<PAGE>
[COVER PAGE]
OPPENHEIMER VALUE STOCK FUND
Semiannual Report June 30, 1997
[LOGO]OPPENHEIMERFUNDS/SM/
THE RIGHT WAY TO INVEST
<PAGE>
This Fund is for people who seek long-term growth and current income by
investing in UNDERVALUED stocks of well-established companies.
HOW YOUR FUND IS MANAGED
Oppenheimer Value Stock Fund's basic investment strategy is to "buy low, sell
high." The Fund's managers invest in stocks they believe are priced below their
intrinsic value, and sell stock when they think they're overvalued. This
strategy offers the potential for long-term capital appreciation through
investment in well-established companies.
PERFORMANCE
Total returns for the 6 months ended 6/30/97 for Class A, B and C shares were
15.82%, 15.37% and 15.38%, respectively, without deducting sales charges.(1)
Your Fund's average annual total returns for Class A shares for the 1-,5- and
10-year periods ended 6/30/97 were 20.28%, 15.10% and 12.04%, respectively.
For Class B shares, average annual total returns for the 1-year period ended
6/30/97 and since inception on 5/1/93 were 21.65% and 16.25%, respectively. For
Class C shares, average annual total returns for the 1-year period ended 6/30/97
and since inception on 10/2/95 were 25.63% and 23.57%, respectively.(2)
ON JULY 25, 1997, OPPENHEIMER VALUE STOCK FUND WAS REORGANIZED INTO OPPENHEIMER
DISCIPLINED VALUE FUND.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING THE PERFORMANCE AND RANKINGS, PLEASE REMEMBER PAST PERFORMANCE DOES
NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAT THE ORIGINAL COST. For more
information, please review the prospectus carefully before you invest. On
1/1/97, the Fund's prior sub-adviser merged into its present sub-adviser.
1. Includes changes in net asset value per share without deducting sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
2. Class A returns include the current maximum initial sales charge of 5.75%.
Prior to 3/29/91, the Fund's maximum sales charge rate for Class A share was
lower, so that actual results would have been higher. Class B returns include
the applicable contingent deferred sales charge of 5% (1-year) and 2% (since
inception). Class C returns include the 1% contingent deferred sales change
for the 1-year result. An explanation of the different calculations is in the
Fund's prospectus.
2 Oppenheimer Value Stock Fund
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Value Stock Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Value Stock Fund
Dear Shareholder:
As we consider the world's financial markets over the past six months, some
global trends emerge. For example, inflation has hit its lowest level in three
decades worldwide, which has helped spur many bullish financial markets. The
United States has been a beneficiary of this low inflation environment, as well
as a strong dollar, robust corporate earnings and a healthy economy. However,
many financial analysts are now concerned that the United States has reached a
point in the business cycle where earnings could decline because companies are
unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe has
resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe, it's more
important than ever to maintain a diversified portfolio across different
countries and market sectors. Now is the time to speak to your financial adviser
to ensure that your assets are allocated properly, so you have the opportunity
to benefit from investments in both domestic and international funds. It's
important to remember that investing abroad can involve greater risk and
expenses -- including political and economic uncertainties -- and should be
undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
WWW.OPPENHEIMERFUNDS.COM, where you can access your account information and fund
performance data, 24 hours a day. The site also features prospectuses, timely
market updates and insightful commentaries. Our new shareholder reports and
presence on the Internet are just two examples of our commitment to keeping you
well informed.
Thank you for your confidence in OppenheimerFunds, THE RIGHT WAY TO INVEST. We
look forward to helping you reach your investment goals in the future.
/S/James C. Swain /S/Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1997
3 Oppenheimer Value Stock Fund
<PAGE>
JAMES MACALLEN
PORTFOLIO MANAGER
Q + A
An interview with your Fund's managers.
HOW HAS THE FUND PERFORMED DURING THE FIRST HALF OF 1997?
Oppenheimer Value Stock Fund's Class A shares were able to provide a cumulative
total return of 15.82%, before sales charges, for the six month period ended
June 30, 1997.(1)
WHY DID STOCK PRICES RISE AND FALL SO SHARPLY DURING THE PERIOD?
The past six months were indeed volatile ones. The stock market declined between
January and mid-April, producing the largest correction in several years. This
sell-off was mainly the result of investors' fears that an overheated economy
might rekindle inflationary pressures, which erode the value of financial assets
over time. Inflation concerns also prompted the nation's monetary policy makers
at the Federal Reserve Board to raise key short-term interest rates. When the
investment community later realized that inflationary forces were likely to
remain benign and that future interest-rate increases would probably be modest,
the market recaptured all of its losses - and surged to new highs - rising more
than 1,000 points between mid-April and the end of June.(2)
WHAT WAS YOUR STRATEGY DURING THESE UNCERTAIN MARKET CONDITIONS?
We employed the same conservative strategy during the past six months that we've
used consistently for many years: We sought large, dividend-paying stocks
selling at prices that we believed were lower than their true values. We used
disciplined principles of fundamental securities analysis to identify
undervalued companies with a history of solid returns, strong balance sheets,
competitive products and talented managements.
DID YOU FIND ATTRACTIVE CANDIDATES FOR THE FUND DURING THE PERIOD?
Yes. The market's weakness during March and April provided several opportunities
to buy companies at attractive prices. For example, we added a large Western
U.S. railroad company to the portfolio just as the market hit the bottom of the
correction. This stock's price had been driven down because of short-term
earnings disappointments that we believe are temporary and should not affect the
company's positive longer term outlook. Similarly, we found attractive values in
a leading
1. Includes change in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2. The Dow Jones Industrial Stock Average is a price-weighted average of 30
actively traded blue chip stocks. This widely recognized indicator of stock
market performance includes dividend reinvestments but does not take capital
gains distributions into consideration.
4 Oppenheimer Value Stock Fund
<PAGE>
manufacturer of industrial filters, and a diversified electric utility
in Tampa Florida.(3)
ARE YOU STILL FINDING GOOD VALUES AS THE STOCK MARKET HITS NEW HIGHS?
Yes, but such values have been harder to find as stock prices rose. More
importantly, rising stock prices brought some of our existing holdings to
approach full valuations. For example, we recently reduced our positions in a
major pharmaceutical company, and a leading insurer, when their stocks
approached our target prices. We also sold shares of large international oil
companies because their stock prices reflected our expectations for future oil
price trends and can no longer be considered undervalued.
DID THE BALANCE AMONG INDUSTRIES REPRESENTED IN THE FUND CHANGED?
We strive to achieve broad diversification to help reduce portfolio risks so
that a decline in any one stock would not severely affect the entire Fund. This
diversification naturally led to a certain balance among industries. The
industry weightings have not changed significantly, but on the margin, we
believe that an increased commitment to well-selected electrical utilities might
provide good total return at substantially lower risk. These stocks have
underperformed the market, and they should show very good defensive
characteristics, while having the opportunity to produce dependable earnings
gains.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
We are cautiously optimistic about the stock market's prospects during the
second half of 1997. On the positive side, the influences that have driven the
market's advance remain in place: moderate economic growth, healthy corporate
earnings, low inflation and rising retirement plan savings. Indeed, it appears
that the high rate of economic growth that unsettled investors during March and
April is abating and a "Goldilocks" economy (not too hot, not too cold) should
prevail again. On the other hand, experience tells us that no market rises
forever, and that corrections -- and more severe downtrends -- inevitably occur
from time to time. Therefore, while we believe that further stock market gains
are quite possible, we are prepared for the possibility that they may not
materialize.//
3. The Fund's portfolio is subject to change.
5 Oppenheimer Value Stock Fund
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(Intentionally Left Blank)
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<TABLE>
<CAPTION>
================================================================================
STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
MARKET VALUE
SHARES SEE NOTE 1
==============================================================================================================================
COMMON STOCKS - 91.6%
- ------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 6.5%
- ------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 4.4%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Du Pont (E.I.) De Nemours & Co. 43,000 $ 2,703,625
- ------------------------------------------------------------------------------------------------------------------------------
Lubrizol Corp. (The) 43,400 1,820,087
- ------------------------------------------------------------------------------------------------------------------------------
Nalco Chemical Co. 59,200 2,286,600
- ------------------------------------------------------------------------------------------------------------------------------
Rohm & Haas Co. 39,000 3,512,437
-------------
10,322,749
- ------------------------------------------------------------------------------------------------------------------------------
PAPER - 2.1%
- ------------------------------------------------------------------------------------------------------------------------------
Westvaco Corp. 64,500 2,027,719
- ------------------------------------------------------------------------------------------------------------------------------
Weyerhaeuser Co. 54,600 2,839,200
-------------
4,866,919
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 11.0%
- ------------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING - 5.2%
- ------------------------------------------------------------------------------------------------------------------------------
Ford Motor Co. 73,100 2,759,525
- ------------------------------------------------------------------------------------------------------------------------------
Genuine Parts Co. 82,500 2,794,687
- ------------------------------------------------------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. 73,000 4,621,812
- ------------------------------------------------------------------------------------------------------------------------------
Stanley Works (The) 47,900 1,916,000
-------------
12,092,024
- ------------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.0%
- ------------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 31,800 2,440,650
- ------------------------------------------------------------------------------------------------------------------------------
MEDIA - 1.4%
- ------------------------------------------------------------------------------------------------------------------------------
McGraw-Hill, Inc. 57,000 3,352,312
- ------------------------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL - 3.4%
- ------------------------------------------------------------------------------------------------------------------------------
May Department Stores Cos. 61,500 2,905,875
- ------------------------------------------------------------------------------------------------------------------------------
Sears Roebuck & Co. 48,700 2,617,625
- ------------------------------------------------------------------------------------------------------------------------------
VF Corp. 27,500 2,330,625
-------------
7,854,125
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 20.8%
- ------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 1.7%
- ------------------------------------------------------------------------------------------------------------------------------
Brown-Forman Corp., Cl. B 40,900 1,996,431
- ------------------------------------------------------------------------------------------------------------------------------
PepsiCo, Inc. 54,000 2,028,375
-------------
4,024,806
- ------------------------------------------------------------------------------------------------------------------------------
FOOD - 6.8%
- ------------------------------------------------------------------------------------------------------------------------------
Albertson's, Inc. 105,100 3,836,150
- ------------------------------------------------------------------------------------------------------------------------------
American Stores Co. 66,000 3,258,750
- ------------------------------------------------------------------------------------------------------------------------------
ConAgra, Inc. 46,000 2,949,750
- ------------------------------------------------------------------------------------------------------------------------------
CPC International, Inc. 37,000 3,415,562
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Hi-Bred International, Inc. 29,500 2,360,000
-------------
15,820,212
- ------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS - 7.2%
- ------------------------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 115,000 9,315,000
- ------------------------------------------------------------------------------------------------------------------------------
Cytogen Corp.(1) 79 385
- ------------------------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 14,100 1,684,950
- ------------------------------------------------------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. 59,000 2,050,250
- ------------------------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 76,000 3,638,500
-------------
16,689,085
</TABLE>
7 Oppenheimer Value Stock Fund
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<TABLE>
<CAPTION>
=============================================================================================================================
STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 1.4%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Becton, Dickinson & Co. 62,000 $ 3,138,750
- ------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 1.1%
- ------------------------------------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 51,000 2,537,250
- ------------------------------------------------------------------------------------------------------------------------------
TOBACCO - 2.6%
- ------------------------------------------------------------------------------------------------------------------------------
Fortune Brands, Inc. 59,000 2,201,438
- ------------------------------------------------------------------------------------------------------------------------------
Gallaher Group plc, ADR(1) 59,000 1,087,813
- ------------------------------------------------------------------------------------------------------------------------------
UST, Inc. 101,000 2,802,750
-------------
6,092,001
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 6.4%
- ------------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED - 6.4%
- ------------------------------------------------------------------------------------------------------------------------------
Amoco Corp. 49,500 4,303,406
- ------------------------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 28,500 1,806,188
- ------------------------------------------------------------------------------------------------------------------------------
Mobil Corp. 47,000 3,284,125
- ------------------------------------------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 80,500 2,017,531
- ------------------------------------------------------------------------------------------------------------------------------
Union Pacific Resources Group, Inc. 68,600 1,706,425
- ------------------------------------------------------------------------------------------------------------------------------
Unocal Corp. 44,100 1,711,631
-------------
14,829,306
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL - 14.2%
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 5.8%
- ------------------------------------------------------------------------------------------------------------------------------
Bank of New York Co., Inc. (The) 95,000 4,132,500
- ------------------------------------------------------------------------------------------------------------------------------
Comerica, Inc. 33,500 2,278,000
- ------------------------------------------------------------------------------------------------------------------------------
CoreStates Financial Corp. 52,000 2,795,000
- ------------------------------------------------------------------------------------------------------------------------------
Norwest Corp. 36,500 2,053,125
- ------------------------------------------------------------------------------------------------------------------------------
Wachovia Corp. 36,240 2,113,245
-------------
13,371,870
- ------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.6%
- ------------------------------------------------------------------------------------------------------------------------------
American Express Co. 50,000 3,725,000
- ------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 6.8%
- ------------------------------------------------------------------------------------------------------------------------------
Jefferson-Pilot Corp. 32,825 2,293,647
- ------------------------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc. 70,000 4,996,250
- ------------------------------------------------------------------------------------------------------------------------------
MBIA, Inc. 33,500 3,779,219
- ------------------------------------------------------------------------------------------------------------------------------
Safeco Corp. 99,500 4,645,406
-------------
15,714,522
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL - 16.7%
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 8.0%
- ------------------------------------------------------------------------------------------------------------------------------
AMP, Inc. 100,300 4,187,525
- ------------------------------------------------------------------------------------------------------------------------------
General Electric Co. 103,000 6,733,625
- ------------------------------------------------------------------------------------------------------------------------------
General Signal Corp. 5,500 239,938
- ------------------------------------------------------------------------------------------------------------------------------
Grainger (W.W.), Inc. 32,000 2,502,000
- ------------------------------------------------------------------------------------------------------------------------------
Honeywell, Inc. 28,000 2,124,500
- ------------------------------------------------------------------------------------------------------------------------------
Hubbell, Inc., Cl. B 61,994 2,727,736
------------------
18,515,324
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.9%
- ------------------------------------------------------------------------------------------------------------------------------
Temple-Inland, Inc. 40,000 2,160,000
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES - 0.8%
- ------------------------------------------------------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co. 48,000 1,758,000
</TABLE>
8 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================================================
STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 4.3%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dover Corp. 41,500 $ 2,552,250
- ------------------------------------------------------------------------------------------------------------------------------
Harsco Corp. 46,000 1,863,000
- ------------------------------------------------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 21,300 2,172,600
- ------------------------------------------------------------------------------------------------------------------------------
Pall Corp. 62,600 1,455,450
- ------------------------------------------------------------------------------------------------------------------------------
Parker-Hannifin Corp. 30,400 1,844,900
-------------
9,888,200
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.7%
- ------------------------------------------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 34,600 3,109,675
- ------------------------------------------------------------------------------------------------------------------------------
Norfolk Southern Corp. 31,000 3,123,250
-------------
6,232,925
- ------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 10.5%
- ------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 2.9%
- ------------------------------------------------------------------------------------------------------------------------------
Boeing Co. 33,000 1,751,063
- ------------------------------------------------------------------------------------------------------------------------------
Raytheon Co. 60,000 3,060,000
- ------------------------------------------------------------------------------------------------------------------------------
TRW, Inc. 32,000 1,818,000
-------------
6,629,063
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 7.3%
- ------------------------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 80,000 4,480,000
- ------------------------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 45,000 4,058,438
- ------------------------------------------------------------------------------------------------------------------------------
Pitney Bowes, Inc. 54,500 3,787,750
- ------------------------------------------------------------------------------------------------------------------------------
Xerox Corp. 57,000 4,495,875
-------------
16,822,063
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY - 0.3%
- ------------------------------------------------------------------------------------------------------------------------------
AT&T Corp. 16,900 592,556
- ------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.5%
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 2.0%
- ------------------------------------------------------------------------------------------------------------------------------
NIPSCO Industries, Inc. 25,500 1,053,469
- ------------------------------------------------------------------------------------------------------------------------------
SCANA Corp. 81,800 2,029,663
- ------------------------------------------------------------------------------------------------------------------------------
Teco Energy, Inc. 61,500 1,572,094
-------------
4,655,226
- ------------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES - 3.5%
- ------------------------------------------------------------------------------------------------------------------------------
Ameritech Corp. 28,000 1,902,250
- ------------------------------------------------------------------------------------------------------------------------------
Frontier Corp. 107,300 2,139,294
- ------------------------------------------------------------------------------------------------------------------------------
GTE Corp. 57,600 2,527,200
- ------------------------------------------------------------------------------------------------------------------------------
Southern New England Telecommunications Corp. 40,100 1,558,887
-------------
8,127,631
-------------
Total Common Stocks (Cost $123,000,389) 212,252,569
FACE
AMOUNT
==============================================================================================================================
REPURCHASE AGREEMENTS - 7.9%
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Zion First National Bank, 5.95%, dated 6/30/97, to be
repurchased at $18,303,025 on 7/1/97, collateralized by U.S. Treasury Bonds,
12.50%, 8/15/14, with a value of $4,632,950 and U.S. Treasury Nts.,
5.125%-7.25%, 5/31/98-8/15/04, with a value of
$14,052,869 (Cost $18,300,000) $18,300,000 18,300,000
</TABLE>
9 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
================================================================================
STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED)
MARKET VALUE
SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS, AT VALUE (COST $141,300,389) 99.5% $230,552,569
- ------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 1,217,162
------ -------------
NET ASSETS 100.0% $231,769,731
====== =============
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
10 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED)
================================================================================================================
ASSETS
<S> <C>
Investments, at value (cost $141,300,389) - see accompanying statement $230,552,569
- ----------------------------------------------------------------------------------------------------------------
Cash 227,817
- ----------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 733,510
Shares of beneficial interest sold 422,791
Interest and dividends 362,329
- ----------------------------------------------------------------------------------------------------------------
Other 4,996
-------------
Total assets 232,304,012
================================================================================================================
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 277,624
Distribution and service plan fees 131,830
Shareholder reports 69,983
Transfer and shareholder servicing agent fees 35,488
Custodian fees 7,393
Other 11,963
-------------
Total liabilities 534,281
================================================================================================================
NET ASSETS $231,769,731
=============
================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $134,584,200
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 156,731
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 7,776,620
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Note 3 89,252,180
-------------
Net assets $231,769,731
=============
================================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$176,434,934 and 7,536,401 shares of beneficial interest outstanding) $23.41
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $24.84
- ----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $52,104,431 and 2,242,542 shares of beneficial interest outstanding) $23.23
- ----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $3,230,366 and 138,684 shares of beneficial interest outstanding) $23.29
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
================================================================================
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
================================================================================================================
INVESTMENT INCOME
<S> <C>
Interest $ 2,307,864
- ----------------------------------------------------------------------------------------------------------------
Dividends 363,163
------------
Total income 2,671,027
================================================================================================================
EXPENSES
Management fees - Note 4 757,435
- ----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 195,213
Class B 224,450
Class C 12,450
- ----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 160,468
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 51,829
- ----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 11,659
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 8,392
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 3,711
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,623
Class B 1,652
Class C 301
- ----------------------------------------------------------------------------------------------------------------
Insurance expenses 2,759
- ----------------------------------------------------------------------------------------------------------------
Other 2,492
------------
Total expenses 1,434,434
================================================================================================================
NET INVESTMENT INCOME 1,236,593
================================================================================================================
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 6,162,006
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 23,546,636
------------
Net realized and unrealized gain 29,708,642
================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $30,945,235
============
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
================================================================================================================
OPERATIONS
<S> <C> <C>
Net investment income $ 1,236,593 $ 2,823,020
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 6,162,006 7,161,305
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 23,546,636 21,456,991
----------------------------------
Net increase in net assets resulting from operations 30,945,235 31,441,316
================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (969,643) (2,534,251)
Class B (126,673) (366,547)
Class C (7,205) (13,143)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (4,334,550)
Class B -- (1,169,914)
Class C -- (53,029)
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial interest
transactions - Note 2:
Class A 5,355,618 (6,902,321)
Class B 5,450,218 9,380,312
Class C 995,047 1,632,938
================================================================================================================
NET ASSETS
Total increase 41,642,597 27,080,811
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 190,127,134 163,046,323
----------------------------------
End of period (including undistributed net investment
income of $156,731 and $23,659, respectively) $231,769,731 $190,127,134
==================================
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS B
------------------------------------------------------------------------- ----------
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30,
1997 1997
(UNAUDITED) 1996 1995 1994 1993 1992 (UNAUDITED)
====================================================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $20.33 $17.84 $14.16 $14.41 $14.19 $13.57 $20.19
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .15 .34 .32 .31 .29 .32 .07
Net realized and unrealized gain 3.06 3.11 3.90 .16 .98 .97 3.03
- ------------------------------------------------------------------------------------------------------------------------------------
Total income from investment
operations 3.21 3.45 4.22 .47 1.27 1.29 3.10
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.13) (.35) (.30) (.31) (.29) (.32) (.06)
Dividends in excess of net investment
income -- -- -- (.01) -- -- --
Distributions from net realized gain -- (.61) (.24) (.40) (.76) (.35) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.13) (.96) (.54) (.72) (1.05) (.67) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.41 $20.33 $17.84 $14.16 $14.41 $14.19 $23.23
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 15.82% 19.39% 30.04% 3.28% 8.97% 9.61% 15.37%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $176,435 $148,129 $136,270 $92,728 $90,470 $59,376 $52,104
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $160,384 $144,498 $115,137 $90,158 $80,229 $53,485 $45,303
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.37%(4) 1.73% 1.98% 2.16% 1.97% 2.34% 0.61%(4)
Expenses 1.21%(4) 1.20% 1.28% 1.27% 1.24% 1.19% 1.98%(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 7.5% 14.5% 11.8% 16.3% 24.3% 12.3% 7.5%
Average brokerage commission rate(6) $0.0593 $0.0573 $0.0597 -- -- -- $0.0593
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to
December 31, 1995.
2. For the period from May 1, 1993 (inception of offering) to
December 31, 1993.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
14 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS B (CONTINUED) CLASS C
---------------------------------------------- -------------------------------------
SIX MONTHS
ENDED
JUNE 30,
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31,
1996 1995 1994 1993(2) (UNAUDITED) 1996 1995(1)
====================================================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.73 $14.09 $14.35 $14.60 $20.24 $17.81 $17.12
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .19 .21 .17 .17 .08 .22 .02
Net realized and unrealized gain 3.09 3.86 .19 .51 3.03 3.05 .97
- ------------------------------------------------------------------------------------------------------------------------------------
Total income from investment
operations 3.28 4.07 .36 .68 3.11 3.27 .99
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.21) (.19) (.21) (.17) (.06) (.23) (.06)
Dividends in excess of net investment
income -- -- (.01) -- -- -- --
Distributions from net realized gain (.61) (.24) (.40) (.76) -- (.61) (.24)
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.82) (.43) (.62) (.93) (.06) (.84) (.30)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.19 $17.73 $14.09 $14.35 $23.29 $20.24 $17.81
=======================================================================================
====================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 18.50% 29.03% 2.50% 4.63% 15.38% 18.39% 5.89%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $40,142 $26,647 $10,893 $5,158 $3,230 $1,856 $130
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $33,258 $18,857 $ 7,834 $2,527 $2,518 $ 904 $ 57
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.96% 1.19% 1.45% 0.97%(4) 0.60%(4) 0.92% 0.56%(4)
Expenses 1.97% 2.07% 2.01% 2.14%(4) 1.99%(4) 2.02% 2.37%(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 14.5% 11.8% 16.3% 24.3% 7.5% 14.5% 11.8%
Average brokerage commission rate(6) $0.0573 $0.0597 -- -- $0.0593 $0.0573 $0.0597
</TABLE>
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $17,693,482 and $14,565,040, respectively.
6. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
15 Oppenheimer Value Stock Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Value Stock Fund (the Fund) is a separate fund of Oppenheimer
Integrity Funds, a diversified, open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek long-term growth of capital and income primarily
through investments in stocks of well established companies. The Fund's
investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund offers
Class A, Class B and Class C shares. Class A shares are sold with a front-end
sales charge. Class B and Class C shares may be subject to a contingent deferred
sales charge. All classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or
service plan, expenses directly attributable to that class and exclusive voting
rights with respect to matters affecting that class. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
16 Oppenheimer Value Stock Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, 1996
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
Class A:
<S> <C> <C> <C> <C>
Sold 686,537 $ 14,785,708 1,459,943 $ 28,270,600
Dividends and distributions
reinvested 31,660 707,729 250,205 5,056,348
Redeemed (468,748) (10,137,819) (2,062,372) (40,229,269)
--------- ------------- ----------- -------------
Net increase (decrease) 249,449 $ 5,355,618 (352,224) $ (6,902,321)
========= ============= =========== =============
Class B:
Sold 451,643 $ 9,679,194 730,295 $ 13,930,290
Dividends and distributions
reinvested 5,367 118,425 71,393 1,445,827
Redeemed (202,911) (4,347,401) (315,951) (5,995,805)
--------- -------------- ----------- -------------
Net increase 254,099 $ 5,450,218 485,737 $ 9,380,312
========= ============== =========== =============
Class C:
Sold 56,890 $ 1,208,367 93,935 $ 1,815,265
Dividends and distributions
reinvested 317 7,027 3,157 64,356
Redeemed (10,208) (220,347) (12,697) (246,683)
--------- -------------- ----------- -------------
Net increase 46,999 $ 995,047 84,395 $ 1,632,938
========= ============== =========== =============
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At June 30, 1997, net unrealized appreciation on investments of $89,252,180 was
composed of gross appreciation of $90,241,607, and gross depreciation of
$989,427.
4. MANAGEMENT FEES AND OTHER TRANSACTION WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% of the first
$100 million of the average annual net assets, 0.72% of the next $200 million,
0.69% of the next $200 million of net assets, and 0.66% of average annual net
assets in excess of $500 million.
For the six months ended June 30, 1997, commissions (sales charges paid by
investors) on sales of Class A shares totaled $204,963, of which $91,300 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $270,637 and $10,217, of which $40,798 and $2,703,
respectively, was paid to an affiliated broker/dealer. During the six months
ended June 30, 1997, OFDI received contingent deferred sales charges of $31,595
upon redemption of Class B shares as reimbursement for sales commissions
advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund and for other registered investment
companies. OFS's total costs of providing such services are allocated ratably to
these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended June 30, 1997, OFDI paid $110,205 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
17 Oppenheimer Value Stock Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
4. MANAGEMENT FEES AND OTHER TRANSACTION WITH AFFILIATES (Continued)
The Fund has adopted a Distribution and Service Plan for Class B shares to
reimburse OFDI for its services and costs in distributing Class B shares and
servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based
sales charge of 0.75% per year on Class B shares. OFDI also receives a service
fee of 0.25% per year to reimburse dealers for providing personal services for
accounts that hold Class B shares. Both fees are computed on the average annual
net assets of Class B shares, determined as of the close of each regular
business day. During the six months ended June 30, 1997, OFDI paid $8,652 to an
affiliated broker/dealer as reimbursement for Class B personal service and
maintenance expenses and retained $182,772 as reimbursement for Class B sales
commissions and service fee advances, as well as financing costs. If either Plan
is terminated by the Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for distributing shares before
the Plan was terminated. As of June 30, 1997, OFDI had incurred unreimbursed
expenses of $1,034,129 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for Class
C shares to compensate OFDI for its services and costs in distributing Class C
shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class C shares. Both fees are computed on the
average annual net assets of Class C shares, determined as of the close of each
regular business day. During the six months ended June 30, 1997, OFDI paid
retained $9,187 as compensation for Class C sales commissions and service fee
advances, as well as financing costs. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for certain expenses it incurred before the Plan was
terminated. As of June 30, 1997, OFDI had incurred unreimbursed expenses of
$47,970 for Class C.
5. SUBSEQUENT EVENT
At a shareholder meeting on July 21, 1997, shareholders of Oppenheimer Value
Stock Fund approved a reorganization of Oppenheimer Value Stock Fund with and
into Oppenheimer Disciplined Value Fund. Shareholders of Oppenheimer Value Stock
Fund received shares of Oppenheimer Disciplined Value Fund and Oppenheimer Value
Stock Fund was liquidated. The reorganization occurred on July 25, 1997.
18 Oppenheimer Value Stock Fund
<PAGE>
(Intentionally Left Blank)
<PAGE>
OPPENHEIMER VALUE STOCK FUND
A SERIES OF OPPENHEIMER INTEGRITY FUNDS
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
James W. MacAllen, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISER OppenheimerFunds, Inc.
SUB-ADVISER David L. Babson & Company
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF PORTFOLIO The Bank of New York
SECURITIES
INDEPENDENT AUDITORS Deloitte & Touche LLP
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken from the records of
the Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Value Stock Fund.
This report must be preceded or accompanied by a Prospectus of Oppenheimer
Value Stock Fund. For material information concerning the Fund, see the
Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are
not guaranteed by any bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including possible loss of the
principal amount invested.
---------------------
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