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, 1997 through
April 30, 1998. The report begins with a discussion by the trust's portfolio
manager, followed by a complete listing of the trust's holdings and its
financial statements.
The trust is managed to pursue long-term growth through a 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, Chevron, Eastman Kodak, General Motors, Kimberly-Clark, MCI, Readers
Digest, and Wal-Mart.
Over the six-month reporting period, Federated Stock Trust's diversified
portfolio produced a total return of 19.92%* through $0.18 per share in
dividends and sizable capital gains of $7.22. Total net assets surpassed the
$1.0 billion mark, reaching approximately $1.5 billion on April 30, 1998.
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,
[Graphic]
Glen R. Johnson
President
June 15, 1998
* Performance quoted represents 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 first half of the fund's fiscal year was marked by a dramatic continuation
of the bull market with the Standard and Poor's Composite Index of 500 stocks
(the "S&P 500"*) returning over 22%. The period began with concerns over Asia,
but as 1998 began to unfold, those concerns seemed to dissipate and the prospect
for a nirvana of moderate, non-inflationary growth regained its grip on the
market. For the six-month period ended April 30, 1998, the fund returned
19.92%** compared to 22.44% for the S&P 500 and 17.37% for the Average Growth &
Income Fund as tracked by Lipper Analytical.*** The six months were marked by a
flight to quality as stock investors showed a strong preference for the largest
capitalization stocks which dominate the returns of the S&P 500. In fact, the
average stock in the S&P 500, as measured by the equal-weighted S&P 500,
returned only 17.99% for the past six months and small capitalization stocks, as
measured by the Russell 2000 Index,* returned only 11.88%. This dominance by the
richly valued, multi-national "nifty fifty" stocks has made it difficult for
active managers to outperform the S&P 500 benchmark.
There currently are significant tailwinds pushing the stock market: ample
liquidity driven by favorable demographics, low inflation and interest rates,
increased productivity due to technology, and enormous free cash flow generation
by corporate America. While these forces can justify current valuations on a
backward looking basis, moving forward it is imperative that corporate earnings
remain strong and inflation remains subdued for this bull market to continue.
There is nothing on the near-term horizon to suggest that this cannot be
accomplished, however, one must recognize that the margin for error is quite
small given the market's high valuation.
The dramatic runup in equity prices has made it more difficult to find companies
which appear undervalued on an absolute basis. Our equity investment philosophy
remains to be focused on purchasing stocks which appear undervalued relative to
their history, relative to the market and to their expected earnings growth.
Recent purchases which fit this description include:
SUN MICROSYSTEMS: This undervalued leading manufacturer of network computing
systems should benefit from the technological dominance of its Unix-based
workstations versus the much feared Microsoft NT technology.
FPL GROUP: A high-quality play in the under-appreciated electric utility
industry. Excellent management and an attractive service area make this a
good defensive addition to the fund.
* The S&P 500 is an unmanaged composite index of common stock in industry,
transportation, and financial and public utility companies. The Russell 2000
Index is an unmanaged Index consisting of approximately 2000 small
capitalization common stocks. Investments cannot be made in an index.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
investor's shares, when redeemed, may be worth more or less than their original
cost.
*** Lipper figures represent the average of the total returns reported by all
of the mutual funds designated by Lipper Analytical Services, Inc. as falling
into the respective categories indicated. These figures do not reflect sales
charges.
PORTFOLIO OF INVESTMENTS
FEDERATED STOCK TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--99.1%
BASIC INDUSTRY--4.2%
896,000 Archer-Daniels-Midland Co. $ 19,264,000
154,000 Dow Chemical Co. 14,889,875
1,136,500 LTV Corp. 14,774,500
234,000 Union Camp Corp. 14,127,750
TOTAL 63,056,125
CONSUMER DURABLES--5.0%
615,500 Cooper Tire & Rubber Co. 14,695,063
228,800 Eastman Kodak Co. 16,516,500
205,000 General Motors Corp. 13,811,875
424,000 Hasbro, Inc. 15,608,500
459,500 Rubbermaid, Inc. 13,153,188
TOTAL 73,785,126
CONSUMER NON-DURABLES--6.6%
252,800 BestFoods 13,872,400
293,000 Kimberly-Clark Corp. 14,869,750
277,200 Philip Morris Cos., Inc. 10,343,025
232,000 RJR Nabisco Holdings Corp. 6,452,500
244,200 Sara Lee Corp. 14,545,163
554,500 UST, Inc. 15,283,406
306,000 Unilever N.V., ADR 22,835,250
TOTAL 98,201,494
ENERGY MINERALS--11.1%
136,900 Atlantic Richfield Co. 10,678,200
218,100 Chevron Corp. 18,034,144
673,600 ENSCO International, Inc. 19,029,200
272,000 Exxon Corp. 19,839,000
423,000 Occidental Petroleum Corp. 12,452,063
196,500 Royal Dutch Petroleum Co., ADR 11,114,531
531,900 Sun Co., Inc. 21,508,706
303,000 Texaco, Inc. 18,634,500
539,500 USX Corp. 19,320,844
410,500 YPF Sociedad Anonima, ADR 14,316,188
TOTAL 164,927,376
</TABLE>
FEDERATED STOCK TRUST
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--CONTINUED
FINANCE--12.5%
3 AEGON N.V. $ 399
254,000 Allmerica Financial Corp. 15,906,750
182,000 Allstate Corp. 17,517,500
284,500 Bear Stearns Cos., Inc. 16,234,281
316,000 Block (H&R), Inc. 14,220,000
444,700 Boston Properties, Inc. 14,702,894
133,700 CIGNA Corp. 27,667,544
64,000 General RE Corp. 14,308,000
140,400 Hartford Financial Services Group, Inc. 15,549,300
198,800 MBIA Insurance Corporation 14,835,450
168,500 Marsh & McLennan Cos., Inc. 15,354,563
251,000 Morgan Stanley, Dean Witter & Co. 19,797,625
TOTAL 186,094,306
HEALTH CARE--11.4%
236,000 Abbott Laboratories 17,257,500
25,100 (a)Amgen, Inc. 1,496,588
1,236,200 (a)Beverly Enterprises, Inc. 19,470,150
254,500 Bristol-Myers Squibb Co. 26,945,188
134,100 Merck & Co., Inc. 16,159,050
451,500 (a)Perrigo Co. 5,841,281
656,500 Pharmacia & Upjohn, Inc. 27,614,031
239,500 Smithkline Beecham Corp., ADR 14,265,219
734,000 U.S. Surgical Corp. 23,121,000
244,500 United Healthcare Corp. 17,176,125
TOTAL 169,346,132
PRODUCER MANUFACTURING--8.8%
729,700 ITT Industries, Inc. 26,588,444
471,500 Ingersoll-Rand Co. 21,718,469
336,000 Johnson Controls, Inc. 19,950,000
450,600 (a)Lexmark Intl. Group, Class A 26,078,475
222,000 Loews Corp. 22,213,875
328,800 Parker-Hannifin Corp. 14,672,700
TOTAL 131,221,963
</TABLE>
FEDERATED STOCK TRUST
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--CONTINUED
RETAIL TRADE--3.7%
404,600 Dillards, Inc., Class A $ 14,818,475
880,900 (a)K Mart Corp. 15,360,694
511,500 Wal-Mart Stores, Inc. 25,862,719
TOTAL 56,041,888
SERVICES--9.5%
151,300 ABB AB, ADR 23,602,800
1,221,500 News Corp., Ltd., ADR 28,476,219
570,500 Readers Digest Association, Inc., Class A 15,332,188
507,500 (a)Tricon Global Restaurants, Inc. 16,113,125
318,500 (a)Viacom, Inc., Class A 18,393,375
202,500 (a)Viacom, Inc., Class B 11,745,000
810,200 Waste Management, Inc. 27,141,700
TOTAL 140,804,407
TECHNOLOGY--11.2%
395,500 AMP, Inc. 15,548,094
301,500 (a)Cabletron Systems, Inc. 3,994,875
962,000 First Data Corp. 32,587,750
143,700 International Business Machines Corp. 16,651,238
62,500 Matsushita Electric Industrial Co., ADR 10,125,000
139,500 Northrop Corp. 14,743,406
1,616,000 (a)Novell, Inc. 16,160,000
251,500 Raytheon Co., Class A 13,879,709
469,000 (a)Seagate Technology, Inc. 12,516,438
296,500 (a)Storage Technology Corp. 25,035,719
131,500 (a)Sun Microsystems, Inc. 5,416,156
TOTAL 166,658,385
TRANSPORTATION--2.9%
395,100 CNF Transportation, Inc. 15,260,738
364,000 KLM Royal Dutch Airlines, ADR 14,764,750
395,000 Ryder Systems, Inc. 13,750,938
TOTAL 43,776,426
</TABLE>
FEDERATED STOCK TRUST
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMON STOCKS--CONTINUED
UTILITIES--12.2%
163,400 Bell Atlantic Corp. $ 15,288,113
320,000 CMS Energy Corp. 13,980,000
182,000 Coastal Corp. 13,001,625
179,500 Columbia Gas System, Inc. 14,584,375
688,000 Entergy Corp. 17,114,000
233,400 FPL Group, Inc. 14,485,388
258,000 GTE Corp. 15,076,875
519,500 Houston Industries, Inc. 15,097,969
273,300 MCI Communications Corp. 13,750,406
584,000 P G & E Corp. 18,907,000
426,000 Public Service Enterprises Group, Inc. 14,297,625
311,000 U.S. West, Inc. 16,405,259
TOTAL 181,988,635
TOTAL COMMON STOCKS (IDENTIFIED 1,475,902,263
COST $1,072,733,162)
(B)REPURCHASE AGREEMENT--1.3%
$ 19,155,000 BT Securities Corp., 5.53%, dated 4/30/1998, due 5/1/1998 19,155,000
TOTAL INVESTMENTS (IDENTIFIED COST $1,091,888,162/AT $ 1,495,057,263
AMORTIZED COST)(C)
</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 $1,091,888,162.
The net unrealized appreciation of investments on a federal tax basis amounts to
$403,169,101 which is comprised of $424,437,133 appreciation and $21,268,032
depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($1,489,817,032) at April 30, 1998.
The following acronym is used throughout this portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
FEDERATED STOCK TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at value (identified cost $ 1,495,057,263
$1,091,888,162)
Income receivable 1,844,819
Receivable for investments sold 9,137,907
Receivable for shares sold 2,221,102
Total assets 1,508,261,091
LIABILITIES:
Payable for investments purchased $ 15,299,099
Payable for shares redeemed 13,285
Payable to Bank 2,728,848
Payable for taxes withheld 100,299
Accrued expenses 302,528
Total liabilities 18,444,059
Net Assets for 37,809,537 shares outstanding $1,489,817,032
NET ASSETS CONSIST OF:
Paid in capital $ 980,971,186
Net unrealized appreciation of investments 403,169,101
Accumulated net realized gain on investments 104,616,498
Undistributed net investment income 1,060,247
Total net assets $ 1,489,817,032
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER
SHARE:
$1,489,817,032 / 37,809,537 shares outstanding $39.40
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
FEDERATED STOCK TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 11,530,057
Interest 1,302,604
Total income 12,832,661
EXPENSES:
Investment advisory fee $ 4,451,285
Administrative personnel and services fee 489,388
Custodian fees 21,387
Transfer and dividend disbursing agent fees and expenses 149,385
Directors'/Trustees' fees 2,664
Auditing fees 7,931
Legal fees 3,439
Portfolio accounting fees 78,403
Shareholder services fee 1,622,312
Share registration costs 32,225
Printing and postage 22,022
Insurance premiums 4,690
Taxes 39,090
Miscellaneous 10,435
Total expenses 6,934,656
Waivers --
Waiver of shareholder services fee (696,196)
Net expenses 6,238,460
Net investment income 6,594,201
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 104,699,130
Net change in unrealized appreciation of investments 129,969,029
Net realized and unrealized gain on investments 234,668,159
Change in net assets resulting from operations $ 241,262,360
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
FEDERATED STOCK TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
(UNAUDITED) ENDED
APRIL 30, OCTOBER 31,
1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 6,594,201 $ 10,045,256
Net realized gain (loss) on investments ($104,699,130 and 104,699,130 216,054,303
$216,060,330, respectively, as computed for federal tax
purposes)
Net change in unrealized appreciation 129,969,029 60,971,289
Change in net assets resulting from operations 241,262,360 287,070,848
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (6,033,454) (10,361,425)
Distributions from net realized gains (216,135,367) (97,657,959)
Change in net assets resulting from distributions to (222,168,821) (108,019,384)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 358,354,328 460,006,623
Net asset value of shares issued to shareholders in payment of 138,862,091 64,586,473
distributions declared
Cost of shares redeemed (200,510,786) (360,171,984)
Change in net assets resulting from share transactions 296,705,633 164,421,112
Change in net assets 315,799,172 343,472,576
NET ASSETS:
Beginning of period 1,174,017,860 830,545,284
End of period (including undistributed net investment income of $ 1,489,817,032 $ 1,174,017,860
$1,060,247 and $499,500, respectively)
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF $39.90 $34.38 $30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.19 0.36 0.53 0.47 0.46 0.48 0.56 0.51 0.70 0.70
Net realized and
unrealized gain
(loss) on 6.71 9.54 5.84 5.04 0.68 4.27 1.79 6.23 (4.42) 2.34
investments
Total from
investment 6.90 9.90 6.37 5.51 1.14 4.75 2.35 6.74 (3.72) 3.04
operations
LESS
DISTRIBUTIONS(D)
Distributions
from net (0.18) (0.38) (0.51) (0.49) (0.43) (0.49) (0.55) (0.56) (0.78) (0.65)
investment income
Distributions in
excess of net -- -- -- -- -- (0.02)(d) -- -- -- --
investment income
Total
distributions
from net (0.18) (0.38) (0.51) (0.49) (0.43) (0.51) (0.55) (0.56) (0.78) (0.65)
investment income
Distributions
from net realized
gain on (7.22) (4.00) (2.14) (0.69) (0.78) (2.02) (1.61) (0.74) (2.14) (0.07)
investments
Total
distributions (7.40) (4.38) (2.65) (1.18) (1.21) (2.53) (2.16) (1.30) (2.92) (0.72)
NET ASSET VALUE,
END OF PERIOD $39.40 $39.90 $34.38 $30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19
TOTAL RETURN(A) 19.92% 32.27% 22.08% 21.98% 4.55% 20.88% 10.78% 37.50% (16.36)% 13.48%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.96%* 0.99% 0.99% 1.01% 0.97% 0.97% 0.99% 1.00% 0.98% 0.95%
Net investment
income 1.02%* 0.99% 1.64% 1.71% 1.81% 1.83% 2.33% 2.25% 3.03% 2.75%
Expense waiver/
reimbursement(b) 0.11%* 0.13% 0.15% 0.15% -- -- -- -- -- --
SUPPLEMENTAL DATA
Net assets, end
of period (000 $1,489,817 $1,174,018 $830,545 $632,069 $600,644 $554,062 $386,490 $369,505 $332,241 $573,047
omitted)
Average
commission rate $0.0487 $0.0497 $0.0273 -- -- -- -- -- -- --
paid(c)
Portfolio
turnover 24% 71% 55% 42% 28% 26% 54% 49% 53% 35%
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(d) Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These distributions do
not represent a return of capital for federal income tax purposes.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
FEDERATED STOCK TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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.
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.
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>
YEAR YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
1998 1997
<S> <C> <C>
Shares sold 9,663,711 12,996,702
Shares issued to shareholders in payment of distributions declared 4,006,397 2,042,263
Shares redeemed (5,284,968) (9,770,103)
Net change resulting from share transactions 8,385,140 5,268,862
</TABLE>
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 of 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 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, Inc. 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.
YEAR 2000 ISSUE
Similar to other financial organizations, the Trust could be adversely affected
if the computer systems used by the Trust's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Trust's Adviser and admininstrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Trust's other service providers.
At this time, however, there can be no assurance that these steps willl be
sufficient to avoid any adverse impact to the Trust.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended April 30, 1998, were as follows:
PURCHASES $383,048,497
SALES $313,252,775
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
Karen M. Brownlee
Assistant Secretary
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 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.
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Federated Investors
Federated Stock Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS APRIL 30, 1998
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Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 313900102
8083101 (6/98)
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