FEDERATED STOCK TRUST
Semi-Annual Report
to Shareholders
April 30, 1994
(logo)
FEDERATED SECURITIES CORP.
Distributor
A Subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
Pittsburgh, PA 15222-3779
8083101 (6/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Stock Trust (the "Trust") for the six-month period ended April 30, 1994.
Included for your review are the Financial Statements, which contain the Trust's
Portfolio of Investments, and our Investment Review, which discusses the economy
and our outlook for the stock market.
The Trust seeks to provide investors with a quality core position in the equity
market. At the end of the Report period, the portfolio was diversified among
nearly 60 blue-chip issuers across 11 industry groups.
On the last day of the Report period, the Trust's net assets stood at $548
million. Its net asset value began the period at $26.40 per share. Reflecting
increased volatility in the financial markets early in the year, the Trust
closed the period at $24.90 per share. The Trust paid dividends of $0.21 per
share, and capital gains distributions of $0.78 per share during the six-month
period.
Federated continues its commitment to provide you with quality investment
products and the highest level of service possible. As always, we invite your
comments and suggestions.
Sincerely,
/s/ Glen R. Johnson
Glen R. Johnson
President
June 15, 1994
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Over the past six months the stock market has displayed levels of volatility
which have not been seen in quite some time. After rallying quite nicely from
mid-December through the end of January, stocks corrected by nearly 10% in
reaction to the tightening of Federal Reserve policy and a subsequent rise in
interest rates. From the bottom established in early April, stocks rallied about
2.73% through the end of April. For the entire six-month period, stocks provided
a total return of (2.39%) as measured by the Standard & Poor's 500 Index (the
"S&P 500")*.
The economic statistics during the first quarter showed surprising strengths,
particularly in key areas such as automobiles, housing, and capital spending.
While this has led to fears of higher inflation, the case for a significant rise
in inflation still appears weak. We believe that if real Gross Domestic Product
growth for the remainder of 1994 is in the 3% area, inflation should remain
subdued and corporate profits should register a 10-15% growth.
After two years of historically low S&P 500 price volatility, investors should
be prepared to see increased volatility in the months ahead. The Trust's
management recognizes that this environment offers opportunities, but also calls
for increased selectivity.
One of the goals of the Trust's management is to offer a relatively low risk
portfolio, while achieving competitive returns. Diversification plays an
important role in developing the risk profile. Current areas of emphasis in the
Trust's portfolio include "restructuring cyclicals" experiencing strong earnings
gains, such as Ford, General Motors, and Sears Roebuck. Technology continues to
be an important theme in the Trust with major holdings in Raytheon and General
Motors Corp. "E" (GM's EDS subsidiary). The Trust continues to have significant
holdings in the Finance sector as these stocks appear attractively priced with
price to earnings ratios in the area of 7-10 times. In the controversial area of
health care, the Trust is approximately market weighted vs. the S&P 500 with
emphasis on higher yielding stocks such as Bristol Myers and American Home
Products. The consumer non-durable sector continues to be underweighted.
* This index is unmanaged.
FEDERATED STOCK TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <C> <S> <C>
- ----------- ----------------------------------------------------------------- ------------
COMMON STOCKS--93.4%
- -----------------------------------------------------------------------------------
BASIC INDUSTRY--8.0%
-----------------------------------------------------------------
220,000 ** FMC Corp. $ 10,422,500
-----------------------------------------------------------------
220,600 Lubrizol Corp. 7,969,175
-----------------------------------------------------------------
296,000 Phelps Dodge Corp. 16,391,000
-----------------------------------------------------------------
467,000 Praxair, Inc. 8,931,375
----------------------------------------------------------------- ------------
Total 43,714,050
----------------------------------------------------------------- ------------
CONSUMER DURABLES--8.8%
-----------------------------------------------------------------
169,000 Amli Resendentail Property Trust 3,591,250
-----------------------------------------------------------------
232,500 Eastman Kodak Co. 9,648,750
-----------------------------------------------------------------
170,000 Ford Motor Co. 9,923,750
-----------------------------------------------------------------
182,600 General Motors Corp. 10,362,550
-----------------------------------------------------------------
595,000 Mattel, Inc. 14,949,375
----------------------------------------------------------------- ------------
Total 48,475,675
----------------------------------------------------------------- ------------
CONSUMER NON-DURABLES--6.9%
-----------------------------------------------------------------
146,200 Avon Products, Inc. 8,680,625
-----------------------------------------------------------------
239,200 Philip Morris Cos., Inc. 13,036,400
-----------------------------------------------------------------
292,000 Reebok International Ltd. 8,979,000
-----------------------------------------------------------------
1,053,000 RJR Nabisco, Inc. 6,844,500
----------------------------------------------------------------- ------------
Total 37,540,525
----------------------------------------------------------------- ------------
CONSUMER SERVICES--6.3%
-----------------------------------------------------------------
422,000 American Stores Co. 10,550,000
-----------------------------------------------------------------
311,400 Sears, Roebuck & Co. 14,635,800
-----------------------------------------------------------------
486,100 ** Tele-Communications, Inc. 9,539,713
----------------------------------------------------------------- ------------
Total 34,725,513
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <C> <S> <C>
- ----------- ----------------------------------------------------------------- ------------
COMMON STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
ENERGY--10.9%
-----------------------------------------------------------------
383,600 Baker Hughes, Inc. $ 7,048,650
-----------------------------------------------------------------
155,000 Chevron Corp. 13,795,000
-----------------------------------------------------------------
166,000 Mapco, Inc. 10,707,000
-----------------------------------------------------------------
211,900 Texaco, Inc. 13,641,062
-----------------------------------------------------------------
503,700 USX-Marathon Group 8,499,937
-----------------------------------------------------------------
135,384 ** Western Atlas, Inc. 5,821,512
----------------------------------------------------------------- ------------
Total 59,513,161
----------------------------------------------------------------- ------------
FINANCE--15.4%
-----------------------------------------------------------------
150,000 Bankers Trust of New York Corp. 10,031,250
-----------------------------------------------------------------
282,400 ** Citicorp 10,448,800
-----------------------------------------------------------------
193,483 Dean Witter, Discover & Co. 7,279,798
-----------------------------------------------------------------
120,000 Dreyfus Corp. 5,790,000
-----------------------------------------------------------------
110,900 Federal National Mortgage Association 9,232,425
-----------------------------------------------------------------
105,000 Mellon Bank Corp. 5,853,750
-----------------------------------------------------------------
356,800 PNC Financial Corp. 9,945,800
-----------------------------------------------------------------
128,700 TIG Holdings, Inc. 2,316,600
-----------------------------------------------------------------
195,800 Transamerica Corp. 9,863,425
-----------------------------------------------------------------
392,466 Travelers, Inc. 13,638,193
----------------------------------------------------------------- ------------
Total 84,400,041
----------------------------------------------------------------- ------------
HEALTHCARE--7.3%
-----------------------------------------------------------------
219,000 American Home Products Corp. 12,647,250
-----------------------------------------------------------------
195,700 Becton, Dickinson & Co. 7,558,913
-----------------------------------------------------------------
196,000 Bristol-Myers Squibb Co. 10,559,500
-----------------------------------------------------------------
253,275 U.S. Healthcare, Inc. 9,497,812
----------------------------------------------------------------- ------------
Total 40,263,475
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <C> <S> <C>
- ----------- ----------------------------------------------------------------- ------------
COMMON STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
INDUSTRIAL/MANUFACTURING--8.6%
-----------------------------------------------------------------
142,700 General Electric Co. $ 13,574,338
-----------------------------------------------------------------
135,384 ** Litton Industries, Inc. 4,179,981
-----------------------------------------------------------------
172,000 Loews Corp. 15,394,000
-----------------------------------------------------------------
269,600 Textron, Inc. 14,221,400
----------------------------------------------------------------- ------------
Total 47,369,719
----------------------------------------------------------------- ------------
TECHNOLOGY--12.1%
-----------------------------------------------------------------
408,000 General Motors Corp. 'E' 13,770,000
-----------------------------------------------------------------
159,700 Hewlett-Packard Co. 12,815,925
-----------------------------------------------------------------
288,000 Martin-Marietta Corp. 12,816,000
-----------------------------------------------------------------
218,200 Raytheon Co. 14,073,900
-----------------------------------------------------------------
332,200 Rockwell International Corp. 12,955,800
----------------------------------------------------------------- ------------
Total 66,431,625
----------------------------------------------------------------- ------------
TRANSPORTATION--1.6%
-----------------------------------------------------------------
353,000 Ryder Systems, Inc. 8,825,000
----------------------------------------------------------------- ------------
UTILITIES--7.5%
-----------------------------------------------------------------
244,500 AT & T Corp. 12,500,063
-----------------------------------------------------------------
70,000 British Telecommunications ADR 2,677,500
-----------------------------------------------------------------
242,500 Detroit Edison Co. 6,547,500
-----------------------------------------------------------------
160,000 Duke Power Co. 5,860,000
-----------------------------------------------------------------
164,000 Enron Corp. 4,858,500
-----------------------------------------------------------------
374,200 MCI Communications Corp. 8,559,825
----------------------------------------------------------------- ------------
Total 41,003,388
----------------------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $419,903,099) 512,262,172
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
SHARES VALUE
<C> <C> <S> <C>
- ----------- ----------------------------------------------------------------- ------------
CONVERTIBLE SECURITIES--2.9%
- -----------------------------------------------------------------------------------
INDUSTRIAL/MANUFACTURING--1.1%
-----------------------------------------------------------------
510,000 Westinghouse Electric Corp., PEPS $ 6,305,640
----------------------------------------------------------------- ------------
TECHNOLOGY--1.8%
-----------------------------------------------------------------
2,005,000 Conner Peripherals, Inc., Conv. Notes, 6.50%, 3/1/2002 1,784,450
-----------------------------------------------------------------
6,375,000 General Instrument Corp., 5.00%, 6/15/2000 7,873,125
----------------------------------------------------------------- ------------
Total 9,657,575
----------------------------------------------------------------- ------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $15,598,696) 15,963,215
----------------------------------------------------------------- ------------
*REPURCHASE AGREEMENTS--4.9%
- -----------------------------------------------------------------------------------
$27,030,000 J.P. Morgan Securities, Inc., 2.99%, dated 4/29/94, due 5/2/94(AT
AMORTIZED COST) (NOTE 2B) 27,030,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $462,531,795) $555,255,387+
----------------------------------------------------------------- ------------
</TABLE>
+ The cost for federal tax purposes amounts to $462,531,795. The net unrealized
appreciation of investments on a federal tax basis amounts to $92,723,592,
which is comprised of $104,453,629 appreciation and $11,730,037 depreciation
at April 30, 1994.
* The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated Funds.
** Non-income producing.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
ADR -- American Depository Receipts
PEPS -- Participating Equity Preferred Stock
</TABLE>
Note: The categories of investments are shown as a percentage of net assets
($548,049,765) at April 30, 1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments, at value (Notes 2A and 2B) (identified and tax cost, $462,531,795) $555,255,387
- --------------------------------------------------------------------------------
Cash 6,249
- --------------------------------------------------------------------------------
Dividends and interest receivable 787,647
- --------------------------------------------------------------------------------
Receivable for Trust shares sold 442,994
- -------------------------------------------------------------------------------- ------------
Total assets 556,492,277
- --------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------
Payable for investments purchased $7,926,196
- -------------------------------------------------------------------
Payable for Trust shares repurchased 418,397
- -------------------------------------------------------------------
Accrued expenses 97,919
- ------------------------------------------------------------------- ----------
Total liabilities 8,442,512
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 22,014,282 shares of beneficial interest outstanding $548,049,765
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF (NOTE 2F):
- --------------------------------------------------------------------------------
Paid in capital $443,894,096
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments 92,723,592
- --------------------------------------------------------------------------------
Accumulated undistributed net realized gain on investments 11,245,828
- --------------------------------------------------------------------------------
Undistributed net investment income 186,249
- -------------------------------------------------------------------------------- ------------
Total $548,049,765
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($548,049,765 / 22,014,282 shares of beneficial interest outstanding) $24.90
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
Dividends (net of tax $12,782) $ 6,423,150
- --------------------------------------------------------------------------------
Interest 925,883
- -------------------------------------------------------------------------------- ------------
Total investment income (Note 2C) 7,349,033
- -------------------------------------------------------------------------------- ------------
EXPENSES--
- --------------------------------------------------------------------------------
Investment advisory fee (Note 4) $2,068,496
- -------------------------------------------------------------------
Trustees' fees 7,250
- -------------------------------------------------------------------
Administrative personnel and services (Note 4) 346,723
- -------------------------------------------------------------------
Custodian and portfolio accounting fees 64,504
- -------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 12,928
- -------------------------------------------------------------------
Trust share registration fees 28,025
- -------------------------------------------------------------------
Auditing fees 5,000
- -------------------------------------------------------------------
Legal fees 8,250
- -------------------------------------------------------------------
Printing and postage 9,000
- -------------------------------------------------------------------
Taxes 13,008
- -------------------------------------------------------------------
Insurance premiums 277
- -------------------------------------------------------------------
Shareholder services fee (Note 4) 46,462
- -------------------------------------------------------------------
Miscellaneous 6,426
- ------------------------------------------------------------------- ----------
Total expenses 2,616,349
- -------------------------------------------------------------------------------- ------------
Net investment income 4,732,684
- -------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 11,246,841
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (27,194,041)
- -------------------------------------------------------------------------------- ------------
Net realized and unrealized loss on investments (15,947,200)
- -------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $(11,214,516)
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1994* 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 4,732,684 $ 8,479,812
- -------------------------------------------------------------
Net realized gain (loss) on investments ($11,246,841 and
$16,842,550, respectively, as computed for federal income tax
purposes) 11,246,841 16,842,550
- -------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments (27,194,041) 58,309,454
- ------------------------------------------------------------- ------------- -------------
Change in net assets resulting from operations (11,214,516) 83,631,816
- ------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- -------------------------------------------------------------
Dividends to shareholders from net investment income (4,585,949) (8,867,467)
- -------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (16,842,679) (32,311,490)
- -------------------------------------------------------------
Distributions to shareholders in excess of net investment
income -- (305,905)
- ------------------------------------------------------------- ------------- -------------
Change in net assets from distributions to shareholders (21,428,628) (41,484,862)
- ------------------------------------------------------------- ------------- -------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -------------------------------------------------------------
Proceeds from sale of shares 137,452,775 252,241,445
- -------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 10,893,249 21,205,060
- -------------------------------------------------------------
Cost of shares redeemed (121,715,247) (148,021,556)
- ------------------------------------------------------------- ------------- -------------
Change in net assets from Trust share transactions 26,630,777 125,424,949
- ------------------------------------------------------------- ------------- -------------
Change in net assets (6,012,367) 167,571,903
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 554,062,132 386,490,229
- ------------------------------------------------------------- ------------- -------------
End of period (including undistributed net investment income
of $186,249 and $0, respectively) $ 548,049,765 $ 554,062,132
- ------------------------------------------------------------- ------------- -------------
</TABLE>
*Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR
ENDED
JANUARY
YEAR ENDED OCTOBER 31, 31,
------------------------------------------------------------------ ------
1994* 1993 1992 1991 1990 1989 1988**
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10
- -------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------
Net investment income 0.22 0.48 0.56 0.51 0.70 0.70 0.52
- -------------------------------------
Net realized and unrealized gain
(loss) on investments (0.73) 4.27 1.79 6.23 (4.42) 2.34 1.03
- ------------------------------------- ---- ---- ---- ---- ---- ---- ----
Total from investment operations (0.51) 4.75 2.35 6.74 (3.72) 3.04 1.55
- -------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------
Dividends to shareholders from net
investment income (0.21) (0.49) (0.55) (0.56) (0.78) (0.65) (0.52)
- -------------------------------------
Distributions to shareholders from net
realized gain on investment transactions (0.78) (2.02) (1.61) (0.74) (2.14) (0.07) (0.26)
- -------------------------------------
Distributions to shareholders in excess of
net investment income -- (0.02)(b) -- -- -- -- --
- ------------------------------------- ---- ---- ---- ---- ---- ---- ----
Total distributions (0.99) (2.53) (2.16) (1.30) (2.92) (0.72) (0.78)
- ------------------------------------- ---- ---- ---- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $24.90 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87
- ------------------------------------- ---- ---- ---- ---- ---- ---- ----
TOTAL RETURN*** (1.99)% 20.88% 10.78% 37.50% (16.36)% 13.48% 7.14%
- -------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------
Expenses 0.94%(c) 0.97% 0.99% 1.00% 0.98% 0.95% 0.94%(c)
- -------------------------------------
Net investment income 1.70%(c) 1.83% 2.33% 2.25% 3.03% 2.75% 3.08%(c)
- -------------------------------------
Expense waiver/reimbursement(a) -- -- -- -- -- -- --
- -------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------
Net assets, end of period (000 omitted) $548,050 $554,062 $386,490 $369,505 $332,241 $573,047 $636,426
- -------------------------------------
Portfolio turnover rate 13% 26% 54% 49% 53% 35% 31%
- -------------------------------------
<CAPTION>
1988 1987 1986
------ ------ ------
<S> <<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $24.00 $20.43 $17.34
- -------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------
Net investment income 0.68 0.66 0.66
- -------------------------------------
Net realized and unrealized gain
(loss) on investments (1.50) 4.99 3.48
- ------------------------------------- ---- ---- ----
Total from investment operations (0.82) 5.65 4.14
- -------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------
Dividends to shareholders from net
investment income (0.64) (0.64) (0.65)
- -------------------------------------
Distributions to shareholders from net
realized gain on investment transactions (0.44) (1.44) (0.40)
- -------------------------------------
Distributions to shareholders in excess of
net investment income -- -- --
- ------------------------------------- ---- ---- ----
Total distributions (1.08) (2.08) (1.05)
- ------------------------------------- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $22.10 $24.00 $20.43
- ------------------------------------- ---- ---- ----
TOTAL RETURN*** (3.64)% 29.02% 24.78%
- -------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------
Expenses 0.89% 0.93% 1.00%
- -------------------------------------
Net investment income 2.82% 3.04% 3.69%
- -------------------------------------
Expense waiver/reimbursement(a) -- -- 0.04%
- -------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------
Net assets, end of period (000 omitted) $675,110 $611,856 $284,856
- -------------------------------------
Portfolio turnover rate 51% 19% 35%
- -------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** For the nine months ended October 31, 1988.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Distributions to shareholders in excess of net investment income for the
year ended October 31, 1993 were a result of certain book and tax timing
differences. These distributions did not represent a return of capital for
federal income tax purposes.
(c) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Trust is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end, management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles
("GAAP").
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sales
price reported on national securities exchanges. Unlisted securities and
short-term obligations (and private placement securities) are generally
valued at the prices provided by an independent pricing service. Short-term
securities with remaining maturities of sixty days, or less may be stated at
amortized cost, which approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Trust to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Trust to
monitor on a daily basis, the market value of each repurchase agreement's
underlying collateral to ensure the value at least equals the principal
amount of the repurchase agreement, including accrued interest.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Trust's adviser to be creditworthy pursuant to guidelines established
by the Board of Trustees ("Trustees"). Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase agreement.
Accordingly, the Trust could receive less than the repurchase price on the
sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income and expenses are accrued daily. Bond premium and discount if
applicable, are amortized as required by the Internal Revenue Code, as
amended ("Code").
Distributions are determined in accordance with income tax regulations which
may differ from GAAP. These distributions do not represent a return of
capital for federal income tax purposes.
D. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable income. Accordingly,
no provisions for federal tax are necessary.
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
F. RECLASSIFICATIONS--During the current period, the Trust adopted Statement of
Position 93-2 Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. Accordingly, permanent book and tax basis differences relating to
shareholder distributions have been reclassified to paid-in-capital. As of
April 30, 1994, the cumulative net effect of such differences, totaling
$10,258, was reclassified from net realized gain and undistributed net
investment income to paid-in-capital. Net investment income and net assets
were not affected by this change.
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------
1994 1993
- ----------------------------------------------------------------- ---------- ----------
- -----------------------------------------------------------------
<S> <C> <C>
Shares sold 5,343,484 9,996,402
- -----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 429,548 888,633
- -----------------------------------------------------------------
Shares redeemed (4,743,544) (5,885,738)
- ----------------------------------------------------------------- ---------- ----------
Net change resulting from Trust share transactions 1,029,488 4,999,297
- ----------------------------------------------------------------- ---------- ----------
</TABLE>
*Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser
("Adviser"), receives for its services an annual investment advisory fee ranging
from .75% of 1% on the first $500 million of average daily net assets of the
Trust to .40 of 1% of average daily net assets in excess of $2 billion. Adviser
may voluntarily choose to waive a portion of its fee. Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Trust
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during any fiscal year shall be at least $125,000
per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the term of a shareholder services agreement
with Federated Shareholder Services ("FSS") the Trust will pay FSS up to .25 of
1% of average net assets of the Trust for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Trust. The
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
Certain of the Officers and Trustees of the Trust are Officers and Trustees of
the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended April 30, 1994, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
Purchases $96,481,001
- ------------------------------------------------------------------------------ -----------
Sales $65,527,436
- ------------------------------------------------------------------------------ -----------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
Wesley W. Posvar Edward C. Gonzales
Marjorie P. Smuts Vice President and Treasurer
John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
Robert C. Rosselot
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Trust's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
