FEDERATED STOCK TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1996
[LOGO]
Since 1995
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 313900102
8083101 (6/96)
[LOGO]
RECYCLED PAPER
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Stock Trust, which covers the six-month period from November 1, 1995, through
April 30, 1996. The report begins with a discussion by the fund's portfolio
manager, followed by a complete listing of the fund's holdings and its financial
statements.
The fund is managed to pursue long-term growth through a highly diversified
portfolio of high-quality common stocks. On the last day of the reporting
period, the fund's portfolio included many well-known names, such as DuPont,
International Paper, Ford, Mattel, Avon, Exxon, American Express, Bristol-Myers
Squibb, Merck, General Electric, Sears, Hewlett Packard, Union Pacific, and
AT&T.
The fund's diversified portfolio performed extremely well, achieving a total
return of 14.66%* in the highly favorable stock market environment that
characterized the six-month reporting period ended April 30, 1996. Contributing
to the total return was $0.25 per share in income dividends, $2.14 in capital
gains, and a 6% increase in share price. Total net assets rose by more than $125
million during the period, to reach $760.1 million on April 30, 1996.
Thank you for participating in the growth opportunities of stocks through
Federated Stock Trust. As always, we'll continue to provide you with the highest
level of professional service. We invite your questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Performance quoted reflects past performance. Investment return and principal
value will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The U.S. stock market has shown surprising strength in the six months ended
April 30, 1996, with the Standard & Poor's 500 Index (the "S&P 500") rising
13.75%*. Despite a firming of the economy in the past few months, we continue to
expect only modest growth in the economy and corporate profits over the
remainder of 1996. While the second quarter may reflect real gross domestic
product growth of 3.0% or more, several factors argue for slower growth in the
latter half of 1996. Growth in corporate profits may be 5% or less (annual rate)
over the next few quarters. After rising sharply over the past three months,
interest rates appear to be in a trading range of 6.70%-7.00% on the 30-year
U.S. Treasury bond. In this environment, the market does not look particularly
cheap, selling at about 17 times estimated 1996 earnings. We must be more
selective in identifying companies which have superior managements dedicated to
enhancing shareholder value, and taking strategic action to achieve this goal.
We also have a sharper focus on selling stocks which have only average prospects
and valuation. We have attempted to avoid stocks selling at a price to earnings
ratio significantly above their sustainable growth rates, and pay close
attention to the quantitative disciplines that have served us well over time.
First quarter purchases reflect a move to be somewhat more diversified in the
current market environment with modest increases in Energy, Healthcare, and
Utilities. The present portfolio has a balance between cyclicals and more stable
growth stocks, but continues to be more capital goods than consumer-oriented as
shown below:
Overweights (vs. S&P 500)--Finance, Producer Manufacturing, Technology
Underweights (vs. S&P 500)--Consumer Durables, Consumer Non-Durables, Retail,
Services, Utilities
THEMES
Major themes in the current portfolio are:
(1) Corporate restructuring--companies taking specific action via sales,
spinoffs, and/or acquisitions. Examples: AT&T, Westinghouse, CIGNA.
(2) Industry consolidation--beneficiaries industry rationalization because of
excess capacity or the opportunity for economies of scale. Examples:
Chemical Banking, Travelers, Lockheed Martin.
(3) Industry leaders--companies which have a competitive edge because of low
cost and/or superior management. Examples: Mattel, IBP, Nordstrom.
(4) Dominant companies--large dominant leaders. Examples: Citicorp, General
Electric, Philip Morris.
(5) Technology revolution--companies best positioned to participate in the huge
secular growth in information technology and telecommunications. Examples:
IBM, Hewlett Packard, Intel.
* The S&P 500 Daily Stock Price Index of 500 Common Stocks, a composite index of
common stocks in industry, transportation, and financial and public utility
companies, can be used to compare the total returns of funds whose portfolios
are invested primarily in common stocks. This index is unmanaged and actual
investments can not be made in an index.
FEDERATED STOCK TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITIES--86.4%
- -----------------------------------------------------------------------------------
BASIC INDUSTRY--8.7%
----------------------------------------------------------------
640,800 Allegheny Ludlum Corp. $ 12,655,800
----------------------------------------------------------------
118,400 Aluminum Co. of America 7,385,200
----------------------------------------------------------------
382,000 Barrick Gold Corp. 11,698,750
----------------------------------------------------------------
203,000 Du Pont (E.I.) de Nemours & Co. 16,316,125
----------------------------------------------------------------
73,500 Eastman Chemical Co. 4,942,875
----------------------------------------------------------------
186,000 International Paper Co. 7,416,750
----------------------------------------------------------------
101,700 Newmont Mining Corp. 5,885,888
---------------------------------------------------------------- ------------
Total 66,301,388
---------------------------------------------------------------- ------------
CONSUMER DURABLES--2.5%
----------------------------------------------------------------
210,200 Ford Motor Co. 7,540,925
----------------------------------------------------------------
434,625 Mattel, Inc. 11,300,250
---------------------------------------------------------------- ------------
Total 18,841,175
---------------------------------------------------------------- ------------
CONSUMER NON-DURABLES--7.9%
----------------------------------------------------------------
137,800 Avon Products, Inc. 12,246,975
----------------------------------------------------------------
105,700 CPC International, Inc. 7,306,512
----------------------------------------------------------------
570,200 IBP, Inc. 15,252,850
----------------------------------------------------------------
67,500 Kimberly-Clark Corp. 4,902,188
----------------------------------------------------------------
224,900 Philip Morris Cos., Inc. 20,269,113
---------------------------------------------------------------- ------------
Total 59,977,638
---------------------------------------------------------------- ------------
ENERGY MINERALS--7.6%
----------------------------------------------------------------
212,400 Chevron Corp. 12,319,200
----------------------------------------------------------------
133,500 Exxon Corp. 11,347,500
----------------------------------------------------------------
387,200 Occidental Petroleum Corp. 9,970,400
----------------------------------------------------------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITY--CONTINUED
- -----------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
----------------------------------------------------------------
148,900 Texaco, Inc. $ 12,730,950
----------------------------------------------------------------
535,300 USX Corp. 11,776,600
---------------------------------------------------------------- ------------
Total 58,144,650
---------------------------------------------------------------- ------------
FINANCE--13.5%
----------------------------------------------------------------
179,100 Allstate Corp. 6,962,512
----------------------------------------------------------------
146,500 American Express Co. 7,105,250
----------------------------------------------------------------
143,600 CIGNA Corp. 16,280,650
----------------------------------------------------------------
146,700 Chase Manhattan Corp. 10,103,962
----------------------------------------------------------------
72,500 Chubb Corp. 6,860,312
----------------------------------------------------------------
187,700 Citicorp 14,781,375
----------------------------------------------------------------
182,883 Dean Witter, Discover & Co. 9,967,123
----------------------------------------------------------------
192,300 Mellon Bank Corp. 10,336,125
----------------------------------------------------------------
174,900 Providian Corp. 8,067,263
----------------------------------------------------------------
23,600 Travelers Group Aetna Property Casualty Corp. 651,950
----------------------------------------------------------------
182,000 Travelers Group, Inc. 11,193,000
---------------------------------------------------------------- ------------
Total 102,309,522
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HEALTH CARE--8.6%
----------------------------------------------------------------
171,000 Abbott Laboratories 6,946,875
----------------------------------------------------------------
102,600 American Home Products Corp. 10,824,300
----------------------------------------------------------------
137,200 Becton, Dickinson & Co. 11,061,750
----------------------------------------------------------------
184,700 Bristol-Myers Squibb Co. 15,191,575
----------------------------------------------------------------
135,500 Columbia/HCA Healthcare Corp. 7,198,437
----------------------------------------------------------------
119,800 Merck & Co., Inc. 7,247,900
----------------------------------------------------------------
124,900 Smithkline Beecham Corp., ADR 6,744,600
---------------------------------------------------------------- ------------
Total 65,215,437
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</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITY--CONTINUED
- -----------------------------------------------------------------------------------
PRODUCER MANUFACTURING--6.6%
----------------------------------------------------------------
112,320 (a) FMC Corp. $ 7,792,200
----------------------------------------------------------------
115,000 General Electric Co. 8,912,500
----------------------------------------------------------------
155,200 Loews Corp. 11,834,000
----------------------------------------------------------------
208,000 Philips Electronics N.V., ADR 7,462,000
----------------------------------------------------------------
167,700 Textron, Inc. 14,380,275
---------------------------------------------------------------- ------------
Total 50,380,975
---------------------------------------------------------------- ------------
RETAIL TRADE--3.0%
----------------------------------------------------------------
158,900 Nordstrom, Inc. 8,084,038
----------------------------------------------------------------
293,300 Sears, Roebuck & Co. 14,628,338
---------------------------------------------------------------- ------------
Total 22,712,376
---------------------------------------------------------------- ------------
SERVICES--3.4%
----------------------------------------------------------------
260,500 Baker Hughes, Inc. 8,270,875
----------------------------------------------------------------
139,900 Gannett Co., Inc. 9,565,662
----------------------------------------------------------------
129,610 (a) Western Atlas, Inc. 7,776,600
---------------------------------------------------------------- ------------
Total 25,613,137
---------------------------------------------------------------- ------------
TECHNOLOGY--14.4%
----------------------------------------------------------------
119,500 (a) DST Systems, Inc. 4,391,625
----------------------------------------------------------------
183,300 (a) Digital Equipment Corp. 10,952,175
----------------------------------------------------------------
247,800 General Motors Corp., Class E 13,969,725
----------------------------------------------------------------
90,700 Hewlett-Packard Co. 9,602,862
----------------------------------------------------------------
190,500 Intel Corp. 12,906,375
----------------------------------------------------------------
91,400 International Business Machines Corp. 9,825,500
----------------------------------------------------------------
147,910 (a) Litton Industries, Inc. 6,711,416
----------------------------------------------------------------
158,900 Lockheed Martin Corp. 12,811,313
----------------------------------------------------------------
144,500 Raytheon Co. 7,315,313
----------------------------------------------------------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITY--CONTINUED
- -----------------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
----------------------------------------------------------------
192,100 Rockwell International Corp. $ 11,237,850
----------------------------------------------------------------
163,100 (a) Seagate Technology, Inc. 9,459,800
---------------------------------------------------------------- ------------
Total 109,183,954
---------------------------------------------------------------- ------------
TRANSPORTATION--1.5%
----------------------------------------------------------------
20,400 Consolidated Rail Corp. 1,422,900
----------------------------------------------------------------
121,600 (a) Southern Pacific Railway Co. 3,040,000
----------------------------------------------------------------
103,100 Union Pacific Corp. 7,023,688
---------------------------------------------------------------- ------------
Total 11,486,588
---------------------------------------------------------------- ------------
UTILITIES--8.7%
----------------------------------------------------------------
310,600 AT&T Corp. 19,024,250
----------------------------------------------------------------
251,700 CMS Energy Corp. 7,330,762
----------------------------------------------------------------
170,600 Columbia Gas System, Inc. 8,295,425
----------------------------------------------------------------
260,000 Enron Corp. 10,465,000
----------------------------------------------------------------
95,200 FPL Group, Inc. 4,105,500
----------------------------------------------------------------
355,200 MCI Communications Corp. 10,456,200
----------------------------------------------------------------
293,300 TECO Energy, Inc. 6,819,225
---------------------------------------------------------------- ------------
Total 66,496,362
---------------------------------------------------------------- ------------
TOTAL EQUITIES (IDENTIFIED COST $454,204,220) 656,663,202
---------------------------------------------------------------- ------------
CONVERTIBLE SECURITIES--6.1%
- -----------------------------------------------------------------------------------
CONSUMER NON-DURABLES--0.8%
----------------------------------------------------------------
950,900 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 5,705,400
---------------------------------------------------------------- ------------
FINANCE--2.0%
----------------------------------------------------------------
144,800 Merrill Lynch & Co., Inc., STRYPES, Series MGIC, $3.12 7,547,700
----------------------------------------------------------------
109,000 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 7,929,750
---------------------------------------------------------------- ------------
Total 15,477,450
---------------------------------------------------------------- ------------
PRODUCER MANUFACTURING--2.1%
----------------------------------------------------------------
863,200 (b) Westinghouse Electric Corp., PEPS, Series C, $1.30 15,753,400
---------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
CONVERTIBLE SECURITIES--CONTINUED
- -----------------------------------------------------------------------------------
TECHNOLOGY--1.2%
----------------------------------------------------------------
4,100,000 Analog Devices, Inc., Conv. Bond, 3.50%, 12/1/2000 $ 4,675,353
----------------------------------------------------------------
5,000,000 Solectron Corp., Conv. Bond, 6.00%, 3/1/2006 4,943,750
---------------------------------------------------------------- ------------
Total 9,619,103
---------------------------------------------------------------- ------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $43,537,164) 46,555,353
---------------------------------------------------------------- ------------
(C) REPURCHASE AGREEMENT--7.3%
- -----------------------------------------------------------------------------------
$55,610,000 BT Securities Corporation, 5.35%, dated 4/30/1996, due 5/1/1996
(at amortized cost) 55,610,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $553,351,384)(D) $758,828,555
---------------------------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1996, these securities amounted
to $15,753,400 which represents 2.07% of net assets.
(c) 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.
(d) The cost of investments for federal tax purposes amounts to $553,351,384.
The net unrealized appreciation of investments on a federal tax basis
amounts to $205,477,171 which is comprised of $207,323,021 appreciation and
$1,845,850 depreciation at April 30, 1996.
Note: The categories of investments are shown as a percentage of net assets
($760,100,087) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
PEPS -- Participating Equity Preferred Stock
STRYPES -- Structured Yield Product Exchangeable for Stock
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $553,351,384) $758,828,555
- --------------------------------------------------------------------------------
Receivable for investments sold 11,339,923
- --------------------------------------------------------------------------------
Income receivable 1,204,785
- --------------------------------------------------------------------------------
Receivable for shares sold 884,794
- -------------------------------------------------------------------------------- ------------
Total assets 772,258,057
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $11,141,798
- ------------------------------------------------------------------
Payable to Bank 833,336
- ------------------------------------------------------------------
Payable for shares redeemed 38,207
- ------------------------------------------------------------------
Accrued expenses 144,629
- ------------------------------------------------------------------ -----------
Total liabilities 12,157,970
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 23,359,781 shares outstanding $760,100,087
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $493,278,605
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments 205,477,171
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 60,595,553
- --------------------------------------------------------------------------------
Undistributed net investment income 748,758
- -------------------------------------------------------------------------------- ------------
Total Net Assets $760,100,087
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
$760,100,087 / 23,359,781 shares outstanding $32.54
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
Dividends $ 7,773,302
- --------------------------------------------------------------------------------
Interest 1,707,903
- -------------------------------------------------------------------------------- ------------
Total income 9,481,205
- --------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------
Investment advisory fee $2,545,940
- -------------------------------------------------------------------
Administrative personnel and services fee 264,325
- -------------------------------------------------------------------
Custodian fees 108,697
- -------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 49,843
- -------------------------------------------------------------------
Directors'/Trustees' fees 7,401
- -------------------------------------------------------------------
Auditing fees 7,462
- -------------------------------------------------------------------
Legal fees 3,735
- -------------------------------------------------------------------
Portfolio accounting fees 56,191
- -------------------------------------------------------------------
Shareholder services fee 873,876
- -------------------------------------------------------------------
Share registration costs 16,498
- -------------------------------------------------------------------
Printing and postage 20,081
- -------------------------------------------------------------------
Insurance premiums 5,097
- -------------------------------------------------------------------
Taxes 15,793
- -------------------------------------------------------------------
Miscellaneous 4,197
- ------------------------------------------------------------------- ----------
Total expenses 3,979,136
- -------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------
Waiver of shareholder services fee (524,326)
- ------------------------------------------------------------------- ----------
Net expenses 3,454,810
- -------------------------------------------------------------------------------- ------------
Net investment income 6,026,395
- -------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- --------------------------------------------------------------------------------
Net realized gain on investments 60,597,003
- --------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 27,380,030
- -------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 87,977,033
- -------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 94,003,428
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 6,026,395 $ 9,973,993
- ------------------------------------------------------
Net realized gain (loss) on investments ($60,597,003
net gain and $45,017,308 net gain, respectively, as
computed for federal tax purposes) 60,597,003 45,305,647
- ------------------------------------------------------
Net change in unrealized appreciation (depreciation) 27,380,030 58,089,861
- ------------------------------------------------------ --------------- ----------------
Change in net assets resulting from operations 94,003,428 113,369,501
- ------------------------------------------------------ --------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income (5,491,521) (10,498,641)
- ------------------------------------------------------
Distributions from net realized gains (45,017,605) (15,442,313)
- ------------------------------------------------------ --------------- ----------------
Change in net assets resulting from distributions
to shareholders (50,509,126) (25,940,954)
- ------------------------------------------------------ --------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 155,341,937 146,619,990
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 29,022,739 13,596,554
- ------------------------------------------------------
Cost of shares redeemed (99,828,115) (216,239,762)
- ------------------------------------------------------ --------------- ----------------
Change in net assets resulting from share
transactions 84,536,561 (56,023,218)
- ------------------------------------------------------ --------------- ----------------
Change in net assets 128,030,863 31,405,329
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 632,069,224 600,663,895
- ------------------------------------------------------ --------------- ----------------
End of period (including undistributed net investment
income of $748,758 and $213,884, respectively) $760,100,087 $ 632,069,224
- ------------------------------------------------------ --------------- ----------------
</TABLE>
(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>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, YEAR ENDED OCTOBER 31, JANUARY 31,
----------- ---------------------------------------------------------------------------- ----------------
1996 1995 1994 1993 1992 1991 1990 1989 1988(A) 1988 1987
----------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD $ 30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10 $24.00 $20.43
- ---------------
INCOME FROM
INVESTMENT
OPERATIONS
- ---------------
Net investment
income 0.27 0.47 0.46 0.48 0.56 0.51 0.70 0.70 0.52 0.68 0.66
- ---------------
Net realized
and unrealized
gain (loss) on
investments 4.00 5.04 0.68 4.27 1.79 6.23 (4.42) 2.34 1.03 (1.50) 4.99
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total from
investment
operations 4.27 5.51 1.14 4.75 2.35 6.74 (3.72) 3.04 1.55 (0.82) 5.65
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
LESS
DISTRIBUTIONS
- ---------------
Distributions
from net
investment
income (0.25) (0.49) (0.43) (0.49) (0.55) (0.56) (0.78) (0.65) (0.52) (0.64) (0.64)
- ---------------
Distributions
in excess of
net investment
income(b) -- -- -- (0.02) -- -- -- -- -- -- --
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total
distributions
from net
investment
income (0.25) (0.49) (0.43) (0.51) (0.55) (0.56) (0.78) (0.65) (0.52) (0.64) (0.64)
- ---------------
Distributions
from net
realized
gain on
investments (2.14) (0.69) (0.78) (2.02) (1.61) (0.74) (2.14) (0.07) (0.26) (0.44) (1.44)
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total
distributions (2.39) (1.18) (1.21) (2.53) (2.16) (1.30) (2.92) (0.72) (0.78) (1.08) (2.08)
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
NET ASSET
VALUE, END OF
PERIOD $ 32.54 $30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10 $24.00
- --------------- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL RETURN
(C) 14.66% 21.98% 4.55% 20.88% 10.78% 37.50% (16.36%) 13.48% 7.14% (3.64%) 29.02%
- ---------------
RATIOS TO
AVERAGE NET
ASSETS
- ---------------
Expenses 0.99%* 1.01% 0.97% 0.97% 0.99% 1.00% 0.98% 0.95% 0.94%* 0.89% 0.93%
- ---------------
Net investment
income 1.72%* 1.71% 1.81% 1.83% 2.33% 2.25% 3.03% 2.75% 3.08%* 2.82% 3.04%
- ---------------
Expense
waiver/
reimbursement(d) 0.15%* 0.15% -- -- -- -- -- -- -- -- --
- ---------------
SUPPLEMENTAL
DATA
- ---------------
Net assets,
end of period
(000 omitted) $760,100 $632,069 $600,664 $554,062 $386,490 $369,505 $332,241 $573,047 $636,426 $675,110 $611,856
- ---------------
Average
commission
rate paid $0.0519 -- -- -- -- -- -- -- -- -- --
- ---------------
Portfolio
turnover 31% 42% 28% 26% 54% 49% 53% 35% 31% 51% 19%
- ---------------
</TABLE>
* Computed on an annualized basis.
(a) For the nine months ended October 31, 1988.
(b) 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.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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. The investment objective of the Trust is to provide growth
of income and capital by investing principally in a professionally-managed and
diversified portfolio of common stock of high-quality companies.
(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 a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market 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 under repurchase
agreement transactions. Additionally, procedures have been established by
the Trust to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
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 and/or
standards reviewed or 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--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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
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 income. Accordingly, no
provisions for federal tax are necessary.
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Trust or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees. The Trust will not
incur any registration costs upon such resales. The Trust's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Trust's pricing committee.
Additional information on each restricted security held at April 30, 1996
is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
-------------------------------------------- ------------------ ----------------
<S> <C> <C>
Westinghouse Electric Corp. 9/25/1995-2/7/1996 $ 14,373,200
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
(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 shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
- ----------------------------------------------------
Shares sold 4,917,258 5,349,711
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 975,889 541,686
- ----------------------------------------------------
Shares redeemed (3,151,410) (8,086,028)
- ---------------------------------------------------- -------------- --------------
Net change resulting from share transactions 2,741,737 (2,194,631)
- ---------------------------------------------------- -------------- --------------
</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 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The fee paid to FServ 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 0.25%
of daily average net assets of the Trust shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Trust. The fee
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
paid to FServ is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Trust's accounting records for
which it receives a fee. 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, 1996, were as follows:
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------
Purchases $220,831,626
- ----------------------------------------------------------------------------- ------------
Sales $200,730,243
- ----------------------------------------------------------------------------- ------------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Executive Vice President
Gregor F. Meyer John W. McGonigle
John E. Murray, Jr. Executive Vice President,
Wesley W. Posvar Secretary and Treasurer
Marjorie P. Smuts Richard B. Fisher
Vice President
Douglas L. Hein
Assistant Treasurer
S. Elliott Cohan
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.
