SCOUT
STOCK FUND
A no-load mutual fund
with primary emphasis
on long-term growth of
both capital and income.
Annual Report
June 30, 1998
TO THE SHAREHOLDERS
After adjusting for a semi-annual dividend and capital gains
distribution, Scout Stock Fund investors had a -2.55% total return
(price change and reinvested dividends) for the quarter ended June 30,
1998. This compared to a total return of 3.3% for the Standard & Poor's
500 Index, -4.3% for the Value Line Index and -4.6% for the Russell 2000
Index.
The rise in the S&P 500 during the quarter and for the last three years
has been progressively more and more concentrated in the largest
capitalization stocks. The top 25 stocks by size now account for more
than 35% of overall results in the index. These stocks rose 4.0% for the
quarter, but an equally weighted index of the 500 stocks declined 1.6%
and the median stock for the index declined 2.4%. In addition, the
bottom 475 stocks declined 2.0%.
Your Fund continues to emphasize broad diversification with fairly
equally weighted positions in undervalued stocks. The Fund's portfolio
has an average market capitalization of $16 billion (less than 30% of
the S&P 500's average) simply because it is not overly concentrated in
the largest stocks, which are trading at historically high levels. The
volatile nature of the market further justifies our opportunity-buying
reserves of about 20%, even though the average stock fund now has less
than 5% of its assets in reserves - the lowest since 1972.
Basic material stocks performed below most other groups because of
commodity price pressure from a strong U.S. dollar and weak Asian
imports. The impact was most dramatic on energy stocks. However, stocks
in these groups appear to offer unusual relative value for the long term
and we remain heavily committed to them. The Fund also is overweighted
versus the broader index in consumer cyclicals, retail and service
groups. These companies benefited from lower import prices and robust
U.S. consumer activity. Utilities, the other area of overweighting,
lagged early in the quarter but were leaders in June.
Your Fund is underweighted in financial stocks, where takeover activity
has stretched valuation opportunities, and technology stocks, where
speculative enthusiasm seems most excessive.
The Fund's objective is to provide long-term growth of both capital and
dividend income. Current yield is secondary to the long-term growth
objective.
We cannot predict when investor attitudes will change, but it has always
been prudent over the long term to remain broadly diversified and
committed to stocks offering the best values based on their
fundamentals. Your Fund's price-to-earnings ratio is 88% of the overall
market, the price-to-book-value ratio is 62% of the market and the
dividend yield is more than 50% above the market. All demonstrate our
value-investing approach.
Briggs & Stratton and Duke Realty were newly established positions in
the portfolio during the quarter. Digital Equipment stock was exchanged
for Compaq shares and cash, and Mercantile Stores was eliminated on a
cash takeover by Dillard, Inc.
We would encourage you to review this annual report's long-term historic
distributions table, long-term rates of return table and Top 10 equity
holdings table.
For the six months ended June 30, 1998, shareholders received an
ordinary income dividend of $.18 per share and a long-term capital gain
of $.30 per share.
For corporate shareholders, 39.17% of ordinary income distributions
qualify for the corporate dividends received deduction.
We appreciate you as a valued shareholder of Scout Stock Fund and
encourage your questions and comments.
Sincerely,
/s/David B. Anderson
David B. Anderson
UMB Investment Advisors
CHART - HYPOTHETICAL GROWTH OF $10,000
as of June 30, 1998
SCOUT STOCK FUND vs Lipper Growth Fund Index*
SOURCE: UMB Investment Advisors
*Unmanged index of stocks, bonds or mutual funds (there are no direct
investments or fees in these indices).
For illustrative purposes only; may not represent your returns.
CHART - COMPARATIVE RATES OF RETURN
as of June 30, 1998
4 1/2 Years 9 1/2 Years 14 1/2 Years
Scout Stock Fund 13.14% 12.23% 12.12%
Scout Stock Fund Equities 17.10% 15.28% 15.03%
Lipper Growth & Income* 19.99% 16.22% 15.41%
S&P 500* 24.60% 19.20% 17.83%
Value Line Composite* 13.37% 10.35% 9.13%
Scout Stock Fund's average annual compound returns for 1-, 5-, and
10-year periods ended June 30, 1998, are 15.41%, 13.09% and 11.97%,
respectively.
Performance data contained in this report are for past periods
only. Past performance is not indicative of future performance.
Investment return and share value may fluctuate, and redemption value
may be more or less than original cost.
*Unmanaged index of stocks, bonds or mutual funds (there are no direct
investments or fees in these indices).
CHART - FUND DIVERSIFICATION
Transportation & Service 3.9%
Consumer Cyclical 15.5%
Consumer Staples 14.4%
Energy 8.0%
Financial 1.0%
Capital Goods 5.8%
Technology 6.2%
Utilities 15.0%
Cash Equivalents 18.4%
Basic Materials 11.0%
As of June 30, 1998, statement of assets.
CHART - TOP 10 EQUITY HOLDINGS
Market Percent
Value (000's) of Total
SBC Communications, Inc. $3,200 1.66%
International Business Machines Corp. 2,870 1.49%
Williams Companies, Inc. 2,810 1.46%
Bob Evans Farms, Inc. 2,437 1.26%
Unicom Corporation 2,174 1.13%
Alza Corp. 2,163 1.12%
Lance, Inc. 2,126 1.10%
Dillards, Inc. 2,072 1.08%
USX-Marathon Group 2,059 1.07%
American Greetings Corp. 2,038 1.06%
Top 10 Equity Holdings Total: $23,949 12.43%
NOTE: All market values based on June 30, 1998, statement of assets.
CHART - HISTORICAL PER SHARE RECORD
INCOME & CUMULATIVE**
NET SHORT-TERM LONG-TERM VALUE PER
ASSET GAINS GAINS SHARE PLUS
VALUE DISTRIBUTION DISTRIBUTION DISTRIBUTIONS
12/31/82 $ 9.87 $ 0.03 $ - $ 9.90
12/31/83 11.34 0.86 - 12.23
12/31/84 11.20 0.62 0.11 12.82
12/31/85 12.74 0.73 0.22 15.31
12/31/86 12.78 0.51 1.01 16.87
12/31/87 11.87 0.78 0.97 17.71
12/31/88 12.62 0.49 0.39 21.39
12/31/89 13.87 0.62 0.49 21.70
12/31/90 12.76 0.59 0.21 21.39
12/31/91 15.40 0.48 - 24.51
12/31/92 15.77 0.39 0.31 25.58
12/31/93 16.24 0.38 0.79 27.21
12/31/94 15.01 0.46 1.19 27.63
12/31/95 16.34 0.73 0.87 30.56
12/31/96 16.97 0.47 0.62 32.28
12/31/97 19.01 0.46 1.00 35.78
6/30/98* 19.63 0.18 0.30 36.88
*Six-month only. Distributions typically occur in June and December.
**Does not assume any compounding of reinvested distributions.
Table shows calendar year distributions and net asset values; may differ
from fiscal year annual reports.
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 ("FDIC").
These shares involve investment risks, including the possible loss of
the principal invested.
FINANCIAL STATEMENTS
Statement of Net Assets
June 30, 1998
Market
Shares Company Value
COMMON STOCKS - 80.51%
Basic Materials - 10.91%
5,000 Aluminum Co. of America $ 329,688
85,000 Brush Wellman, Inc. 1,747,812
20,000 Carpenter Technology Corp. 1,005,000
12,000 Corning, Inc. 417,000
69,150 Cyprus Amax Minerals Co. 916,237
6,000 duPont E I deNemours & Co.* 447,750
25,000 Eastman Chemical Co. 1,556,250
100,000 Engelhard Corp. 2,025,000
7,000 Georgia Pacific Corp. 412,563
7,000 Georgia Pacific Corp. Timber Group 161,437
25,000 Hercules, Inc. 1,028,125
35,000 International Paper Co. 1,505,000
53,000 Mallinckrodt Group, Inc. 1,573,437
50,000 Nalco Chemical Co. 1,756,250
30,000 Newmont Mining Co. 708,750
10,000 Rohm & Haas Co. 1,039,375
27,000 Union Camp Corp. 1,339,875
35,000 Weyerhaeuser Co. 1,616,563
110,000 Worthington Industries, Inc. 1,656,875
21,242,987
Capital Goods - 5.76%
30,000 Aeroquip-Vickers, Inc. 1,751,250
15,000 Briggs & Stratton Corp. 561,563
50,000 Browning Ferris Industries, Inc. 1,737,500
125,000 Calgon Carbon Corp. 1,242,187
33,000 Cooper Industries, Inc. 1,812,938
7,000 Deere & Co. 370,125
2,500 Fluor Corp. 127,500
18,000 Global Industries Technologies, Inc.* 258,750
24,000 Grainger (W.W.), Inc. 1,195,500
40,000 Snap-On, Inc. 1,450,000
20,000 Waste Management International PLC 700,000
11,207,313
Consumer Cyclical - 15.50%
683 Abercrombie & Fitch Co.* 30,052
40,000 American Greetings Corp. 2,037,500
20,000 Ascent Entertainment Group* 222,500
71,375 Bassett Furniture Industries, Inc. 2,011,883
12,000 Black & Decker Corp. 732,000
40,000 Block (H&R), Inc. 1,685,000
40,000 Brown Group, Inc. 795,000
15,000 Cognizant Corp. 945,000
50,000 Dillards, Inc. 2,071,875
40,000 Donnelley (R.R.) & Sons Co. 1,830,000
28,000 Dun & Bradstreet 1,011,500
5,000 Ford Motor Co. 295,000
14,000 Gannett Co., Inc. 994,875
15,000 General Motors Corp. 1,002,188
40,000 Genuine Parts Co. 1,382,500
30,000 Hillenbrand Industries, Inc. 1,800,000
50,000 Limited, Inc. 1,656,250
12,000 Masco Corp. 726,000
10,000 May Department Stores Co. 655,000
15,000 Media General, Inc., Cl. A 731,250
10,000 Media One Group, Inc. 439,375
25,000 Penney (J.C.) & Co., Inc. 1,807,812
18,000 Pharmacia & Upjohn, Inc. 830,250
25,000 Readers Digest Assn. `A' 678,125
100,000 Sensormatic Electronics Corp.* 1,400,000
120,000 Stride Rite Corp. 1,807,500
25,000 Toys `R' Us, Inc.* 589,062
30,167,497
Consumer Staples - 14.38%
20,000 Abbott Laboratories 817,500
50,000 Alza Corp. 2,162,500
20,000 American Home Products Corp. 1,035,000
10,000 Anheuser-Busch Companies, Inc. 471,875
95,000 Archer-Daniels-Midland Co. 1,840,625
50,000 Bard (C.R.), Inc. 1,903,125
115,000 Bob Evans Farms, Inc. 2,436,562
95,000 Brinker International* 1,828,750
15,000 Bristol-Myers Squibb Co. 1,724,063
25,000 Covance, Inc.* 562,500
70,000 Darden Restaurants, Inc. 1,111,250
10,000 Eastman Kodak Co. 730,625
19,000 Heinz H.J. Co. 1,066,375
40,000 International Flavors & Fragrances, Inc. 1,737,500
25,000 Kimberly Clark Corp. 1,146,875
95,000 Lance, Inc. 2,125,625
10,000 Merck & Co., Inc. 1,337,500
65,000 Mylan Laboratories, Inc. 1,954,062
60,000 Rubbermaid, Inc. 1,991,250
27,983,562
Energy - 7.97%
30,000 Amoco Corp. 1,248,750
17,000 Atlantic Richfield Co. 1,328,125
40,000 Baker Hughes, Inc. 1,382,500
10,000 Burlington Resources, Inc. 430,625
30,000 Dresser Industries, Inc. 1,321,875
30,000 Halliburton Co. 1,336,875
25,000 Kerr-McGee Corp. 1,446,875
80,000 Mitchell Energy & Development 1,600,000
25,000 Phillips Petroleum Co. 1,204,687
15,000 Schlumberger LTD 1,024,688
65,000 Union Pacific Resources Group, Inc. 1,141,563
60,000 USX-Marathon Group 2,058,750
15,525,313
Financial - 1.02%
1,310 Associates 1ST Capital 100,706
10,000 First Chicago NBD Corp. 886,250
20,000 Liberty Corp. S.C. 1,006,250
1,993,206
Technology - 6.19%
15,000 AMP, Inc. 515,625
40,000 Apple Computer, Inc.* 1,147,500
20,000 Boeing Co. 891,250
1,000 Cisco Systems, Inc.* 92,063
23,625 Compaq Computer Corp. 670,359
10,000 Electronic Data Systems Corp. 400,000
25,000 International Business Machines Corp. 2,870,313
5,000 Lucent Technologies, Inc. 415,937
32,000 Motorola, Inc. 1,682,000
40,000 Novell, Inc.* 510,000
20,000 Perkin-Elmer Corp. 1,243,750
1,147 Raytheon Co Cl. A 66,096
12,000 Telxon Corp. 388,500
20,000 Texas Instruments, Inc. 1,166,250
12,059,643
Transportation & Services - 3.86%
40,000 CNF Transportation, Inc. 1,700,000
20,000 Consolidated Freightways Corp.* 278,750
3,000 Cotelligent Group, Inc.* 70,125
15,000 CSX Corp. 682,500
900 Duke Realty Investment, Inc. 21,319
24,000 FDX Corp.* 1,506,000
15,000 Norfolk Southern Corp. 447,187
20,000 Roadway Express, Inc. 377,500
45,000 Southwest Airlines Co. 1,333,125
25,000 Union Pacific Corp. 1,103,125
7,519,631
Utilities - 14.92%
28,000 AT&T Corp. 1,599,500
40,000 Ameren Corp. 1,590,000
32,000 Bell Atlantic Corp. 1,460,000
22,000 Bell South Corp. 1,476,750
35,000 Central & South West Corp. 940,625
60,000 Comsat Corp. 1,698,750
45,000 Dominion Resources, Inc. VA 1,833,750
6,000 Duke Energy Corp. 355,500
65,000 Entergy Corp. 1,868,750
45,000 Florida Progress Corp. 1,850,625
10,000 GTE Corp. 556,250
75,000 Niagara Mohawk Power Corp.* 1,120,312
80,000 SBC Communications, Inc. 3,200,000
50,000 Scana Corp. 1,490,625
40,000 Texas Utilities Co. 1,665,000
22,273 U. S. West, Inc. 1,046,836
62,000 Unicom Corporation 2,173,875
83,250 Williams Companies, Inc. 2,809,688
10,000 Wisconsin Energy Corp. 303,750
29,040,586
TOTAL COMMON STOCKS (Cost $110,246,830) - 80.51% 156,739,738
CONVERTIBLE CORPORATE BONDS - 0.80%
$ 500,000 Telxon Corp., Cv. Sub. Deb.,
7.50%, due June 1, 2012 585,000
1,000,000 WMX Technologies, Inc., Cv. Sub. Notes,
2.00%, due January 24, 2005 973,120
TOTAL CONVERTIBLE CORPORATE BONDS (Cost $1,465,843) - 0.80% 1,558,120
SHORT-TERM CORPORATE NOTES - 14.08%
1,500,000 Aluminium Company of America,
5.52%, due August 3, 1998 1,492,180
1,500,000 Atlantic Richfield Co.,
5.53%, due August 7, 1998 1,491,244
1,500,000 Becton Dickenson,
5.62%, due July 15, 1998 1,496,487
1,000,000 Becton Dickenson,
5.51%, due July 16, 1998 997,551
1,500,000 Chevron USA Inc.,
5.50%, due August 14, 1998 1,489,688
1,000,000 Coca-Cola Co.,
5.48%, due July 9, 1998 998,630
1,500,000 Deere & Co.,
5.52%, due August 4, 1998 1,491,950
1,000,000 Disney (Walt) Co.,
5.48%, due July 9, 1998 998,605
1,500,000 duPont (E.I.) deNemours & Co.,
5.50%, due July 29, 1998 1,493,354
1,500,000 Gannett Inc.,
5.48%, due July 7, 1998 1,498,402
1,500,000 Gannett Inc.,
5.48%, due July 8, 1998 1,498,173
1,500,000 General Mills Inc.,
5.53%, due July 2, 1998 1,499,539
1,500,000 Heinz Co.,
5.53%, due August 10, 1998 1,490,553
1,500,000 Hershey Foods Corp.,
5.51%, due July 30, 1998 1,493,113
1,500,000 International Business Machines,
5.48%, due July 2, 1998 1,499,543
1,500,000 Lucent Technologies Inc.,
5.48%, due August 7, 1998 1,491,323
1,500,000 Proctor & Gamble Co.,
5.47%, due July 10, 1998 1,497,721
1,500,000 Progress Capital Co.,
5.50%, due August 11, 1998 1,490,375
1,000,000 Times Miror Co.,
5.50%, due July 1, 1998 999,847
1,000,000 Toys R Us,
5.53%, due July 14, 1998 997,850
TOTAL SHORT-TERM CORPORATE NOTES (Cost $27,406,128) - 14.08% 27,406,128
Face Market
Amount Description Value
GOVERNMENT SPONSORED ENTERPRISES - 3.30%
$ 1,000,000 Federal Home Loan Bank Corp.
Discount Notes, 5.39%, due August 13, 1998 993,412
1,500,000 Federal National Mortgage Assn.
Discount Notes, 5.35%, due October 2, 1998 1,479,046
2,000,000 Federal National Mortgage Assn.
Discount Notes, 5.40%, due October 6, 1998 1,970,600
2,000,000 Federal National Mortgage Assn.
Discount Notes, 5.39%, due July 30, 1998 1,991,017
TOTAL GOVERNMENT SPONSORED ENTERPRISES
(Cost $6,434,075) - 3.30% 6,434,075
REPURCHASE AGREEMENT (Cost $525,000) - 0.27%
525,000 Northern Trust Co., 5.55%, due July 1, 1998,
(Collateralized by U.S. Treasury Notes,
5.75% due September 30, 1999) 525,000
TOTAL INVESTMENTS (Cost $146,077,876) - 98.96% $ 192,663,061
Other assets less liabilities - 1.04% 2,015,788
TOTAL NET ASSETS - 100.00%
(equivalent to $19.63 per share;
20,000,000 shares of $1.00 par value
capital shares authorized;
9,918,505 shares outstanding) $ 194,678,849
For federal income tax purposes, the identified cost of investments owned at
June 30, 1998 was $146,077,876.
Net unrealized appreciation for federal income tax purposes was $46,585,185,
which is comprised of unrealized appreciation of $51,769,423 and unrealized
depreciation of $5,184,238.
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 1998
ASSETS:
Investment securities, at market value
(identified cost $146,077,876) $ 192,663,061
Dividends receivable 247,216
Interest receivable 11,688
Receivable for investments sold 1,760,000
Total assets 194,681,965
LIABILITIES:
Disbursements in excess of demand deposit cash 3,116
Total liabilities 3,116
NET ASSETS $ 194,678,849
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 142,818,045
Accumulated undistributed income:
Net investment income 356,931
Net realized gain on investment transactions 4,918,688
Net unrealized appreciation on investments 46,585,185
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 194,678,849
Capital shares, $1.00 par value
Authorized 20,000,000
Outstanding 9,918,505
NET ASSET VALUE PER SHARE $ 19.63
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Operations
Year Ended June 30, 1998
INVESTMENT INCOME:
Income:
Dividends $ 3,557,360
Interest 2,233,817
5,791,177
Expenses:
Management fees 1,677,799
Government fees 24,820
1,702,619
Net investment income 4,088,558
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions 12,393,259
Increase in net unrealized appreciation on investments 11,624,376
Net realized and unrealized gain on investments 24,017,635
Net increase in net assets resulting from operations $ 28,106,193
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
For The Years Ended June 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 4,088,558 $ 4,422,675
Net realized gain from investment transactions 12,393,259 9,085,325
Increase in net unrealized appreciation on investments 11,624,376 14,399,084
Net increase in net assets resulting from operations 28,106,193 27,907,084
Net equalization included in the price of shares issued
and redeemed (67,790) (19,833)
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (3,967,243) (4,357,197)
Net realized gain from investment transactions (10,321,119) (6,144,230)
Decrease in net assets from distributions (14,288,362) (10,501,427)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 1,294,080 and 1,686,751 shares sold 23,397,925 28,261,940
Net asset value of 509,805 and 453,543 shares issued for
reinvestment of distributions 11,487,515 8,013,036
34,885,440 36,274,976
Cost of 2,399,568 and 1,866,291 shares redeemed (46,635,978) (31,878,538)
Net increase (decrease) in net assets from
capital share transactions (11,750,538) 4,396,438
Net increase in net assets 1,999,503 21,782,262
NET ASSETS:
Beginning of year 192,679,346 170,897,084
End of year (including undistributed net investment income
of $356,931 and $303,406, respectively) $ 194,678,849 $ 192,679,346
*Distributions to shareholders:
Income dividends per share $ 0.40 $ 0.42
Capital gains distribution per share $ 1.04 $ 0.60
</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, 1998 (excluding
commercial paper, repur-
chase agreements and short-term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 19,488,694 $ 20,335,897
Proceeds from sales 38,984,176 29,995,787
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.
5. SUBSEQUENT EVENT - Subsequent to the Fund's year-end, the Fund name
will change to UMB Scout Stock Fund, Inc.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share
outstanding throughout the period.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net assets, beginning of year $ 18.33 $ 16.69 $ 16.36 $ 15.42 $ 15.74
Income from investment operations:
Net investment income 0.41 0.43 0.48 0.48 0.35
Net realized and unrealized gains on securities 2.33 2.23 1.36 2.06 0.49
Total from Investment Operations 2.74 2.66 1.84 2.54 0.84
Distributions from:
Net investment income (0.40) (0.42) (0.47) (0.47) (0.35)
Net realized gain on investment transactions (1.04) (0.60) (1.04) (1.13) (0.81)
Total Distributions (1.44) (1.02) (1.51) (1.60) (1.16)
Net asset value, end of year $ 19.63 $ 18.33 $ 16.69 $ 16.36 $ 15.42
Total Return 15% 16% 12% 17% 5%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 195 $ 193 $ 171 $ 137 $ 115
Ratio of expenses to average net assets 0.86% 0.86% 0.85% 0.86% 0.87%
Ratio of net investment income to average net assets 2.07% 2.48% 2.81% 3.01% 2.22%
Portfolio turnover rate 10% 16% 28% 52% 22%
Average commission rate* $ .0450 $ .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.
INDEPENDENT ACCOUNTANTS' REPORT
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, 1998, 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, 1998, 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, 1998, the
results of its operations, the changes in its net assets and the
financial highlights for the periods indicated in the first paragraph,
in conformity with generally accepted accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 24, 1998
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
Martin A. Cramer, Vice President & Secretary
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
Custodian
UMB Bank, n.a., Kansas City, Missouri
SCOUT FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE (800) 996-2862
www.umb.com
Underwriter & Distributor: Jones & Babson, Inc., Kansas City, Missouri
JB22B 8/98
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