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 reporting period from November 1, 1996,
through April 30, 1997. 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 portfolio included many well-known names, such as Allstate,
Bristol-Myers Squibb, Chase Manhattan, Exxon, General Motors, Merck, RJR
Nabisco, Rubbermaid, and Wal-Mart.
Over the six-month reporting period ended April 30, 1997, Federated Stock
Trust's diversified portfolio achieved a total return of 12.96%* through $0.21
per share in income dividends, and $4.00 in capital gains.* Total net assets
reached $972 million on April 30, 1997.
Thank you for participating in the growth opportunities of high-quality stocks
through Federated Stock Trust. As always, we will 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, 1997
* Performance quoted reflects past performance and is not indicative of future
results. 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 United States equity market has shown surprising strength so far in 1997,
especially given the strength of 1995 and 1996. The temptation of many fund
managers to attempt to time the market has been high and given us an advantage
over some of our competitors. For the six-month and twelve-month periods ended
April 30, 1997, the fund's total returns were 12.96% and 20.27% respectively*
compared to the Standard & Poor's Composite Index of 500 Stocks (the "S&P
500")** total return of 14.71% and 25.14%, respectively. This overall strong
performance of the fund was attributed to being fully invested as well as a
"flight to quality" which often occurs when the direction of the market is in
question.
While many argue that the market is fully valued, if not overvalued, we still
found high quality companies that have not fully participated in the market's
historic advance and should continue to have favorable valuations and
fundamental outlooks.
We believe that the remainder of 1997 will be one of stock selection versus
market participation. Volatility and dispersion should continue to increase as
investors focus more and more on the quality of earnings and reasonable
valuations. Our only significant industry overweight at this time is Energy, as
supply remains muted given the historic underinvestment and demand increases as
more and more countries continue to industrialize.
Recent purchases with attractive valuations and improving fundamentals include:
Sun Company -- The largest oil refiner in the United States has undergone a
recent management change and is a "pure play" in a consolidating industry, which
is in the process of improving profitability.
Tele-Communications, Inc. -- The largest cable television company, which is in
the midst of eliminating its historic investments in new businesses and
refocusing on its core business.
Recent sales include:
Baker Hughes -- Fully valued.
E.I. DuPont deNemours & Co. -- Valuation target reached.
* Performance quoted reflects past performance and is not indicative of future
results. 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.
** The S&P 500 is an unmanaged a composite index of common stocks in industry,
transportation, and financial and public utility companies. Investments
cannot be made in an index.
FEDERATED STOCK TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITIES--98.6%
- -----------------------------------------------------------------------------------
BASIC INDUSTRY--4.5%
----------------------------------------------------------------
175,000 Betz Laboratories, Inc. $ 11,200,000
----------------------------------------------------------------
115,000 Dow Chemical Co. 9,760,625
----------------------------------------------------------------
823,000 LTV Corp. 10,801,875
----------------------------------------------------------------
297,500 Morton International, Inc. 12,457,813
---------------------------------------------------------------- ------------
Total 44,220,313
---------------------------------------------------------------- ------------
CONSUMER DURABLES--3.6%
----------------------------------------------------------------
128,000 General Motors Corp. 7,408,000
----------------------------------------------------------------
346,500 Martin Marietta Materials 9,442,125
----------------------------------------------------------------
743,500 Rubbermaid, Inc. 17,844,000
---------------------------------------------------------------- ------------
Total 34,694,125
---------------------------------------------------------------- ------------
CONSUMER NON-DURABLES--11.9%
----------------------------------------------------------------
105,700 CPC International, Inc. 8,733,462
----------------------------------------------------------------
210,000 Kimberly-Clark Corp. 10,762,500
----------------------------------------------------------------
689,200 PepsiCo, Inc. 24,035,850
----------------------------------------------------------------
194,400 Philip Morris Cos., Inc. 7,654,500
----------------------------------------------------------------
232,000 RJR Nabisco Holdings Corp. 6,902,000
----------------------------------------------------------------
466,500 Russell Corp. 12,945,375
----------------------------------------------------------------
194,100 Tambrands, Inc. 9,122,700
----------------------------------------------------------------
133,100 Unilever N.V., ADR 26,120,875
----------------------------------------------------------------
131,200 V.F. Corp. 9,462,800
---------------------------------------------------------------- ------------
Total 115,740,062
---------------------------------------------------------------- ------------
ENERGY MINERALS--11.4%
----------------------------------------------------------------
175,000 Amerada-Hess Corp. 8,509,375
----------------------------------------------------------------
67,000 Atlantic Richfield Co. 9,120,375
----------------------------------------------------------------
216,600 Chevron Corp. 14,837,100
----------------------------------------------------------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITIES--CONTINUED
- -----------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
----------------------------------------------------------------
271,000 Exxon Corp. $ 15,345,375
----------------------------------------------------------------
387,200 Occidental Petroleum Corp. 8,566,800
----------------------------------------------------------------
48,500 Royal Dutch Petroleum Co., ADR 8,742,125
----------------------------------------------------------------
254,500 Sun Co., Inc. 6,966,938
----------------------------------------------------------------
148,900 Texaco, Inc. 15,708,950
----------------------------------------------------------------
536,500 USX Corp. 14,820,813
----------------------------------------------------------------
129,610 (a) Western Atlas, Inc. 8,035,820
---------------------------------------------------------------- ------------
Total 110,653,671
---------------------------------------------------------------- ------------
FINANCE--15.2%
----------------------------------------------------------------
467,000 Allmerica Financial Corp. 16,812,000
----------------------------------------------------------------
240,100 Allstate Corp. 15,726,550
----------------------------------------------------------------
306,900 Bear Stearns Cos., Inc. 9,360,450
----------------------------------------------------------------
143,600 CIGNA Corp. 21,593,850
----------------------------------------------------------------
149,200 Chase Manhattan Corp. 13,819,650
----------------------------------------------------------------
250,000 Dean Witter, Discover & Co. 9,562,500
----------------------------------------------------------------
227,000 Federal National Mortgage Association 9,335,375
----------------------------------------------------------------
165,100 Marsh & McLennan Cos., Inc. 19,894,550
----------------------------------------------------------------
198,500 National City Corp. 9,676,875
----------------------------------------------------------------
176,200 Providian Corp. 10,175,550
----------------------------------------------------------------
213,401 Travelers Group, Inc. 11,817,080
---------------------------------------------------------------- ------------
Total 147,774,430
---------------------------------------------------------------- ------------
HEALTH CARE--12.6%
----------------------------------------------------------------
235,000 Abbott Laboratories 14,335,000
----------------------------------------------------------------
142,500 American Home Products Corp. 9,440,625
----------------------------------------------------------------
315,000 Bard (C.R.), Inc. 10,001,250
----------------------------------------------------------------
733,000 (a) Beverly Enterprises, Inc. 10,628,500
----------------------------------------------------------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITIES--CONTINUED
- -----------------------------------------------------------------------------------
HEALTH CARE--CONTINUED
----------------------------------------------------------------
430,000 (a) Biomet, Inc. $ 6,530,625
----------------------------------------------------------------
286,000 Bristol-Myers Squibb Co. 18,733,000
----------------------------------------------------------------
280,000 Columbia/HCA Healthcare Corp. 9,800,000
----------------------------------------------------------------
531,200 (a) Healthsource, Inc. 11,155,200
----------------------------------------------------------------
122,100 Merck & Co., Inc. 11,050,050
----------------------------------------------------------------
124,900 Smithkline Beecham Corp., ADR 10,070,063
----------------------------------------------------------------
228,500 United Healthcare Corp. 11,110,813
---------------------------------------------------------------- ------------
Total 122,855,126
---------------------------------------------------------------- ------------
PRODUCER MANUFACTURING--6.7%
----------------------------------------------------------------
737,500 (a) ITT Industries, Inc. 18,621,875
----------------------------------------------------------------
404,500 Ingersoll-Rand Co. 19,871,062
----------------------------------------------------------------
405,500 (a) Lexmark Intl. Group, Class A 9,427,875
----------------------------------------------------------------
91,100 Loews Corp. 8,369,812
----------------------------------------------------------------
126,500 PACCAR, Inc. 8,839,188
---------------------------------------------------------------- ------------
Total 65,129,812
---------------------------------------------------------------- ------------
RETAIL TRADE--7.0%
----------------------------------------------------------------
455,000 Dayton-Hudson Corp. 20,475,000
----------------------------------------------------------------
1,308,800 K Mart Corp. 17,832,400
----------------------------------------------------------------
247,500 (a) Meyer (Fred), Inc. 10,178,437
----------------------------------------------------------------
682,500 Wal-Mart Stores, Inc. 19,280,625
---------------------------------------------------------------- ------------
Total 67,766,462
---------------------------------------------------------------- ------------
SERVICES--2.5%
----------------------------------------------------------------
329,300 Block (H&R), Inc. 10,619,925
----------------------------------------------------------------
483,000 Browning-Ferris Industries, Inc. 13,705,125
---------------------------------------------------------------- ------------
Total 24,325,050
---------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
EQUITIES--CONTINUED
- -----------------------------------------------------------------------------------
TECHNOLOGY--10.0%
----------------------------------------------------------------
346,000 AMP, Inc. $ 12,412,750
----------------------------------------------------------------
301,500 (a) Cabletron Systems, Inc. 10,401,750
----------------------------------------------------------------
318,700 Electronic Data Systems Corp. 10,636,612
----------------------------------------------------------------
242,500 General Motors Corp., Class H 13,034,375
----------------------------------------------------------------
64,500 International Business Machines Corp. 10,368,375
----------------------------------------------------------------
176,000 Lucent Technologies, Inc. 10,406,000
----------------------------------------------------------------
144,500 Raytheon Co. 6,303,813
----------------------------------------------------------------
138,500 Rockwell International Corp. 9,210,250
----------------------------------------------------------------
408,000 (a) Storage Technology Corp. 14,331,000
---------------------------------------------------------------- ------------
Total 97,104,925
---------------------------------------------------------------- ------------
TRANSPORTATION--2.3%
----------------------------------------------------------------
385,000 Consolidated Freightways, Inc. 11,453,750
----------------------------------------------------------------
365,000 (a) KLM Royal Dutch Airlines, ADR 10,858,750
---------------------------------------------------------------- ------------
Total 22,312,500
---------------------------------------------------------------- ------------
UTILITIES--10.9%
----------------------------------------------------------------
252,000 CMS Energy Corp. 8,001,000
----------------------------------------------------------------
182,000 Coastal Corp. 8,645,000
----------------------------------------------------------------
170,000 Columbia Gas System, Inc. 10,518,750
----------------------------------------------------------------
171,000 FPL Group, Inc. 7,630,875
----------------------------------------------------------------
315,000 GTE Corp. 14,450,625
----------------------------------------------------------------
443,000 Houston Industries, Inc. 8,860,000
----------------------------------------------------------------
519,500 MCI Communications Corp. 19,805,937
----------------------------------------------------------------
344,000 P G & E Corp. 8,256,000
----------------------------------------------------------------
1,409,100 (a) Tele-Communications, Inc., Class A 19,463,193
---------------------------------------------------------------- ------------
Total 105,631,380
---------------------------------------------------------------- ------------
TOTAL EQUITIES (IDENTIFIED COST $752,098,135) 958,207,856
---------------------------------------------------------------- ------------
</TABLE>
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
(B) REPURCHASE AGREEMENT--1.1%
- -----------------------------------------------------------------------------------
$10,530,000 BT Securities Corporation, 5.43%, dated 4/30/1997, due 5/1/1997
(AT AMORTIZED COST) $ 10,530,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $762,628,135)(C) $968,737,856
---------------------------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(b) 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.
(c) The cost of investments for federal tax purposes amounts to $762,628,135.
The net unrealized appreciation of investments on a federal tax basis
amounts to $206,109,721 which is comprised of $217,486,877 appreciation and
$11,377,156 depreciation at April 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($971,624,403) at April 30, 1997.
The following acronym is used throughout this portfolio:
ADR -- American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $762,628,135) $968,737,856
- --------------------------------------------------------------------------------
Income receivable 762,335
- --------------------------------------------------------------------------------
Receivable for investments sold 8,363,938
- --------------------------------------------------------------------------------
Receivable for shares sold 1,068,889
- -------------------------------------------------------------------------------- ------------
Total assets 978,933,018
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $ 7,103,306
- ------------------------------------------------------------------
Payable for shares redeemed 1,821
- ------------------------------------------------------------------
Accrued expenses 203,488
- ------------------------------------------------------------------ -----------
Total liabilities 7,308,615
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 28,394,935 shares outstanding $971,624,403
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $651,830,785
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments 206,109,721
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 113,637,118
- --------------------------------------------------------------------------------
Undistributed net investment income 46,779
- -------------------------------------------------------------------------------- ------------
Total Net Assets $971,624,403
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$971,624,403 / 28,394,935 shares outstanding $34.22
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
Dividends $ 8,425,003
- --------------------------------------------------------------------------------
Interest 660,052
- -------------------------------------------------------------------------------- ------------
Total income 9,085,055
- --------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------
Investment advisory fee $3,183,046
- -------------------------------------------------------------------
Administrative personnel and services fee 335,269
- -------------------------------------------------------------------
Custodian fees 59,918
- -------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 213,040
- -------------------------------------------------------------------
Directors'/Trustees' fees 9,117
- -------------------------------------------------------------------
Auditing fees 7,421
- -------------------------------------------------------------------
Legal fees 3,439
- -------------------------------------------------------------------
Portfolio accounting fees 65,823
- -------------------------------------------------------------------
Shareholder services fee 1,110,032
- -------------------------------------------------------------------
Share registration costs 16,233
- -------------------------------------------------------------------
Printing and postage 24,341
- -------------------------------------------------------------------
Insurance premiums 5,430
- -------------------------------------------------------------------
Taxes 21,840
- -------------------------------------------------------------------
Miscellaneous 3,793
- ------------------------------------------------------------------- ----------
Total expenses 5,058,742
- -------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------
Waiver of shareholder services fee (621,618)
- ------------------------------------------------------------------- ----------
Net expenses 4,437,124
- -------------------------------------------------------------------------------- ------------
Net investment income 4,647,931
- -------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- --------------------------------------------------------------------------------
Net realized gain on investments 113,638,686
- --------------------------------------------------------------------------------
Net change in unrealized appreciation of investments (6,119,062)
- -------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 107,519,624
- -------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $112,167,555
- -------------------------------------------------------------------------------- ------------
</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, 1997 OCTOBER 31, 1996
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 4,647,931 $ 12,161,272
- ------------------------------------------------------
Net realized gain on investments ($113,638,686 and
$97,657,841, respectively, as computed for federal tax
purposes) 113,638,686 97,657,841
- ------------------------------------------------------
Net change in unrealized appreciation (6,119,062) 34,131,642
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from operations 112,167,555 143,950,755
- ------------------------------------------------------ ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income (5,416,821) (11,559,487)
- ------------------------------------------------------
Distributions from net realized gains (97,657,959) (45,017,605)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from distributions
to shareholders (103,074,780) (56,577,092)
- ------------------------------------------------------ ---------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 211,275,344 286,718,473
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 61,784,641 32,453,084
- ------------------------------------------------------
Cost of shares redeemed (141,073,641) (208,069,160)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from share
transactions 131,986,344 111,102,397
- ------------------------------------------------------ ---------------- ----------------
Change in net assets 141,079,119 198,476,060
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 830,545,284 632,069,224
- ------------------------------------------------------ ---------------- ----------------
End of period (including undistributed net investment
income of $46,779 and $815,669, respectively) $ 971,624,403 $ 830,545,284
- ------------------------------------------------------ ---------------- ----------------
</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,
----------- -------------------------------------------------------------------------------------- ----------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988(A) 1988 1987
----------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET
ASSET
VALUE,
BEGINNING
OF
PERIOD $ 34.38 $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 0.18 0.53 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 3.87 5.84 5.04 0.68 4.27 1.79 6.23 (4.42) 2.34 1.03 (1.50) 4.99
- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total
from
investment
operations 4.05 6.37 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 (0.21) (0.51) (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(d) -- -- -- -- (0.02) -- -- -- -- -- -- --
- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total
distributions
from net
investment
income (0.21) (0.51) (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 (4.00) (2.14) (0.69) (0.78) (2.02) (1.61) (0.74) (2.14) (0.07) (0.26) (0.44) (1.44)
- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total
distributions (4.21) (2.65) (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 $ 34.22 $34.38 $30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10 $24.00
- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL
RETURN(B) 12.96% 22.08% 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 1.00%* 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 1.05%* 1.64% 1.71% 1.81% 1.83% 2.33% 2.25% 3.03% 2.75% 3.08%* 2.82% 3.04%
- -----
Expense
waiver/
reimbursement(c) 0.14%* 0.15% 0.15% -- -- -- -- -- -- -- -- --
- -----
SUPPLEMENTAL
DATA
- -----
Net
assets,
end of
period
(000
omitted) $971,624 $830,545 $632,069 $600,664 $554,062 $386,490 $369,505 $332,241 $573,047 $636,426 $675,110 $611,856
- -----
Average
commission
rate
paid(e) $0.0431 $0.0273 -- -- -- -- -- -- -- -- -- --
- -----
Portfolio
turnover 37% 55% 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) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease for the shareholder services fee is
reflected in both the expense and net investment income ratios shown above.
(d) 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.
(e) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
This disclosure is required for fiscal years beginning on or after September
1, 1995.
(See Notes which are an integral part of the Financial Statements)
FEDERATED STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Stock Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act") as an 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.
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.
(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, 1997 OCTOBER 31, 1996
----------------- -----------------
<S> <C> <C>
- ----------------------------------------------------
Shares sold 6,460,423 8,931,554
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,971,670 1,080,218
- ----------------------------------------------------
Shares redeemed (4,192,693) (6,474,281)
- ---------------------------------------------------- -------------- --------------
Net change resulting from share transactions 4,239,400 3,537,491
- ---------------------------------------------------- -------------- --------------
</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 0.75% of the first $500 million in average daily net assets, 0.675% of
the second $500 million in average daily net assets, 0.60% of the third $500
million in average daily net assets, 0.525% of the fourth $500 million in
average daily net assets, and 0.40% of average daily net assets in excess of $2
billion. The Adviser will reimburse the Trust the amount limited, to the amount
of its advisory fee, by which the Trust's aggregate annual operating expenses
(excluding interest, taxes, brokerage commissions, expenses of registering and
qualifying the
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
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 average daily net assets of the Trust 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 AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Trust. The fee paid to FSSC 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, 1997, were as follows:
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------
Purchases $384,193,903
- ----------------------------------------------------------------------------- ------------
Sales $317,621,867
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</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 Treasurer and Secretary
Marjorie P. Smuts Richard B. Fisher
Vice President
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.
FEDERATED STOCK TRUST
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(412) 288-1900
July 1, 1997
EDGAR Operations Branch
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, Northwest
Washington, DC 20549
RE: FEDERATED STOCK TRUST (the "Trust")
1933 Act File No. 2-75756
1940 Act File No. 811-3385
The Semi-Annual Report to Shareholders of the above-referenced Trust
dated April 30, 1997, is hereby electronically transmitted pursuant to Section
30(b)(2) of the Investment Company Act of 1940 and Rule 30b2-1 thereunder.
Very truly yours,
/s/ Heather M. Aland
Heather M. Aland
Compliance Analyst
Enclosures
