countries will be powerfully impacted by whether global financial
stresses calm down or intensify in the coming months. There appears to be a
shift in the priorities of many key policymakers from fighting potential
inflation to stimulating economic growth.
STOCK MARKET OVERVIEW
The six-month period ended August 31, 1998, represented a down period for
almost every stock market index. Most of the damage was done in August when the
overall stock market suffered a correction.
Three major trends could be observed within the stock market during this
six-month period. First, the strongest relative performance came by far from the
largest stocks, the so-called mega caps. The Standard & Poor's 500 Index,
dominated by the stocks of the largest companies, dropped -8.07% for the period,
while the Standard and Poor' s MidCap 400 Index of mid-sized companies fell
- -19.99%, and the Russell 2000 Index of small company securities lost -26.48%.(+)
One contributor to this pattern was the strong buying of U.S. stocks, at least
early in the period, by foreign investors who often simply focus on the largest
companies.
A second and related major trend in the stock market during the six months was
the significantly higher returns from most expensively valued stocks (commonly
known as growth stocks) relative to most inexpensively valued stocks (commonly
known as value stocks) . With the expectations for corporate earnings growth
being reduced as the period progressed due to concerns about the impact of the
Asian economies, large growth stocks were in demand due to an ability to better
control short-term earnings results.
Finally, the stock market as a whole was extremely volatile during this
six-month period. The broad stock market was generally stable or rising during
the first five months, then fell during late July and August on renewed concerns
about Asia, emerging markets, and the potential for economic weakness in the
U.S.
VALUE INVESTING AND OUR INVESTMENT PROCESS
To once again summarize our investment philosophy, while there are other
investment disciplines practiced at Dreyfus, members of the Value Team at
Dreyfus are passionate believers in value investing. As value investors, we want
to buy growing companies, but we want to pay as little for them as we can. In
one sense, value investing can be a lower risk, more conservative style of
equity investing because value stock prices may decline less in falling markets
Our approach to the selection of securities begins and ends with our analysts,
who are an integral part of our investment team. Our Dreyfus analysts contribute
their proprietary forecasts on corporate earnings and cash flows to our computer
models, their analysis and opinions to our decision-making process, and their
constant flow of information to our ongoing assessment of owned securities. We
screen the universe of stocks by computer according to two principal methods.
The first computer screen determines value by calculating each security's
earnings yield (our forecast for earnings divided by the current security price)
which, to justify purchase, must be greater than the yield available on
reasonably long-term U.S. Treasury securities. Being paid more than this rate
for the risk inherent in equity investing is central to our value discipline.
The second computer screen looks at 19 other factors that have historically
influenced stock returns including various growth, valuation and leverage
measures. We input into this computer model the current economic and stock
market trends, and the computer calculates each security's exposure to this
environment. The model is an idea generator, and further detailed fundamental
analysis is conducted on each potential holding to determine its suitability for
the Fund. Combining all of this data with our analysts' in-depth knowledge of
the individual companies, we then construct a portfolio of approximately 50
securities. We use similar disciplined criteria and several other factors to
determine when selling a security is in our shareholders' best interest.
EXAMPLES OF OUR INVESTMENT PROCESS
The detailed fundamental analysis, computer modeling and portfolio strategy
that go into the decision-making process for each security in the Fund is not
possible to cover in this short report. Instead, provided below are several
brief summaries of some of the better performing and poorer performing
securities in the Fund during the semi-annual period.
Biogen, a biotechnology company, was one of the better performing securities
during this reporting period. Our earnings estimates for the company have been
well above the Wall Street consensus, qualifying this growth stock as a value
security. We believe that the company's new product pipeline, both near term and
long term, is particularly promising. The security remained in the portfolio at
the end of the period.
Xerox has been expanding its core copier business into the computer printer
business with great initial success. The ability to provide quality service can
be a significant competitive advantage. The security was one of the stronger
performers in the Fund, and was sold when our investment discipline indicated
that it was fully valued relative to the risk-free alternative.
RJR Nabisco Holdings and Philip Morris Cos., both largely tobacco companies,
were poor performers during much of the period. Congress could not agree on
tobacco legislation that we believe would have significantly benefited both the
public good and these securities. The tobacco companies are now working with the
states to resolve these same issues. At the end of the Fund's fiscal year, we
remained attracted to the unusually inexpensive valuation and high dividend
yield of both companies.
Union Pacific, a major railroad, was a new purchase during the period, but did
not initially perform terribly well. The company has had operating problems
resulting in bottlenecks at several major rail yards that helped depress the
stock price and attracted our interest. We saw these problems as an opportunity
to realize value as the problems were fixed, and bought the stock. Management
appears to be well on the way to correcting the operating problems, and recently
the stock rebounded strongly.
In almost any Fund there are both strong performing and poor performing
securities. Our job is to maximize the good and minimize the bad, while keeping
risk at tolerable levels. We will not be successful every quarter or every year,
but we work hard to reward our fellow investors over the long term.
Diligent management of your investments is our highest priority. Thank you for
entrusting us with your assets.
Very truly yours,
[Timothy M. Ghriskey signature logo]
Timothy M. Ghriskey
Portfolio Manager
September 29, 1998
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.
***SOURCE: WILSHIRE ASSOCIATES, INC.--The Wilshire Large Company Value Index
is constructed by using a blend of price-to-book and forecast price-to-earnings
ratios. The largest 750 stocks in the Wilshire 5000 are ranked based on a style
score that is 75% price-to-earnings ratio and 25% forecast P/E. The universe is
divided so that companies that represent half of the total capitalization fall
into growth and the remainder are placed into value.
(+)SOURCE: --LIPPER ANALYTICAL SERVICES, INC.--Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The Standard
& Poor' s MidCap 400 Index is a broad-based index of 400 companies with market
capitalizations generally ranging from $50 million to $10 billion and is a
widely accepted, unmanaged index of overall mid-cap stock market performance.
The Russell 2,000 Index is an unmanaged index of small cap stock performance and
is composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization.
<TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS AUGUST 31, 1998 (UNAUDITED)
Common Stocks--91.5% Shares Value
- ------------------------------------------------------- _____________ _____________
<S> <C> <C>
Consumer Durables--2.0% General Motors . . . . . . . . . . . . . . . . . . . . 130,000 $ 7,507,500
_____________
Consumer Non-Durables--12.4% ConAgra . . . . . . . . . . . . . . . . . . . . . . . 335,000 8,291,250
Kimberly-Clark . . . . . . . . . . . . . . . . . . . . 215,000 8,196,875
NIKE, Cl. B . . . . . . . . . . . . . . . . . . . . . 210,000 7,284,375
Philip Morris Cos . . . . . . . . . . . . . . . . . . 251,000 10,432,188
RJR Nabisco Holdings . . . . . . . . . . . . . . . . . 275,000 5,964,062
Warnaco Group , Cl. A . . . . . . . . . . . . . . . . 240,000 6,540,000
_____________
46,708,750
_____________
Consumer Services--3.6% Cedant . . . . . . . . . . . . . . . . . . . . . . . . 425,000 4,914,063
McDonald's . . . . . . . . . . . . . . . . . . . . . . 153,000 8,577,562
_____________
13,491,625
_____________
Electronic Technology--13.3% Boeing . . . . . . . . . . . . . . . . . . . . . . . . 235,000 7,270,313
Ceridian . . . . . . . . . . . . . . . . . . . . . . . 170,000 8,245,000
Compaq Computer . . . . . . . . . . . . . . . . . . . 332,850 9,298,997
Intel . . . . . . . . . . . . . . . . . . . . . . . . 127,000 9,040,812
International Business Machines . . . . . . . . . . . 84,000 9,460,500
Storage Technology . . . . . . . . . . . . . . . . . . 310,000 (a) 6,742,500
_____________
50,058,122
_____________
Energy Minerals--8.8% British Petroleum, A.D.S. . . . . . . . . . . . . . . 120,000 8,775,000
Mobil . . . . . . . . . . . . . . . . . . . . . . . . 140,000 9,677,500
Tosco . . . . . . . . . . . . . . . . . . . . . . . . 323,500 7,117,000
USX-Marathon Group . . . . . . . . . . . . . . . . . . 284,000 7,384,000
_____________
32,953,500
_____________
Finance--20.2% American General . . . . . . . . . . . . . . . . . . . 105,500 6,778,375
BankBoston . . . . . . . . . . . . . . . . . . . . . . 200,000 7,137,500
Bankers Trust New York . . . . . . . . . . . . . . . . 95,000 7,059,688
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . 150,000 8,728,125
Chubb . . . . . . . . . . . . . . . . . . . . . . . . 130,000 8,125,000
Citicorp . . . . . . . . . . . . . . . . . . . . . . . 63,000 6,811,875
First Chicago NBD . . . . . . . . . . . . . . . . . . 115,000 7,288,125
First Union . . . . . . . . . . . . . . . . . . . . . 149,000 7,226,500
Fleet Financial Group . . . . . . . . . . . . . . . . 120,000 7,867,500
Meditrust (Units) . . . . . . . . . . . . . . . . . . 102,100 1,582,550
NationsBank . . . . . . . . . . . . . . . . . . . . . 125,000 7,125,000
_____________
75,730,238
_____________
Health Services--2.2% Aetna . . . . . . . . . . . . . . . . . . . . . . . . 139,700 8,408,194
_____________
Health Technology--6.2% Allergan . . . . . . . . . . . . . . . . . . . . . . . 173,000 8,174,250
Amgen . . . . . . . . . . . . . . . . . . . . . . . . 81,700 (a) 4,973,488
Biogen . . . . . . . . . . . . . . . . . . . . . . . . 223,000 10,313,750
_____________
23,461,488
_____________
Industrial Services--2.0% Waste Management . . . . . . . . . . . . . . . . . . . 170,000 7,501,250
_____________
Process Industries--1.7% Owens--Illinois . . . . . . . . . . . . . . . . . . . 205,000 (a) 6,393,437
_____________
Producer Manufacturing--2.8% General Electric . . . . . . . . . . . . . . . . . . . 130,000 10,400,000
_____________
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------- _____________ _____________
Retail Trade--4.2% American Stores . . . . . . . . . . . . . . . . . . . 300,000 $ 8,700,000
Sears, Roebuck . . . . . . . . . . . . . . . . . . . . 155,000 7,042,812
_____________
15,742,812
_____________
Transportation--4.0% CNF Transportation . . . . . . . . . . . . . . . . . . 245,000 7,656,250
Union Pacific . . . . . . . . . . . . . . . . . . . . 184,000 7,325,500
_____________
14,981,750
_____________
Utilities--8.1% Ameritech . . . . . . . . . . . . . . . . . . . . . . 246,000 11,592,750
Bell Atlantic . . . . . . . . . . . . . . . . . . . . 216,000 9,531,000
Coastal . . . . . . . . . . . . . . . . . . . . . . . 360,000 9,360,000
_____________
30,483,750
_____________
TOTAL COMMON STOCKS
(cost $367,073,109) . . . . . . . . . . . . . . . $343,822,416
=============
Principal
Short-Term Investments--.7% Amount
- ------------------------------------------------------------------------------------------ _____________
U.S. Treasury Bills: 4.92%, 11/12/1998 . . . . . . . . . . . . . . . . . . $ 814,000 $ 806,137
4.85%, 11/19/1998 . . . . . . . . . . . . . . . . . . 1,618,000 1,600,946
4.84%, 11/27/1998 . . . . . . . . . . . . . . . . . . 298,000 294,555
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $2,701,297) . . . . . . . . . . . . . . . . $ 2,701,638
=============
TOTAL INVESTMENTS (cost $369,774,406). . . . . . . . . . . . . . . . . . . . . . . . . . . 92.2% $346,524,054
======= =============
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8% $ 29,159,240
======= =============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $375,683,294
======= =============
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1998 (UNAUDITED)
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $369,774,406 $346,524,054
Receivable for investment securities sold . . . . . . . . 37,634,159
Dividends receivable . . . . . . . . . . . . . . . . . . 960,441
Receivable for shares of Common Stock subscribed . . . . 18,004
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 16,855
_____________
385,153,513
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 215,643
Payable for investment securities purchased . . . . . . . 8,289,204
Payable for shares of Common Stock redeemed . . . . . . . 825,447
Cash overdraft due to Custodian . . . . . . . . . . . . . 83,898
Accrued expenses . . . . . . . . . . . . . . . . . . . . 56,027
_____________
9,470,219
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $375,683,294
=============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $354,911,361
Accumulated undistributed investment income--net . . . . 2,140,361
Accumulated net realized gain (loss) on investments . . . 41,881,924
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) . . . . . . . . . . . . . . . (23,250,352)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $375,683,294
=============
SHARES OUTSTANDING
(100 MILLION SHARES OF $.01 PAR VALUE COMMON STOCK AUTHORIZED) . . . . . . . . . . . . . . 44,158,588
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $8.51
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1998 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $40,967 foreign taxes
<S> <C> <C>
withheld at source) . . . . . . . . . . . . . . . . . $ 4,249,023
Interest . . . . . . . . . . . . . . . . . . . . . . . . 325,040
____________
Total Income . . . . . . . . . . . . . . . . . . . $ 4,574,063
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . 1,841,009
Shareholder servicing costs--Note 3(b) . . . . . . . . . 503,012
Custodian fees--Note 3(b) . . . . . . . . . . . . . . . . 45,529
Directors' fees and expenses--Note 3(c) . . . . . . . . . 35,307
Professional fees . . . . . . . . . . . . . . . . . . . . 23,589
Registration fees . . . . . . . . . . . . . . . . . . . . 21,525
Prospectus and shareholders' reports . . . . . . . . . . 17,130
Loan commitment fees--Note 2 . . . . . . . . . . . . . . 1,971
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 834
____________
Total Expenses . . . . . . . . . . . . . . . . . . 2,489,906
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,084,157
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . . . . . $ 51,148,699
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . . . . . 988,682
Net realized gain (loss) on financial futures . . . . . . (247,712)
____________
Net Realized Gain (Loss) . . . . . . . . . . . . . 51,889,669
Net unrealized appreciation (depreciation) on investments
[including ($19,186) net unrealized (depreciation)
on financial futures] . . . . . . . . . . . . . . . . (124,377,589)
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . (72,487,920)
____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $(70,403,763)
=============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
August 31, 1998 Year Ended
(Unaudited) February 28, 1998
________________ _________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,084,157 $ 2,534,692
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . 51,889,669 31,562,794
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . (124,377,589) 39,849,084
_____________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . (70,403,763) 73,946,570
_____________ ______________
DIVIDENDS TO SHAREHOLDERS:
From investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- (3,068,901)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . --- (56,678,537)
In excess of net realized gain on investments . . . . . . . . . . . . . . . . . . . --- (10,007,745)
_____________ ______________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- (69,755,183)
_____________ ______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,785,144 1,048,195,184
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- 67,665,439
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (293,260,540) (1,083,149,719)
_____________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . (62,475,396) 32,710,904
_____________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . (132,879,159) 36,902,291
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508,562,453 471,660,162
_____________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $375,683,294 $ 508,562,453
============= ==============
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,140,361 $ 56,204
_____________ ______________
Shares Shares
_____________ ______________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,087,571 100,050,474
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . --- 7,113,151
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,037,069) (103,202,945)
_____________ ______________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . (5,949,498) 3,960,680
============= ==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<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 period indicated. This information has been
derived from the Fund's financial statements.
Six Months Ended
August 31, 1998 Fiscal Year Ended February,
_______________________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
__________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . $10.15 $10.22 $ 9.56 $ 8.67 $10.89 $12.21
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income (loss)--net . . . . . . . .05 .05 .10 .10 .10 (.02)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . (1.69) 1.39 1.93 2.19 (.38) 1.30
______ ______ ______ ______ ______ ______
Total from Investment Operations . . . . . (1.64) 1.44 2.03 2.29 (.28) 1.28
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . -- (.07) (.09) (.12) (.09) --
Dividends from net realized gain
on investments . . . . . . . . . . . . -- (1.22) (1.28) (1.26) (1.80) (2.60)
Dividends in excess of net realized gain
on investments . . . . . . . . . . . . -- (.22) -- (.02) (.05) --
______ ______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . -- (1.51) (1.37) (1.40) (1.94) (2.60)
______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . . . $ 8.51 $10.15 $10.22 $ 9.56 $ 8.67 $10.89
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . (16.16%)* 15.62% 22.35% 27.37% (2.11%) 11.07%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . .51%* 1.06% 1.06% 1.04% 1.10% 1.09%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . .42%* .50% .91% .91% 1.09% (.14%)
Portfolio Turnover Rate . . . . . . . . . . 63.15%* 112.32% 137.38% 268.40% 242.75% 194.59%
Net Assets, end of period (000's Omitted) . $375,683 $508,562 $471,660 $419,240 $372,313 $463,323
- -----------------------------
* Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Growth Opportunity Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "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 (the "Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). Premier
Mutual Fund Services, Inc. is the distributor of the Fund's shares, which are
sold to the public without a sales charge.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) 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 changes in the 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 and the difference between the amount 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. Under the terms of the custodian agreement, the Fund receives net
earnings credits based on available cash balances left on deposit.
(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 of 1986, as amended (the "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.
(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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended August
31, 1998, the Fund did not borrow under the Facility.
NOTE 3--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 value of the
Fund' s average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings (which in the view of Stroock & Stroock
& Lavan LLP, counsel to the Fund, also includes loan commitment fees) and
extraordinary expenses, exceed 11_2% of the average value of the Fund's net
assets, the Manager will bear such excess expense. During the period ended
August 31, 1998, there was no expense reimbursement pursuant to the Agreement.
(B) Under the 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 period ended
August 31, 1998, the Fund was charged $305,289 pursuant to the Shareholder
Services Plan.
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. During the period
ended August 31, 1998, the Fund was charged $99,742 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended August 31, 1998, the Fund was
charged $45,529 pursuant to the custody agreement.
(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 4--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, financial futures and forward currency exchange
contracts, during the period ended August 31, 1998 amounted to $295,623,636 and
$385,235,473, respectively.
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 DREYFUS GROWTH
OPPORTUNITY FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 gain on each open
contract. At August 31, 1998, there were no forward currency exchange contracts
outstanding.
The Fund may invest in financial futures contracts in order to gain exposure
to or protect against changes in the market. The Fund is exposed to market risk
as a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the Fund to mark to market on a daily
basis, which reflects the change in the market value of the contracts at the
close of each day's trading. Typically, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. At August 31, 1998, there were no financial
futures contracts outstanding.
(B) At August 31, 1998, accumulated net unrealized depreciation on investments
was $23,250,352, consisting of $24,339,775 gross unrealized appreciation and
$47,590,127 gross unrealized depreciation.
At August 31, 1998, 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 lion "d" logoreg.tm]
[dreyfus logo reg.tm]
DREYFUS GROWTH
OPPORTUNITY FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 018SA988
Growth
Opportunity
Fund, Inc.
Semi-Annual
Report
August 31, 1998
