SCOUT
STOCK FUND
A no-load mutual fund
with primary emphasis
on long-term growth of
both capital and income.
Quarterly Report
September 30, 1996
TO THE SHAREHOLDERS
For the calendar quarter ended September 30, 1996, Scout Stock Fund earned a
total return (price change and reinvested distributions) of -0.06% in
comparison with the unmanaged Standard & Poor's 500 Index and the Lipper
Growth Fund Index which earned 3.09% and 2.82%, respectively for the same
period.
Performance data contained in this report is for past periods only. Past
performance is not predictive of future per-formance. Investment return and
share value will fluctuate, and redemption value may be more or less than
original cost. The stock markets suffered a strong correction starting in
early July, but had started to recover by the end of the month. In August, the
market traded in a narrow range before moving up sharply in September to new
highs. The correction and subsequent recovery were not participated in equally
by all segments of the market. The large capitalization stocks that have led
the market in general were hit less severely than medium and small
capitalization stocks and recovered faster.
The correction in the market was caused by continued fears of higher interest
rates as economic growth accelerated in the quarter ending on June 30.
Earnings growth has also been a concern as it has slowed in comparison with
1995 in this the longest bull market in this century. Price earnings ratios
are beginning to rise as earnings slow while dividend yield and price to book
are at an all time high.
Top 10 Equity Holdings
Market Percent
Value of Total
International Business Machines $ 1,867,500 1.07%
Archer Daniels Midland 1,859,550 1.07%
Nalco Chemical Co. 1,812,500 1.04%
Bristol Myers Squibb Co. 1,734,750 1.00%
Snap On Inc. 1,734,750 1.00%
Brinker International Inc. 1,700,000 0.98%
H J Heinz Co. 1,687,500 0.97%
Pacific Telesis Group 1,681,250 0.96%
Dun & Bradstreet Companies Inc. 1,669,500 0.96%
Union Electric Co. 1,665,000 0.96%
Top 10 Equity Holdings Total: $ 17,412,300 10.01%
Note: All market values based on 9/30/96 statement of assets.
Fundamental valuations in the equity markets in general are at record levels.
Large capitalization stocks are particularly overvalued as they were still
favored by the market place in the rebound after the correction in comparison
with the value oriented, higher dividend, lower P/E type stocks that comprise
much of the Scout Stock Fund.
During the quarter, the economic sector diversification of Scout Stock Fund
was changed by reducing the weighting of cyclical stocks in the portfolio and
increasing the percentage in consumer staples. The Fund is still well
diversified with its top ten holdings representing only 10.01% of its total
assets.
PIE CHART
We believe that the defensive posture maintained by the Fund will pay off as
the economy slows in the second half of 1996 and more pressure is put on the
overvalued segments of the market. The Fund's significant cash reserves will
be used to take advantage of any major correction in the market.
We appreciate your continued interest in Scout Stock Fund as part of your
overall financial plan.
Sincerely,
/s/David B Anderson
David B. Anderson
UMB Investment Advisors
Shares of the Scout Funds are not deposits or obligations of, nor guaranteed
by, UMB Bank, n.a. or any other banking institution, nor are they insured by
the Federal Deposit Insurance Corporation or any other applicable deposit
insurance. These shares involve investment risks, including the possible loss
of the principal amount invested.
FINANCIAL STATEMENTS
Statement of Net Assets
September 30, 1996
COMMON STOCKS - 71.56%
BASIC MATERIALS - 9.24%
70,000 Brush Wellman, Inc. $ 1,347,500
110,000 Calgon Carbon Corp. 1,141,250
5,000 Carpenter Technology Corp. 175,000
20,000 Corning Inc. 780,000
60,000 Cyprus Amax Minerals Co. 1,290,000
15,000 Eastman Chemical Co. 875,625
65,000 Engelhard Corp. 1,495,000
10,000 Georgia Pacific Corp. 791,250
25,000 International Paper Co. 1,062,500
50,000 Nalco Chemical Co. 1,812,500
20,000 Rohm & Haas Co. 1,310,000
25,000 Union Camp Corp. 1,221,875
35,000 Weyerhaeuser Co. 1,614,375
60,000 Worthington Industries, Inc. 1,200,000
16,116,875
CAPITAL GOODS - 4.04%
50,000 Browning Ferris Industries 1,250,000
33,000 Cooper Industries, Inc. 1,427,250
12,000 Deere & Co. 504,000
4,000 Fluor Corp. 246,000
60,000 Giddings & Lewis 712,500
15,000 Grainger (W.W.), Inc. 1,053,750
25,000 Hillenbrand Industry, Inc. 912,500
30,000 Trinova Corp. 945,000
7,051,000
CONSUMER CYCLICAL - 13.23%
50,000 American Greetings Corp. 1,431,250
60,000 Bassett Furniture Industries 1,425,000
35,000 Block (H&R), Inc. 1,041,250
40,000 Brown Group, Inc. 930,000
40,000 Dillards Dept. Stores, Inc., Cl A 1,290,000
40,000 Donnelley (R.R.) & Sons Co. 1,290,000
28,000 Dun & Bradstreet 1,669,500
20,000 Gannett Co., Inc. 1,407,500
25,000 General Motors Corp. 1,200,000
25,000 Genuine Parts Co. 1,093,750
10,000 Kimberly-Clark Corp. 881,250
27,195 Limited (The) Inc. 520,104
35,000 Mallinckrodt Group, Inc. 1,456,875
40,000 Masco Corp. 1,200,000
20,000 May Department Stores Co. 972,500
10,000 Mercantile Stores Co., Inc. 540,000
12,000 Penney (J.C.) & Co., Inc. 649,500
10,000 Readers Digest Assc. `A' 408,750
8,000 Service Corp. International 242,000
54,000 Snap-On, Inc. 1,734,750
130,000 Stride Rite Corp. 1,170,000
15,000 TJX Companies, Inc. 538,125
23,092,104
CONSUMBER STAPLES - 12.27%
23,700 Abbott Laboratories 1,167,225
60,000 ALZA Corp. 1,612,500
12,000 American Home Products Co. 765,000
96,600 Archer-Daniels-Midland Co. 1,859,550
35,000 Bard (C.R.), Inc. 1,089,275
115,000 Bob Evans Farms, Inc. 1,538,125
100,000 Brinker International 1,700,000
18,000 Bristol-Myers Squibb Co. 1,734,750
85,000 Community Psychiatric Centers 796,875
50,000 Darden Restaurants 431,250
4,000 Eastman Kodak Company 314,000
50,000 Heinz (H.J.) Co. 1,687,500
38,000 International Flavors
& Fragrances, Inc. 1,657,750
90,000 Lance, Inc. 1,552,500
20,000 Merck & Co., Inc. 1,407,500
50,000 Rubbermaid, Inc. 1,225,000
30,000 Toys "R" Us, Inc. 873,750
21,412,550
ENERGY - 8.80%
12,000 Amoco Corp. 846,000
12,000 Atlantic Richfield Co. 1,530,000
40,000 Baker Hughes, Inc. 1,215,000
50,000 Dresser Industries, Inc. 1,487,500
15,000 Halliburton Co. 774,375
25,000 Kerr-Mcgee Corp. 1,521,875
12,000 Louisiana Land & Exploration Co. 631,500
27,000 Mapco, Inc. 1,609,875
75,000 Mitchell Energy & Development 1,415,625
25,000 Phillips Petroleum Co. 1,068,750
10,000 Schlumberger, Limited 845,000
1,500 Texaco, Inc. 138,000
75,000 USX-Marathon Group 1,621,875
20,000 WMX Technologies Inc. 657,500
15,362,875
FINANCIAL - 1.40%
10,000 Aon Corp. 542,500
20,000 First Chicago Nbd Corp. 905,000
28,500 Liberty Corp. S.C. 1,001,063
2,448,563
TECHNOLOGY - 7.01%
50,000 ADT, Ltd. 956,250
6,300 AMP, Inc. 244,125
50,000 Apple Computer, Inc. 1,109,375
25,000 Digital Equipment Corp. 893,750
15,000 IBM, Corp. 1,867,500
25,000 Motorola, Inc. 1,290,625
40,000 Mylan Laboratories 685,000
60,000 Novell, Inc. 660,000
20,000 Perkin-Elmer Corp. 1,157,500
60,000 Sensormatic Electronics 1,072,500
110,000 Tandem Computers, Inc. 1,182,500
20,000 Telxon Corp. 280,000
15,000 Texas Instruments, Inc. 826,875
12,226,000
TRANSPORATATION & SERVICES - 2.98%
8,000 CSX Corp. 404,000
30,000 Caliber Systems, Inc. 483,750
50,000 Consolidated Freightways 1,225,000
8,000 Norfolk Southern Corp. 731,000
8,000 Roadway Express Inc. 119,000
35,000 Southwest Airlines Co. 800,625
15,000 Union Pacific Corp. 1,098,750
20,000 US West Media Group 337,500
5,199,625
UTILITIES - 12.59%
28,000 AT&T 1,463,000
20,000 Bell Atlantic Corporation 1,197,500
20,000 Bell South Corporation 740,000
50,000 Central & South West Corp. 1,300,000
70,000 Comsat Corp. 1,583,750
30,000 Dominion Resources Inc. VA 1,132,500
60,000 Entergy Corp. 1,620,000
40,000 Florida Progress Corp. 1,360,000
8,500 FPL Group Inc. 367,625
75,000 Niagara Mohawk Power Corp. 600,000
50,000 Pacific Telesis Group 1,681,250
20,000 Panhandle Eastern Corp. 692,500
15,000 SBC Communications 721,875
50,000 SCANA Corp. 1,312,500
3,500 Sprint Corp. 136,062
40,000 Texas Utilities Co. 1,585,000
40,000 U.S. West, Inc. 1,190,000
65,000 Unicom Corporation 1,633,125
45,000 Union Electric Co. 1,659,375
21,976,062
TOTAL COMMON STOCKS - 71.56% 124,885,654
CONVERTIBLE REFERRED STOCK - 0.44%
25,000 Unisys Corp.
($3.75 Ser A Cm. Cv. A Pfd.) 765,625
Face Market
Amount Description Value
CONVERTIBLE CORPORATE BONDS - 1.60%
$ 300,000 Computervision Corp.,
8.0% Conv. Sub. Deb.,
due December 1, 2009 241,875
1,000,000 Masco Corp.,
5.25%, due February 15, 2012 950,000
500,000 Telxon Corp.
7.50% Conv. Sub. Deb.,
due June 1, 2012 482,500
1,200,000 Wmx Technologies,
Conv. Sub. Note,
2.0%, due January 24, 2005 1,113,000
TOTAL CONVERTIBLE
CORPORATE BONDS - 1.60% 2,787,375
SHORT-TERM CORPORATE NOTES - 18.55%
1,000,000 AIG Funding Corp.,
5.30%, due October 10, 1996 998,528
1,000,000 Air Products & Chemicals, Inc.,
5.35%, due October 9, 1996 998,663
1,500,000 Aluminum Co. of America,
5.35%, due November 1, 1996 1,492,867
1,000,000 Ameritech Cap Funding Corp.,
5.29%, due October 16, 1996 997,649
1,500,000 Amoco Co.,
5.25%, due November 22, 1996 1,448,406
500,000 Anheuser-Busch Cos., Inc.,
5.25%, due October 15, 1996 498,906
1,500,000 Anheuser-Busch Cos., Inc.,
5.26%, due November 5, 1996 1,492,110
1,000,000 BellSouth Telecommunications,
5.30%, due October 4, 1996 999,411
1,500,000 Campbell Soup Co.,
5.31%, due October 9, 1996 1,498,009
1,500,000 Chevron Oil Finance Co.,
5.32%, due October 22, 1996 1,495,123
1,500,000 Coca-Cola Co.,
5.28%, due October 8, 1996 1,498,240
1,500,000 duPont (E. I.) deNemours & Co.,
5.25%, due October 7, 1996 1,498,469
1,500,000 Englehard Corp.
5.37%, due October 28, 1996 1,493,735
1,500,000 Gillette, Co.,
5.26%, due October 3, 1996 1,499,343
1,500,000 Heinz (H. J.) Co.,
5.26%, due October 10, 1996 1,497,808
1,500,000 International Business Machines,
5.34%, due October 23, 1996 1,494,882
1,500,000 Kellogg Co.,
5.28%, due November 8, 1996 1,491,420
1,000,000 Monsanto Co.,
5.42%, due October 25, 1996 996,236
1,500,000 Motorola Inc.,
5.31%, due October 21, 1996 1,495,354
1,000,000 Nalco Chemical Co.,
5.36%, due October 23, 1996 996,576
1,500,000 Phillip Morris Cos., Inc.,
5.24%, due October 9, 1996 1,498,035
1,500,000 Southwestern Bell Telephone,
5.26%, due October 25, 1996 1,494,521
1,500,000 Wal-Mart Stores, Inc.,
5.25%, due October 29, 1996 1,493,656
SHORT-TERM CORPORATE NOTES (Continued)
1,000,000 Disney Walt Co.,
5.25%, due October 4, 1996 999,417
1,000,000 Xerox Corp.,
5.32%, due October 18, 1996 997,340
TOTAL SHORT-TERM
CORPORATE NOTES - 18.55% 32,364,704
GOVERNMENT SPONSORED ENTERPRISES - 7.40%
1,500,000 Federal Farm Credit Banks
Discount Notes, 5.34%,
due November 6, 1996 1,491,767
2,000,000 Federal Home Loan Bank
Discount Notes, 5.26%,
due October 3, 1996 1,999,123
1,500,000 Federal Home Loan Bank
Discount Notes, 5.34%
due October 15, 1996 1,496,662
1,000,000 Federal Home Loan Banks
Discount Notes, 5.26%,
due October 30, 1996 995,617
2,000,000 Federal Home Loan Banks
Discount Notes, 5.26%,
due November 27, 1996 1,983,051
2,000,000 Federal National Mortgage Assn.
Discount Notes, 5.42%,
due November 11, 1996 1,987,052
1,000,000 Federal National Mortgage Assn.
Discount Notes, 5.34%,
due December 12, 1996 989,172
1,500,000 Federal National Mortgage Assn.
Discount Notes, 5.18%,
due December 16, 1996 1,483,381
500,000 Federal National Mortgage Assn.
Discount Notes, 5.41%,
due January 17, 1997 491,810
TOTAL GOVERNMENT SPONSORED
ENTERPRISES - 7.40% 12,917,635
REPURCHASE AGREEMENT - 0.30%
525,000 Northern Trust Co.,
5.58%, due October 1, 1996
(Collateralized by U.S.
Treasury Notes, 6.125%,
due August 31, 1998) 525,000
TOTAL INVESTMENTS - 99.85% $ 174,245,993
Other assets less liabilities - 0.15% 255,511
TOTAL NET ASSETS - 100.00%
(equivalent to $16.68 per share;
20,000,000 shares of $1.00 par
value capital shares authorized;
10,464,169.069 shares outstanding) $ 174,501,504
BASIS OF DETERMINING MARKET VALUE. Each investment is valued at the
latest sales price on September 30, 1996, as reported by the principal
exchange on which the issue is listed. If no sale is reported, or if
unlisted, the average of the latest
bid and asked price is used.
This report has been prepared for the information of the Shareholders of
Scout Stock Fund, Inc., and is not to be construed
as an offering of the shares of the Fund. Shares of this Fund and of the
other Scout Funds are offered only by the Prospectus,
a copy of which may be obtained from Jones & Babson, Inc.
BOARD OF DIRECTORS
AND OFFICERS
Board of Directors
Larry D. Armel
William E. Hoffman, D.D.S.
Eric T. Jager
Stephen F. Rose
Stuart Wien
Officers
Larry D. Armel, President
P. Bradley Adams, Vice President & Treasurer
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
John G. Dyer, Vice President
Manager and Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young,
Philadelphia, Pennsylvania
John G. Dyer, Kansas City, Missouri
Custodian
UMB Bank, n.a., Kansas City, Missouri
JONES & BABSON
MUTUAL FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE 1-800-996-2862
