FEDERATED STOCK TRUST
ADDENDUM TO THE SEMI-ANNUAL REPORT DATED APRIL 30, 1995
Dear Shareholder:
Please excuse an error in our most recent Semi-Annual Report for Federated
Stock Trust.
Federated Stock Trust's one, five and ten year Lipper Analytical Services,
Inc. rankings were misstated on page 3. Please delete the last sentence of
the second paragraph on page three and replace it with the following:
"The one, five and ten year total returns and rankings, in the "Growth &
Income" funds according to Lipper Analytical Services, Inc. in the most
recent calendar quarter end March 31, 1995, are 11.14%, which ranked 171 out
of 366, 10.93% which ranked 67 out of 185, and 12.02% which ranked 63 out of
109, respectively."
We are very sorry if this error has caused any confusion, and we appreciate
your participation in the Trust. As always, your comments and suggestions
are welcome.
Sincerely,
Glen R. Johnson
President
July 26, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 313900102
009888 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Stock Trust for the six-month period ended April 30, 1995. Included in this
report is our Investment Review, followed by a complete listing of the fund's
holdings, Financial Statements, and Financial Highlights.
Federated Stock Trust is managed to pursue a quality core position in the equity
market through a highly diversified portfolio. The fund's portfolio includes
common stocks and convertible securities from 58 issuers representing 16 key
business sectors. Among the fund's holdings are many familiar names such as
Gannett Co. Inc., Hewlett-Packard Co., Lockheed Martin Corp., Eastman Kodak Co.,
Bristol Meyers Squibb Co., and AT&T Corp.
Reflecting a period of volatility in the overall stock market, the fund's net
assets decreased from $600 million on October 31, 1994, to $557 million on April
30, 1995. However, during the period, the fund's net asset value per share
increased from $26.33 to $26.75 per share.
Thank you for your continued confidence in Federated Stock Trust. As always, we
welcome your comments and suggestions.
Sincerely,
Glenn R. Johnson
President
June 15, 1995
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
FEDERATED STOCK TRUST
JUNE 1995
AN INTERVIEW WITH PETER ANDERSON AND FRED PLAUTZ, CO-PORTFOLIO MANAGERS
Q: Will you describe recent economic and market conditions that have
influenced your management of Federated Stock Trust?
PETER: The economy is slowing, as predicted by most economists and strategists.
The first quarter real Gross Domestic Product ("GDP") growth was about 2.7%
(annual rate). That's down substantially from the last two quarters of 1994,
when GDP grew at a rate of over 4%--which was just too fast. The question now
is: Will growth slow further and will earnings be impacted? The market has been
concerned about this, and over the past few months less cyclical companies have
been doing somewhat better than cyclicals. We still see good value in selected
cyclicals because we don't think the economy shows any signs of going into a
recession in the near future. Aggregate corporate profits were strong in the
first quarter, and we expect that to continue, although some cyclical areas will
be affected by a sluggish economy.
Q: What impact have interest rates had on the stock market in recent months?
PETER: The long bond is now trading under 7.00%. It was as high as 8.15% in late
1994. Certainly this decline in long term interest rates has been an important
factor in the he strength of the stock market over the past six months, along
with strong earnings growth. The debate among economists currently is whether
the Federal Reserve will ease or maintain short rates at current levels over the
next several months, but this will depend on how much the economy slows.
Q: What effect has the weak U.S. dollar had upon your portfolio decisions?
FRED: Many U.S. companies have benefited from the weak dollar, those which are
large exporters or have substantial international operations. This has been a
factor in our fundamental analysis of companies over the past year or so. We
have several holdings in companies which have substantial international
revenues. For example, Hewlett-Packard is very big overseas, with nearly $10
billion in sales in Europe alone last year. IBM is still getting more than half
their income from outside the U.S., and General Electric is also a very big
player internationally. These companies can actually benefit from the weakness
of the dollar.
2
- --------------------------------------------------------------------------------
Q: How has Federated Stock Trust been performing?
PETER: From October 31, 1994 through April 30, 1995, Federated Stock Trust had a
total return of 5.56%. For the twelve months ended April 30, 1995, Federated
Stock Trust's total return was 12.60% which ranked 171st out of 369 "Growth &
Income" funds according to Lipper Analytical Services Inc. The one, five and ten
year total returns and rankings, in the "Growth & Income" funds according to
Lipper Analytical Services, in the most recent calendar quarter end March 31,
1995, are 11.14%, which ranked 460 out of 501, 10.93%, which ranked 197 out of
231, and 12.02%, which ranked 51 out of 136, respectively.*
Q: What are the current investment themes in the portfolio?
PETER: The largest sector in the fund is technology. We're overweight in this
area relative to the Standard & Poor's ("S&P") 500 Index. About 18% of the
portfolio consisted of technology stocks at the end of April, 1995. The S&P 500
Index has a weighting of about 12% in technology.
FRED: Hewlett Packard is still our biggest holding. The stock has performed well
recently, after the company reported excellent first quarter earnings. Lockheed
Martin, in which we have a sizable holding, is the result of the recent merger
of two large defense companies. This is indicative of what's going on in
aerospace and defense, and we've played this sector reasonably well. The
Department of Defense has allowed consolidation to take place among its
contractors in order to preserve the defense industrial base. Several companies
have been able to benefit by this because they can cut costs and enhance
profitability and cash flow.
Q. What other technology stocks are in the portfolio?
PETER: We have positions in some well-managed "defense conglomerates" such as
Raytheon and Rockwell. Both have substantial non-defense businesses, which are
doing very well.
FRED: One turnaround situation we have in information technology is IBM. The
stock declined substantially from 1990-1993, but, about a year ago, actions
taken by new management began to pay off. For the last four quarters, IBM's
earnings have exceeded expectations.
Q: Is finance still a sizable portion of the fund's portfolio?
PETER: Finance is our second area of overweight. The portfolio has a 15%
weighting in financial stocks versus 11% for the S&P 500. We own several bank
stocks such as Citicorp and Bank of Boston. We also own Dean Witter Discover,
which has a strong position in the credit card business. Travelers Inc., a
financial services conglomerate, which we have held for over three years,
continues to do well. The financial sector has been doing well recently since
these stocks are somewhat interest rate sensitive.
* PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE PERFORMANCE. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, THEREFORE, AN INVESTORS SHARES WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
3
- --------------------------------------------------------------------------------
Q: What are your holdings in manufacturing?
PETER: We're overweighted in this area. We own Caterpillar and Deere, both of
which experienced a good first quarter. FMC Corporation is our largest holding
in this sector, and we also have a position in Textron, a conglomerate that's
restructuring to enhance shareholder value.
Q: What other new names are in the fund?
FRED: One area that looks attractive is natural gas, and the recent purchase of
Burlington Resources in the fund is a natural gas play. Natural gas prices have
been under pressure, but, on an asset value basis, the stock is very cheap.
Enron, another holding, is also a play in natural gas.
Q: What about other recent additions to the Trust?
FRED: In the consumer services sector, we purchased Gannett, which owns USA
TODAY, a daily publication that has finally turned profitable. USA TODAY is
leveraging their consumer franchise, entering the international arena and adding
services. The company features substantial leverage with continued growth, good
cash flow and an excellent newspaper operation that's national in scope.
Eastman Chemical is another recent purchase. A specialty chemical company, it is
the world's leading manufacturer of PET [polyethylene terephthalate], a plastic
used to make soda bottles and other packaging. It's capacity-constrained, and
there is limited capacity coming on line. So, we don't think that the earnings
have peaked on a cyclical or secular basis.
Q: How do you view the outlook for various market sectors over the next 6
months?
PETER: Consumer-related stocks continue to be a difficult place to find
attractive values. Manufacturing, technology, and finance stocks will probably
be more rewarding, assuming a slowing economy doesn't eventually turn into a
recession. We're still looking for companies that are well-run and
shareholder-oriented, with a strategy for enhancing shareholder value. We want
to buy these stocks when our quantitative disciplines indicate that they are
attractively priced, I.E., undervalued.
Q: That's a lot of good detail about the fund. Is there anything else about
your work that's new and interesting?
PETER: One of the things that we're doing that I think is significant is the
fact that we're now able to do more fundamental research and company contact. We
have added a number of analysts to our equity research group over the past year.
Since fundamental analysis is an important part of our process, we can look at
more companies in greater detail than ever before.
4
FEDERATED STOCK TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ---------------------------------------------------------------------- ------------
<C> <S> <C>
EQUITIES--95.7%
- -------------------------------------------------------------------------------------
CONSUMER DURABLES--6.1%
----------------------------------------------------------------------
241,900 Eastman Kodak Co. $ 13,909,250
----------------------------------------------------------------------
325,000 Ford Motor Co. 8,775,000
----------------------------------------------------------------------
485,000 Mattel, Inc. 11,518,750
---------------------------------------------------------------------- ------------
Total 34,203,000
---------------------------------------------------------------------- ------------
CONSUMER NON-DURABLES--7.2%
----------------------------------------------------------------------
151,200 Avon Products, Inc. 9,563,400
----------------------------------------------------------------------
246,400 Philip Morris Cos., Inc. 16,693,600
----------------------------------------------------------------------
156,000 RJR Nabisco Holdings Corp. 4,270,500
----------------------------------------------------------------------
301,000 Reebok International Ltd. 9,406,250
---------------------------------------------------------------------- ------------
Total 39,933,750
---------------------------------------------------------------------- ------------
CONSUMER SERVICES--1.0%
----------------------------------------------------------------------
105,000 Gannett Co., Inc. 5,525,625
---------------------------------------------------------------------- ------------
ELECTRONIC TECHNOLOGY--14.6%
----------------------------------------------------------------------
279,400 Hewlett-Packard Co. 18,475,325
----------------------------------------------------------------------
83,000 Intel Corp. 8,497,125
----------------------------------------------------------------------
96,800 International Business Machines Corp. 9,171,800
----------------------------------------------------------------------
161,910 ** Litton Industries, Inc. 5,606,134
----------------------------------------------------------------------
299,000 Lockheed Martin Corp. 17,267,250
----------------------------------------------------------------------
145,700 Raytheon Co. 10,599,675
----------------------------------------------------------------------
272,400 Rockwell International Corp. 11,883,450
---------------------------------------------------------------------- ------------
Total 81,500,759
---------------------------------------------------------------------- ------------
ENERGY MINERALS--8.7%
----------------------------------------------------------------------
150,000 Burlington Resources, Inc. 5,868,750
----------------------------------------------------------------------
233,000 Chevron Corp. 11,038,375
----------------------------------------------------------------------
172,000 Mapco, Inc. 9,782,500
----------------------------------------------------------------------
179,900 Texaco, Inc. 12,300,663
----------------------------------------------------------------------
</TABLE>
5
FEDERATED STOCK TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ---------------------------------------------------------------------- ------------
<C> <S> <C>
EQUITIES--CONTINUED
- -------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
----------------------------------------------------------------------
518,700 USX Corp. $ 9,725,625
---------------------------------------------------------------------- ------------
Total 48,715,913
---------------------------------------------------------------------- ------------
FINANCE--15.1%
----------------------------------------------------------------------
50,900 The PMI Group, Inc. 1,896,025
----------------------------------------------------------------------
160,600 American Express Co. 5,580,850
----------------------------------------------------------------------
169,000 Amli Residential Properties Trust, REIT 3,084,250
----------------------------------------------------------------------
276,600 Bank of Boston Corp. 9,266,100
----------------------------------------------------------------------
262,000 Citicorp 12,150,250
----------------------------------------------------------------------
200,483 Dean Witter, Discover & Co. 8,495,467
----------------------------------------------------------------------
90,300 First Interstate Bancorp 6,941,812
----------------------------------------------------------------------
218,000 Mellon Bank Corp. 8,556,500
----------------------------------------------------------------------
133,400 NationsBank Corp. 6,670,000
----------------------------------------------------------------------
192,000 Providian Corp. 6,552,000
----------------------------------------------------------------------
211,000 Ryder Systems, Inc. 4,932,125
----------------------------------------------------------------------
246,666 Travelers, Inc. 10,205,806
---------------------------------------------------------------------- ------------
Total 84,331,185
---------------------------------------------------------------------- ------------
HEALTH SERVICES--2.2%
----------------------------------------------------------------------
137,000 Smithkline Beecham Corp., ADR 5,325,875
----------------------------------------------------------------------
261,775 U.S. Healthcare, Inc. 7,002,481
---------------------------------------------------------------------- ------------
Total 12,328,356
---------------------------------------------------------------------- ------------
HEALTH TECHNOLOGY--6.4%
----------------------------------------------------------------------
142,900 American Home Products Corp. 11,021,162
----------------------------------------------------------------------
202,700 Becton, Dickinson & Co. 11,300,525
----------------------------------------------------------------------
202,000 Bristol-Myers Squibb Co. 13,155,250
---------------------------------------------------------------------- ------------
Total 35,476,937
---------------------------------------------------------------------- ------------
INDUSTRIAL SERVICES--2.3%
----------------------------------------------------------------------
280,000 Baker Hughes, Inc. 6,300,000
----------------------------------------------------------------------
</TABLE>
6
FEDERATED STOCK TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ---------------------------------------------------------------------- ------------
<C> <S> <C>
EQUITIES--CONTINUED
- -------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
----------------------------------------------------------------------
140,210 ** Western Atlas, Inc. $ 6,309,450
---------------------------------------------------------------------- ------------
Total 12,609,450
---------------------------------------------------------------------- ------------
NON-ENERGY MINERALS--2.1%
----------------------------------------------------------------------
206,000 Phelps Dodge Corp. 11,664,750
---------------------------------------------------------------------- ------------
PROCESS INDUSTRIES--4.9%
----------------------------------------------------------------------
135,900 Eastman Chemical Co. 7,712,325
----------------------------------------------------------------------
228,600 Lubrizol Corp. 7,972,425
----------------------------------------------------------------------
480,000 Praxair, Inc. 11,400,000
---------------------------------------------------------------------- ------------
Total 27,084,750
---------------------------------------------------------------------- ------------
PRODUCER MANUFACTURING--12.4%
----------------------------------------------------------------------
127,400 Caterpillar, Inc. 7,452,900
----------------------------------------------------------------------
80,900 Deere & Co. 6,633,800
----------------------------------------------------------------------
227,000 ** FMC Corp. 13,932,125
----------------------------------------------------------------------
227,900 General Electric Co. 12,762,400
----------------------------------------------------------------------
85,100 Loews Corp. 8,669,563
----------------------------------------------------------------------
165,000 Philips Electronics N.V., ADR 6,352,500
----------------------------------------------------------------------
237,400 Textron, Inc. 13,531,800
---------------------------------------------------------------------- ------------
Total 69,335,088
---------------------------------------------------------------------- ------------
RETAIL TRADE--5.1%
----------------------------------------------------------------------
439,000 American Stores Co. 11,249,375
----------------------------------------------------------------------
321,500 Sears, Roebuck & Co. 17,441,375
---------------------------------------------------------------------- ------------
Total 28,690,750
---------------------------------------------------------------------- ------------
TECHNOLOGY SERVICES--2.8%
----------------------------------------------------------------------
357,000 General Motors Corp., Class E 15,440,250
---------------------------------------------------------------------- ------------
UTILITIES--4.8%
----------------------------------------------------------------------
252,500 AT&T Corp. 12,814,375
----------------------------------------------------------------------
</TABLE>
7
FEDERATED STOCK TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
SHARES VALUE
- ------------ ---------------------------------------------------------------------- ------------
<C> <S> <C>
169,000 Enron Corp. $ 5,746,000
----------------------------------------------------------------------
387,200 MCI Communications Corp. 8,421,600
---------------------------------------------------------------------- ------------
Total 26,981,975
---------------------------------------------------------------------- ------------
TOTAL EQUITIES (IDENTIFIED COST $410,706,584) 533,822,538
---------------------------------------------------------------------- ------------
CONVERTIBLE SECURITIES--2.9%
- -------------------------------------------------------------------------------------
$ 6,575,000 General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000 9,809,045
----------------------------------------------------------------------
1,093,000 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 6,558,000
---------------------------------------------------------------------- ------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $6,641,055) 16,367,045
---------------------------------------------------------------------- ------------
*REPURCHASE AGREEMENT--1.7%
- -------------------------------------------------------------------------------------
9,375,000 J.P. Morgan Securities, Inc., 5.97%, dated 4/28/1995, due 5/1/1995 (at
amortized cost) 9,375,000
---------------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $426,722,639)(a) $559,564,583
---------------------------------------------------------------------- ------------
------------
<FN>
(a) The cost of investments for federal tax purposes amounts to $426,722,639.
The net unrealized appreciation/depreciation on a federal tax cost basis
amounts to $132,841,944, and is comprised of $137,573,396 appreciation and
$4,731,452 depreciation at April 30, 1995.
* 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
joint accounts with other Federated funds.
** Non-income producing.
Note: The categories of investments are shown as a percentage of net assets
($557,448,243) at April 30, 1995.
</TABLE>
The following abbreviation is used throughout this portfolio:
<TABLE>
<S> <C>
ADR --American Depositary Receipt
REIT --Real Estate Investment Trust
</TABLE>
(See Notes which are an integral part of the Financial Statements)
8
FEDERATED STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------
Investments in securities, at value (identified and
tax cost $426,722,639) $559,564,583
- ------------------------------------------------------------------
Cash 12,387
- ------------------------------------------------------------------
Income receivable 945,270
- ------------------------------------------------------------------
Receivable for investments sold 5,654,763
- ------------------------------------------------------------------
Receivable for shares sold 535,775
- ------------------------------------------------------------------ ------------
Total assets 566,712,778
- ------------------------------------------------------------------ ------------
LIABILITIES:
- ------------------------------------------------------------------
Payable for investments purchased $8,379,610
- ------------------------------------------------------
Payable for shares redeemed 753,355
- ------------------------------------------------------
Accrued expenses 131,570
- ------------------------------------------------------ ----------
Total liabilities 9,264,535
- ------------------------------------------------------------------ ------------
NET ASSETS for 20,836,442 shares outstanding $557,448,243
- ------------------------------------------------------------------ ------------
------------
NET ASSETS CONSISTS OF:
- ------------------------------------------------------------------
Paid in capital $414,803,676
- ------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments 132,841,944
- ------------------------------------------------------------------
Accumulated net realized gain on investments 9,324,820
- ------------------------------------------------------------------
Undistributed net investment income 477,803
- ------------------------------------------------------------------ ------------
Total Net Assets $557,448,243
- ------------------------------------------------------------------ ------------
------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share:
($557,448,243 DIVIDED BY 20,836,442 shares
outstanding) $ 26.75
- ------------------------------------------------------------------ ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
9
FEDERATED STOCK TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------
Interest $ 731,872
- -------------------------------------------------------------------
Dividends 7,562,766
- ------------------------------------------------------------------- -----------
Total income 8,294,638
- -------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------
Investment advisory fee $2,054,079
- -------------------------------------------------------
Administrative personnel and services fee 209,506
- -------------------------------------------------------
Custodian fees 73,382
- -------------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 170,299
- -------------------------------------------------------
Directors'/Trustees' fees 7,081
- -------------------------------------------------------
Auditing fees 7,464
- -------------------------------------------------------
Legal fees 8,271
- -------------------------------------------------------
Portfolio accounting fees 38,621
- -------------------------------------------------------
Shareholder services fee 276,759
- -------------------------------------------------------
Share registration costs 17,928
- -------------------------------------------------------
Printing and postage 7,460
- -------------------------------------------------------
Insurance premiums 5,691
- -------------------------------------------------------
Taxes 8,158
- -------------------------------------------------------
Miscellaneous 14,380
- ------------------------------------------------------- ----------
Total expenses 2,899,079
- -------------------------------------------------------
Deduct--Waiver of investment advisory fee 90,697
- ------------------------------------------------------- ----------
Net expenses 2,808,382
- ------------------------------------------------------------------- -----------
Net investment income 5,486,256
- ------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------
Net realized gain on investments 9,614,312
- -------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments 12,834,664
- ------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments 22,448,976
- ------------------------------------------------------------------- -----------
Change in net assets resulting from operations $27,935,232
- ------------------------------------------------------------------- -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
10
FEDERATED STOCK TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------
OPERATIONS--
- --------------------------------------------
Net investment income $ 5,486,256 $ 10,271,797
- --------------------------------------------
Net realized gain/loss on investments
($9,614,312 net gain and $15,441,993 net
gain respectively, as computed for federal
income tax purposes) 9,614,312 15,153,654
- --------------------------------------------
Net change in unrealized
appreciation/depreciation 12,834,664 89,647
- -------------------------------------------- ---------------- ----------------
Change in assets resulting from
operations 27,935,232 25,515,098
- -------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------
Distributions from net investment income (5,746,984) (9,572,779)
- --------------------------------------------
Distributions from net realized gains (15,442,313) (16,842,679)
- -------------------------------------------- ---------------- ----------------
Change in net assets resulting from
distributions to shareholders (21,189,297) (26,415,458)
- -------------------------------------------- ---------------- ----------------
SHARE TRANSACTIONS--
- --------------------------------------------
Proceeds from sale of Shares 66,812,830 265,476,902
- --------------------------------------------
Net asset value of Shares issued to
shareholders in payment of distributions
declared 11,096,666 13,333,198
- --------------------------------------------
Cost of Shares redeemed (127,871,083) (231,307,977)
- -------------------------------------------- ---------------- ----------------
Change in net assets resulting from
share transactions (49,961,587) 47,502,123
- -------------------------------------------- ---------------- ----------------
Change in net assets (43,215,652) 46,601,763
- --------------------------------------------
NET ASSETS:
- --------------------------------------------
Beginning of period 600,663,895 554,062,132
- -------------------------------------------- ---------------- ----------------
End of period (including undistributed net
investment income of $477,803 and $738,532,
respectively) $557,448,243 $600,663,895
- -------------------------------------------- ---------------- ----------------
---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
11
FEDERATED STOCK TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
APRIL
30, YEAR ENDED OCTOBER 31,
1995 --------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988(a)
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.25 0.46 0.48 0.56 0.51 0.70 0.70 0.52
- ----------------------------------------
Net realized and unrealized gain
(loss) on investments 1.12 0.68 4.27 1.79 6.23 (4.42) 2.34 1.03
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment operations 1.37 1.14 4.75 2.35 6.74 (3.72) 3.04 1.55
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.26) (0.43) (0.49) (0.55) (0.56) (0.78) (0.65) (0.52)
- ----------------------------------------
Distributions in excess of net
investment income 0.00 0.00 (0.02)(e) 0.00 0.00 0.00 0.00 0.00
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions from net
investment income (0.26) (0.43) (0.51) (0.55) (0.56) (0.78) (0.65) (0.52)
- ----------------------------------------
Distributions from net realized gain
on investment transactions (0.69) (0.78) (2.02) (1.61) (0.74) (2.14) (0.07) (0.26)
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions (0.95) (1.21) (2.53) (2.16) (1.30) (2.92) (0.72) (0.78)
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $26.75 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87
- ---------------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN (b) 5.56% 4.55% 20.88% 10.78% 37.50% (16.36)% 13.48% 7.14%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 1.01%(c) 0.97% 0.97% 0.99% 1.00% 0.98% 0.95% 0.94%(c)
- ----------------------------------------
Net investment income 1.98%(c) 1.81% 1.83% 2.33% 2.25% 3.03% 2.75% 3.08%(c)
- ----------------------------------------
Expense waiver/reimbursement (d) 0.03%(c) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period
(000 omitted) $557,448 $600,664 $554,062 $386,490 $369,505 $332,241 $573,047 $636,426
- ----------------------------------------
Portfolio Turnover 19% 28% 26% 54% 49% 53% 35% 31%
- ----------------------------------------
<CAPTION>
YEAR ENDED
JANUARY 31,
------------------------------
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
- ----------------------------------------
Distributions from net investment
income (0.64) (0.64) (0.65)
- ----------------------------------------
Distributions in excess of net
investment income 0.00 0.00 0.00
- ---------------------------------------- -------- -------- --------
Total distributions from net
investment income (0.64) (0.64) (0.65)
- ----------------------------------------
Distributions from net realized gain
on investment transactions (0.44) (1.44) (0.40)
- ---------------------------------------- -------- -------- --------
Total distributions (1.08) (2.08) (1.05)
- ---------------------------------------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $22.10 $24.00 $20.43
- ---------------------------------------- -------- -------- --------
-------- -------- --------
TOTAL RETURN (b) (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 (d) 0.00% 0.00% 0.04%
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period
(000 omitted) $675,110 $611,856 $284,856
- ----------------------------------------
Portfolio Turnover 51% 19% 35%
- ----------------------------------------
<FN>
(a) For the nine months ended October 31, 1988.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This contractual expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
12
FEDERATED STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Stock Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), 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.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Unlisted securities and
bonds are generally valued at the price 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.
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 that the value of collateral 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 the guidelines
established by the Board of Trustees (the "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.
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 (the "Code").
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.
13
FEDERATED STOCK TRUST
- ---------------------------------------------------------
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.
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
SIX MONTHS ENDED OCTOBER 31,
APRIL 30, 1995 1994
- ---------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Shares Sold 2,642,064 10,334,187
- ----------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 457,016 526,068
- ----------------------------------------------------------
Shares redeemed (5,075,314) (9,032,374)
- ---------------------------------------------------------- ---------- -------------
Net change resulting from share transactions (1,976,234) 1,827,881
- ---------------------------------------------------------- ---------- -------------
---------- -------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .75 of 1% of the Trust's average daily net assets. The Adviser will
waive, to the extent of its advisory fee, the amount, if any, by which the
Trust's aggregate annual operating expenses (excluding interest, taxes,
brokerage commissions, expenses of registering and qualifying the Trust and its
shares under federal and state laws, expenses of withholding taxes, and
extraordinary expenses) exceed 1% of average daily net assets of the Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to .25 of
1% of average daily net assets of the Trust for the period. This fee is to
obtain certain personal services for shareholders and to maintain the
shareholder accounts.
14
FEDERATED STOCK TRUST
- ---------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Trust. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting records.
The fee is based on the level of the Trust's average daily net assets for the
period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended April 30, 1995, were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------
<S> <C>
PURCHASES $100,142,848.69
- ----------------------------------------------------- ---------------
SALES $148,124,254.60
- ----------------------------------------------------- ---------------
</TABLE>
15
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
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
David M. Taylor
ASSISTANT TREASURER
Robert C. Rosselot
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the Fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
16
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FEDERATED
- --------------------------------------------------------------------------------
STOCK
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS ----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779 ---------------------------------------------
[LOGO]
RECYCLED
PAPER
313900102
8083101 (6/95) ------------------------------
