SCOUT
STOCK FUND
A no-load mutual fund
with primary emphasis
on long-term growth of
both capital and income.
Annual Report
June 30, 1997
TO THE SHAREHOLDERS
For the fiscal year ended June 30, 1997, Scout Stock Fund earned a total
return (price change and reinvested distributions) of 16.25%, in comparison
with the unmanaged Standard & Poor's 500 index which earned 34.70% and the
Lipper Growth Funds index which earned 25.57% for the same period.
During the last quarter of Scout Stock Fund's fiscal year, large
capitalization stocks shook off a slow start and continued to boost the major
market indices to new highs. On April 1, the S & P 500 index was barely 2%
above its December 31, 1996, level. Continued concern about fast economic
growth and fears about inflation caused a market sell-off in mid-April. The
drop of 9.64% from the mid-February high approached a "correction," which is
defined as a decline of 10% or more. However, that move was only a stumble in
the 2 1/2-year-old bull market as it rebounded from the April lows to new
highs in June.
The rise in the market was fueled by economic strength, low inflation, higher
than expected profit growth and the continuing flood of dollars into
retirement funds and other investment portfolios. As has been the case for
most of this bull market, the large capitalization stocks that dominate the
indices outperformed the broad market. Merger and acquisition activity has
been very prevalent and has driven market prices up as well. Small and medium
capitalization stocks also began to participate in the market in a more
positive way in May and June after suffering comparatively more during April's
decline.
Scout Stock Fund benefited from the surge in strength of these stocks in
general. In addition, it profited because three of its significant holdings -
Tandem, Transitional Hospitals Corp., and Giddings and Lewis - rocketed up
because of takeover activity involving those companies.
The rise in the market indices in the second quarter was accompanied by an
increase in the already high valuations, which exist especially among large
capitalization stocks. The average S & P 500 price/ earnings ratio is at a 30-
year high of 21 times the trailing 12-month earnings. Its average dividend
yield of 1.7% and price-to-book ratio of 4.5 are also at record levels.
These sectors indicate that the market is vulnerable to a major correction.
With its value management style, high diversification, equal weighting and
significant cash reserve, Scout Stock Fund is positioned to mitigate the
effects of any downturn and take advantage of market opportunities as they
arise.
For the six months ended June 30, shareholders received an ordinary income
dividend of $.20 per share and a long-term capital gain of $.30 per share.
For corporate shareholders, 66.56% of ordinary income distributions qualify
for the corporate dividends received deduction.
We appreciate you as a valued shareholder of Scout Stock Fund and continually
welcome your questions or comments.
Sincerely,
/S/David B. Anderson
David B. Anderson
UMB Investment Advisors
Top 10 Equity Holdings
Market Percent
Value of Total
SBC Communications $ 2,738,464 1.42%
Bristol Myers Squibb Co. 2,430,000 1.26%
Archer Daniels Midland Co. 2,350,000 1.22%
Motorola, Inc. 2,280,000 1.18%
International Business Machines 2,254,688 1.17%
USX-Marathon Group 2,165,625 1.12%
Heinz H. J. Co. 2,075,625 1.08%
Merck & Co., Inc. 2,070,000 1.08%
Bassett Furniture Industries, Inc. 2,020,805 1.05%
Bob Evans Farms, Inc. 1,947,813 1.01%
Top 10 Equity Holdings Total: $22,333,020 11.59%
NOTE: All market values based on 6/30/97 statement of assets.
GRAPH - PIE - Sector Diversification (Percent of Equity Holdings)
Consumer Cyclical 20%
Transportation & Servies 4%
Technology 7%
Energy 10%
Capital Goods 7%
Basic Materials 15%
Utilities 17%
Consumer Staples 18%
Financial 2%
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 applicable deposit insurance.
These shares involve investment risks, including the possible loss of the
principal amount invested.
GRAPH - Scout Stock Fund versus Lipper Growth Funds
Scout Stock Fund's average annual componded returns for one, five and ten year
periods as of June 30, 1997, were 16.25%,12.27%, and 9.90%, respectively.
Performance data contained in this report is for past periods only.
Past performance is not predictive of future performance. Investment return
and share value will fluctuate, redemption value may be more or less than
original cost.
FINANCIAL STATEMENTS
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
Market
Shares Company Cost Value
</CAPTION>
<S> <C> <C>
COMMON STOCKS - 76.43%
Basic Materials - 11.25%
85,000 Brush Wellman, Inc. $ 1,246,945 $ 1,779,687
25,000 Carpenter Technology Corp. 744,925 1,143,750
12,000 Corning Inc. 301,086 667,500
65,000 Cyprus Amax Minerals Co. 1,538,497 1,592,500
10,000 duPont (E.I.) deNemours & Co. 551,370 628,750
25,000 Eastman Chemical Co. 1,446,875 1,587,500
80,000 Engelhard Corp. 1,461,650 1,675,000
10,000 Georgia Pacific Corp. 653,000 853,750
35,000 International Paper Co. 1,040,612 1,699,688
50,000 Mallinckrodt Group, Inc. 1,674,472 1,900,000
48,000 Nalco Chemical Co. 1,229,900 1,854,000
10,000 Rohm & Haas Co. 598,000 900,625
35,000 Union Camp Corp. 1,661,760 1,750,000
35,000 Weyerhaeuser Co. 1,080,364 1,820,000
100,000 Worthington Industries, Inc. 1,824,950 1,831,250
17,054,406 21,684,000
Capital Goods - 5.68%
40,000 Aeroquip-Vickers Inc. 1,107,000 1,890,000
50,000 Browning Ferris Industries, Inc. 1,382,500 1,662,500
120,000 Calgon Carbon Corp. 1,662,548 1,665,000
33,000 Cooper Industries, Inc. 1,324,479 1,641,750
10,000 Deere & Co. 97,435 548,750
2,500 Fluor Corp. 96,062 137,969
15,000 Grainger (W.W.), Inc. 869,983 1,172,812
40,000 Snap-On, Inc. 947,866 1,575,000
20,000 Waste Management International PLC 543,500 642,500
8,031,373 10,936,281
Consumer Cyclical - 15.35%
50,000 American Greetings Corp. 1,313,125 1,856,250
34,216 Ascent Entertainment Group* 212,818 312,221
71,375 Bassett Furniture Industries, Inc. 1,892,481 2,020,805
20,000 Black & Decker Corp. 596,000 743,750
40,000 Block (H&R), Inc. 1,395,125 1,290,000
40,000 Brown Group, Inc. 1,103,518 747,500
40,000 Cognizant Corp. 1,132,463 1,620,000
40,000 Dillards, Inc. 1,034,074 1,385,000
45,000 Donnelley (R.R.) & Sons Co. 1,362,757 1,648,125
28,000 Dun & Bradstreet 532,547 735,000
15,000 Ford Motor Co. 474,825 566,250
10,000 Gannett Co., Inc. 458,363 987,500
25,000 General Motors Corp. 982,168 1,392,187
37,500 Genuine Parts Co. 773,859 1,270,313
40,000 Hillenbrand Industries, Inc. 1,240,600 1,900,000
50,000 Limited, Inc. 945,411 1,012,500
40,000 Masco Corp. 951,900 1,670,000
10,000 May Department Stores Co. 301,249 472,500
15,000 Media General Inc., Class A 441,375 600,000
25,000 Mercantile Stores Co., Inc. 1,056,830 1,573,437
25,000 Penney (J.C.) & Co., Inc. 1,119,912 1,304,687
25,000 Readers Digest Assc. `A' 1,035,096 717,188
85,000 Sensormatic Electronics Corp. 1,789,751 1,094,375
120,000 Stride Rite Corp. 1,461,940 1,545,000
20,000 Toys `R' Us, Inc.* 533,500 700,000
20,000 US West Media Group* 343,792 405,000
24,485,479 29,569,588
Consumer Staples - 13.38%
15,000 Abbott Laboratories 593,250 1,001,250
60,000 Alza Corp.* 1,161,750 1,740,000
12,000 American Home Products Corp. 149,488 918,000
100,000 Archer-Daniels-Midland Co. 1,088,050 2,350,000
45,000 Bard (C.R.), Inc. 1,281,655 1,634,062
115,000 Bob Evans Farms, Inc. 1,924,828 1,947,813
100,000 Brinker International* 1,601,875 1,425,000
30,000 Bristol-Myers Squibb Co. 795,579 2,430,000
4,500 Covance Inc.* 68,763 86,906
70,000 Darden Restaurants, Inc. 643,500 634,375
2,500 Eastman Kodak Co. 62,463 191,875
45,000 Heinz H.J. Co. 1,444,125 2,075,625
38,000 International Flavors & Fragrances, Inc. 1,826,825 1,919,000
13,000 Kimberly Clark Corp. 470,762 646,750
95,000 Lance, Inc. 1,858,125 1,816,875
20,000 Merck & Co., Inc. 863,212 2,070,000
75,000 Mylan Laboratories Inc. 1,274,800 1,106,250
60,000 Rubbermaid, Inc. 1,580,552 1,785,000
18,689,602 25,778,781
Energy - 7.98%
12,000 Amoco Corp. 427,030 1,043,250
20,000 Atlantic Richfield Co. 1,042,455 1,410,000
34,000 Baker Hughes, Inc. 613,400 1,315,375
40,000 Dresser Industries, Inc. 686,605 1,490,000
15,000 Halliburton Co. 378,676 1,188,750
25,000 Kerr-McGee Corp. 1,151,135 1,584,375
10,000 Louisiana Land & Exploration Co. 366,750 571,250
75,000 Mitchell Energy & Development 1,311,050 1,518,750
25,000 Phillips Petroleum Co. 807,500 1,093,750
8,000 Schlumberger, Ltd. 406,837 1,000,000
40,000 Union Pacific Resources Group, Inc. 867,536 995,000
75,000 USX-Marathon Group 1,474,325 2,165,625
9,533,299 15,376,125
Financial - 1.28%
10,500 AON Corp. 217,067 543,375
15,000 First Chicago NBD Corp. 428,715 907,500
25,000 Liberty Corp. S.C. 681,875 1,018,750
1,327,657 2,469,625
Technology - 5.69%
6,300 AMP, Inc. 238,037 263,025
50,000 Apple Computer, Inc.* 1,565,625 712,500
35,000 Digital Equipment Corp.* 1,411,727 1,240,312
25,000 International Business Machines Corp. 609,669 2,254,688
8,000 Lucent Technologies Inc. 349,766 576,500
30,000 Motorola, Inc. 1,629,000 2,280,000
60,000 Novell, Inc. 918,625 416,250
20,000 Perkin-Elmer Corp. 518,693 1,591,250
20,000 Telxon Corp. 203,738 360,000
15,000 Texas Instruments, Inc. 748,875 1,260,937
8,193,755 10,955,462
Transportation & Services - 3.00%
30,000 Caliber Systems, Inc. 1,090,705 1,117,500
50,000 CNF Transportation Inc. 754,011 1,612,500
20,000 Consolidated Freightways Corp. 92,218 327,500
8,000 CSX Corp. 269,200 444,000
5,000 Norfolk Southern Corp. 222,795 503,750
7,500 Roadway Express Inc. 88,968 175,313
35,000 Southwest Airlines Co. 815,500 905,625
10,000 Union Pacific Corp. 172,634 705,000
3,506,031 5,791,188
Utilities - 12.82%
28,000 AT&T Corp. $ 971,298 $ 981,750
18,000 Bell Atlantic Corp. 861,040 1,365,750
32,000 Bell South Corp. 1,155,331 1,484,000
50,000 Central & South West Corp. 1,246,856 1,062,500
70,000 Comsat Corp. 1,105,432 1,666,875
40,000 Dominion Resources, Inc. VA 1,472,517 1,465,000
15,666 Duke Energy Corp. 230,218 750,989
60,000 Entergy Corp. 1,378,210 1,642,500
50,000 Florida Progress Corp. 1,515,155 1,565,625
5,000 FPL Group Inc. 124,950 230,313
54,000 Mapco, Inc. 1,266,564 1,701,000
75,000 Niagara Mohawk Power Corp.* 182,105 642,187
44,258 SBC Communications Inc. 1,789,991 2,738,464
50,000 Scana Corp. 1,085,250 1,240,625
40,000 Texas Utilities Co. 1,490,701 1,377,500
37,000 U. S. West Communication Group 1,085,714 1,394,438
65,000 Unicom Corp. 1,765,648 1,446,250
45,000 Union Electric Co. 1,563,263 1,695,937
10,000 Wisconsin Energy Corp. 251,550 248,750
21,541,793 24,700,453
TOTAL COMMON STOCKS - 76.43% 112,363,395 147,261,503
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Description Cost Value
</CATPION>
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS - 1.38%
$ 300,000 Computervision Corp., Cv. Sub. Deb.,
8.00%, due December 1, 2009 $ 247,531 $ 202,500
1,000,000 Masco Corp., Cv. Sub. Deb.,
5.25%, due February 15, 2012 900,118 1,046,250
500,000 Telxon Corp., Cv. Sub. Deb.,
7.50%, due June 1, 2012 493,002 472,500
1,000,000 WMX Technologies, Inc., Cv. Sub. Notes,
2.00%, due January 24, 2005 952,898 935,000
TOTAL CONVERTIBLE CORPORATE BONDS - 1.38% 2,593,549 2,656,250
SHORT-TERM CORPORATE NOTES - 15.57%
1,500,000 Abbott Laboratories, 5.46%, due July 14, 1997 1,496,815 1,496,815
1,500,000 Air Products & Chemicals, 5.51%, due July 11, 1997 1,497,475 1,497,475
1,000,000 American Tel. & Telegraph, 5.47%, due July 22, 1997 996,657 996,657
1,000,000 Anheuser-Busch Cos., 5.43%, due July 8, 1997 998,793 998,793
1,500,000 Bell Atlantic Network Funding, 5.58%, due July 18, 1997 1,495,815 1,495,815
1,000,000 Campbell Soup Co., 5.48%, due July 25, 1997 996,194 996,194
1,500,000 du Pont (E.I.) de Nemours & Co., 5.47%, due July 29, 1997 1,493,390 1,493,390
1,500,000 Dun & Bradstreet Corp., 5.60%, due July 23, 1997 1,494,633 1,494,633
1,500,000 Eastman Kodak Co., 5.50%, due July 30, 1997 1,493,125 1,493,125
1,000,000 Gannett Inc., 5.50%, due July 21, 1997 996,792 996,792
1,000,000 Heinz H J Co., 5.50%, due July 16, 1997 997,556 997,556
1,600,000 Monsanto Co., 5.57%, due August 28, 1997 1,585,394 1,585,394
1,500,000 Motorola Inc., 5.46%, due July 8, 1997 1,498,180 1,498,180
1,500,000 Pacific Bell, 5.47%, due July 18, 1997 1,495,898 1,495,898
1,500,000 PepsiCo Inc., 5.50%, due August 1, 1997 1,492,667 1,492,667
1,500,000 Philip Morris Cos., 5.54%, due July 2, 1997 1,499,538 1,499,538
1,000,000 Progress Capital Co., 5.54%, due July 23, 1997 996,461 996,461
1,500,000 R. R. Donnelly & Co., 5.53%, due July 8, 1997 1,498,157 1,498,157
1,500,000 Southwestern Bell Telephone, 5.47%, due July 10, 1997 1,497,721 1,497,721
1,500,000 Toys R Us, 5.52%, due July 30, 1997 1,493,100 1,493,100
1,500,000 Wisconsin Electric Power Co., 5.50%, due July 25, 1997 1,494,271 1,494,271
1,500,000 Xerox Corp., 5.52%, due July 25, 1997 1,494,250 1,494,250
TOTAL SHORT-TERM CORPORATE NOTES - 15.57% 30,002,882 30,002,882
GOVERNMENT SPONSORED ENTERPRISES - 6.18%
1,000,000 Federal Home Loan Bank Discount Notes,
5.50%, due August 1, 1997 $ 995,111 $ 995,111
2,000,000 Federal Home Loan Bank Discount Notes,
5.44%, due October 2, 1997 1,971,591 1,971,591
1,000,000 Federal Home Loan Mortgage Corp. Discount Notes,
5.42%, due July 3, 1997 999,548 999,548
1,500,000 Federal National Mortgage Assn. Discount Notes,
5.42%, due July 2, 1997 1,499,546 1,499,546
1,500,000 Federal National Mortgage Assn. Discount Notes,
5.25%, due July 7, 1997 1,498,469 1,498,469
1,000,000 Federal National Mortgage Assn. Discount Notes,
5.51%, due August 22, 1997 991,888 991,888
2,000,000 Federal National Mortgage Assn. Discount Notes,
5.50%, due September 5, 1997 1,979,528 1,979,528
2,000,000 Federal National Mortgage Assn. Discount Notes,
5.42%, due October 16, 1997 1,967,480 1,967,480
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 6.18% 11,903,161 11,903,161
REPURCHASE AGREEMENT - 0.40%
775,000 Northern Trust Co., 5.80%, due July 1, 1997,
(Collateralized by U.S. Treasury Notes,
5.625% due January 31, 1998) 775,000 775,000
TOTAL INVESTMENTS - 99.96% $ 157,637,987 192,598,796
Other assets less liabilities - 0.04% 80,550
TOTAL NET ASSETS - 100.00%
(equivalent to $18.33 per share; 20,000,000 shares of $1.00 par value
capital shares authorized; 10,514,817 shares outstanding) $ 192,679,346
</TABLE>
For federal income tax purposes, the identified cost of investments owned
at June 30, 1997 was $157,637,987.
Net unrealized appreciation for federal income tax purposes was $34,960,809,
which is comprised of unrealized appreciation of $40,752,798 and unrealized
depreciation of $5,791,989.
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 1997
ASSETS:
Investment securities, at market value
(identified cost $157,637,987) $ 192,598,796
Dividends receivable 244,880
Interest receivable 33,308
Total assets 192,876,984
LIABILITIES:
Disbursements in excess of demand deposit cash 197,638
Total liabilities 197,638
NET ASSETS $ 192,679,346
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 154,568,583
Accumulated undistributed income:
Net investment income 303,406
Net realized gain on investment transactions 2,846,548
Net unrealized appreciation on investments 34,960,809
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 192,679,346
Capital shares, $1.00 par value
Authorized 20,000,000
Outstanding 10,514,187
NET ASSET VALUE PER SHARE $ 18.33
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Operations
Year Ended June 30, 1997
INVESTMENT INCOME:
Income:
Dividends $ 3,540,526
Interest 2,414,723
5,955,249
Expenses:
Management fees 1,510,741
Government fees 21,833
1,532,574
Net investment income 4,422,675
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from investment transactions:
Proceeds from sales of investments 26,387,010
Cost of investments sold 17,301,685
Net realized gain from investment transactions 9,085,325
Unrealized appreciation on investments:
Beginning of year 20,561,725
End of year 34,960,809
Increase in net unrealized appreciation on investments 14,399,084
Net realized and unrealized gain on investments 23,484,409
Net increase in net assets resulting from operations $ 27,907,084
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
For The Years Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 4,422,675 $ 4,403,078
Net realized gain from investment transactions 9,085,325 7,289,373
Increase in net unrealized appreciation on investments 14,399,084 5,197,756
Net increase in net assets resulting from operations 27,907,084 16,890,207
Net equalization included in the price of shares issued and redeemed (19,833) 150,405
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (4,357,197) (4,411,002)
Net realized gain from investment transactions (6,144,230) (9,660,536)
Decrease in net assets from distributions (10,501,427) (14,071,538)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 1,686,751 and 1,956,422 shares sold 28,261,940 33,531,918
Net asset value of 453,543 and 650,791 shares issued for
reinvestment of distributions 8,013,036 9,808,239
36,274,976 43,340,157
Cost of 1,866,291 and 721,927 shares redeemed (31,878,538) (12,119,138)
Net increase in net assets from capital share transactions 4,396,438 31,221,019
Net increase in net assets 21,782,262 34,190,093
NET ASSETS:
Beginning of year 170,897,084 136,706,991
End of year (including undistributed net investment income
of $303,406 and $257,761, respectively) $ 192,679,346 $ 170,897,084
*Distributions to shareholders:
Income dividends per share $ 0.42 $ 0.47
Capital gains distribution per share $ 0.60 $ 1.04
</TABLE>
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
Investments - Securities traded on a national securities exchange are valued
at the last reported sales price on the last business day of the year or, if
no sale was reported on that date, at the average of the last reported bid and
asked prices. Securities traded over-the-counter are valued at the average of
the last reported bid and asked prices. Short-term obligations are valued at
amortized cost, which approximates market value. Investment transactions are
recorded on the trade date. Interest income is recorded daily. Dividend income
and distributions to shareholders are recorded on the ex-dividend dates.
Realized gains and losses from investment transactions and unrealized
appreciation and depreciation of investments are reported on the identified
cost basis.
Federal Income Taxes - The Fund's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Equalization - The Fund uses the accounting practice known as equalization,
by which a portion of the proceeds from sales and costs of redemption of
capital shares, equivalent on a per share basis to the amount of undistributed
net investment income on the date of the transactions, is credited or charged
to undistributed income. As a result, undistributed net investment income per
share is unaffected by sales or redemptions of capital shares.
Amortization - Discounts and premiums on securities purchased are amortized
over the life of the respective securities.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount 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.
2. PURCHASES AND SALES OF SECURITIES - The aggregate amounts of security
transactions during the year ended June 30, 1997 (excluding commercial paper,
repurchase agreements and short-term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 21,719,534 $ -
Proceeds from sales 24,889,471 1,497,539
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager and investment
adviser and provides or pays the cost of all management, supervisory and
administrative services required in the normal operation of the Fund. This
includes investment management; fees of the custodian, independent public
accountants and legal counsel; remuneration of officers and directors; rent;
and shareholder services, including maintenance of the shareholder accounting
system and transfer agency. Not considered normal operating expenses and
therefore payable by the Fund are taxes, interest, fees and the other charges
of governments and their agencies for qualifying the fund's shares for sale,
special accounting and legal fees and brokerage commissions. UMB Bank's
management fees are based on average daily net assets of the Fund at the
annual rate of .85 of one percent of net assets. Certain officers and/or
directors of the Fund are also officers and/or directors of Jones & Babson,
Inc., which serves as the Fund's underwriter and distributor.
4. REPURCHASE AGREEMENTS - Securities purchased under agreements to resell
are held by the Fund's custodian and investment counsel, UMB Bank, n.a. The
custodian monitors the market values of the underlying securities which they
have purchased on behalf of the Fund to ensure that the collateral is
sufficient to protect the Fund in the event of default by the seller.
FINANCIAL HIGHLIGHTS
The following table sets forth information as to capital and income changes
for a share outstanding for each of the five years in the period ended
June 30, 1997:
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
</CATPION>
<S> <C> <C> <C> <C> <C>
Net assets, beginning of year $ 16.69 $ 16.36 $ 15.42 $ 15.74 $ 15.11
Income from investment operations:
Net investment income 0.43 0.48 0.48 0.35 0.36
Net realized and unrealized gains on securities 2.23 1.36 2.06 0.49 1.34
Total from Investment Operations 2.66 1.84 2.54 0.84 1.70
Distributions from:
Net investment income (0.42) (0.47) (0.47) (0.35) (0.35)
Net realized gain on investment transactions (0.60) (1.04) (1.13) (0.81) (0.72)
Total Distributions (1.02) (1.51) (1.60) (1.16) (1.07)
Net asset value, end of year $ 18.33 $ 16.69 $ 16.36 $ 15.42 $ 15.74
Total Return 16% 12% 17% 5% 11%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 193 $ 171 $ 137 $ 115 $ 102
Ratio of expenses to average net assets 0.86% 0.85% 0.86% 0.87% 0.87%
Ratio of net investment income to average net assets 2.48% 2.81% 3.01% 2.22% 2.30%
Portfolio turnover rate 16% 28% 52% 22% 21%
Average commission rate* $ .0468 $ .0501 - - -
</TABLE>
*For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged. This amount may vary from period to period and fund
to fund depending on the mix of trades executed in various markets where
trading practices and commission rate structures may differ.
See accompanying Notes to Financial Statements.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
of Scout Stock Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Scout
Stock Fund, Inc., including the statement of net assets, as of June 30, 1997,
and the related statement of operations, statements of changes in net assets
and the financial highlights for the periods indicated thereon (periods
presented prior to June 30, 1996 were audited by other independent accountants
whose reports thereon expressed unqualified opinions). These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included verification of securities
owned as of June 30, 1997, by confirmation, or by the application of
alternative auditing procedures with respect to unsettled portfolio security
transactions. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scout Stock Fund, Inc. as of June 30, 1997, the results of its operations, the
changes in its net assets and the financial highlights for the period
indicated in the first paragraph, in conformity with generally accepted
accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 22, 1997
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
Elizabeth L. Allwood, Vice President
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
John G. Dyer, Vice President
Constance E. Martin, Vice President
Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson, 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
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