DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
Management's Discussion of Fund Performance
===============================================================================
Dear Shareholder:
Over the past 12 months, investors saw a period of solid market
growth followed by increased volatility during the first half of 1996,
which resulted from a widening divergence of opinion over the direction of
the economy and its meaning for the market.
Stock prices received support from investors who saw signs that the
economy was sound and that corporate profitability may be safe for the
time being. Despite market fluctuations, the Dow Jones Industrial
Average was hovering near record highs well into the second quarter.
Others saw signs in the period's low unemployment figures and rising
commodity prices that the economy may be too strong and that inflation
might heat up. As a result, bonds suffered and interest rates rose.
As seasoned, long-term investors, we observe these short-term
market conditions but don't react to them. We steadfastly maintain our
proven, "all-weather" investment approach in managing the Davis New
York Venture Fund.
Our Performance
For the fiscal year ended July 31, the Davis New York Venture Fund's
A shares returned 13.04%1, compared to 16.56% for the S&P 500 Stock
Index. We did well with our investments in select consumer product,
banking and insurance companies, especially Coca-Cola, First Bank
Systems, Traveler's Group, Citicorp and Allstate. We also realized strong
gains from the sale of our positions in two technology stocks, Cirrus Logic
and Texas Instruments. On the other hand, market volatility hurt the
performance of some key insurance, manufacturing and publishing stocks
we owned, including 20th Century Industries, Applied Materials, News
Corp. and Adobe Systems.
As long-term investors, we measure our success by the long-term
wealth we create. We strive to create an environment in which
compounding can flourish. Since the Davis New York Venture Fund's
inception in 1969, we have achieved noteworthy performance: we've
outperformed the S&P 500 in 20 out of the last 27 calendar years, and our
average annual return since inception, at 13.9%1, is about three points
above this benchmark.2
Lipper Analytical Services, a prestigious industry measurement
service, ranks the Davis New York Venture Fund in the top five of all
growth equity funds they've tracked since 1969. Davis New York Venture
Fund has been in the top 10% of all growth funds for the last 5, 10, 15, 20,
and 25 years, which we believe is an unparalleled record of consistency3.
And we were named to this year's Forbes Honor Roll, for the fourth year in
a row. Forbes' selection criteria are so stringent that only 18 out of the
more than 7,000 eligible mutual funds make the list, based upon their
ability to perform in bull and bear markets alike.4
_______
1 Excluding the effect of a sales commission, currently a maximum of 4.75%.
2 From 2/17/69 through 7/31/96, the average annual compound return for the S&P
500 Stock Index was 11.2%. Direct investments in the index are not available.
Our Investment Principles
We have managed the Davis New York Venture Fund for 27 years
using our distinctive investment approach, which emphasizes rigorous
fundamental research -- getting behind the numbers and investing in
quality company managements; investing in overlooked, undervalued
companies to target long-term out-performance, and actively managing
risk. We ask, "How much can you lose?" before we even dream about "How
much can you make?"
We are steadfastly committed to our investment principles, because
they are what we stand for. We act on our convictions by investing a
substantial amount of our own money in the Davis New York Venture Fund,
side-by-side with our shareholders. As we like to say, "We eat our own
cooking."
Our Investment Strategy for Davis New York Venture
Winning companies are made by good people. We're optimistic that
we can find good companies run by good people, and buy them at the right
price. A stock is a company, not just a piece of paper, so we evaluate
businesses rather than poring over momentum charts. We like to know if
management is made up of "doers" rather than "bluffers." Bluffers
always have an excuse when things don't turn out as they expect.
Since we are long-term investors who stress "research, research,
and more research," we look for secular investment themes that will
drive a decade, not five weeks or five years. Our research wouldn't do us
much good if we only owned stocks for five weeks. The market is a
discounter that's paid to look ahead--it's a barometer, not a thermometer,
so if you take a longer time-frame, that creates opportunity.
Our strategy is to make big money in big-cap stocks, and part of the
big-cap secret is catching an out-of-favor company that will rotate back
into favor. We look for exceptionally well-run companies headed by
management teams with vision and commitment. Archer-Daniels-Midland
is one example of a stock that we believe fits this profile. It's a company
that obviously faces a whole host of difficulties, but we are impressed
because when we talk to competitors, we get a sense of how tough this
company is. They've got a strong balance sheet, and the stock is where it
was four years ago.
We focus on companies growing between 7% and 15% a year,
hopefully averaging at least 10%. We find we can buy these
moderate-growth companies a lot cheaper than faster growers, often at
eight to fifteen times next year's projected earnings. We'll buy these
companies all day long when we can find them.
We emphasize "the Davis double-play": Buy a stock that trades at
ten times earnings, with earnings growth of 10%. When growth picks up,
so does the multiple. As a result, we're not exposed to big losses along
the way.
_______
3 Among all growth funds tracked by Lipper, including 248 funds for
the last five years (top 9%); 161 for the last 10 years (top 8%); 110 for
the last 15 years (top 5%); 102 for the last 20 years (top 7%); and 90 for
the last 25 years (top 8%).
4 Forbes' Honor Roll criteria include performance (minimum growth of
a $10,000 investment to $43,000 since 7/31/84); capital preservation
(performance in top 45% of all funds in down markets); and management
continuity (tenure of at least five years, with average of five years for
teams, allowing maximum of 10 years for any team member).
Our Financial Stock Theme
Our major investment theme for the last few years has been
financial stocks, particularly large, established companies with strong
brand names and strong distribution systems. This sector is favored by a
long-term trend: the need for aging Baby-Boomers to save for retirement
and their children's education.
We view financial companies as growth stocks in disguise. Many
sell at 10 to 12 times their future earnings estimates and have growth
rates of 10% or more. Except for Charles Schwab Corp., no financial
stocks are currently trading at a sizable premium to the market, while
many of the brand-name companies are selling at 30% to 40% discounts.
It's for these reasons that financial stocks make up about half of our
portfolio, and that more than half of our top 10 holdings are in the
financial sector, including American Express, Wells Fargo, General
Reinsurance, Citicorp and Morgan Stanley.
A lot of people ask us if we're taking on too much risk by
concentrating in the financial sector. We don't think so, for several
reasons. First, since Shelby Cullom Davis established our investment
principles in the mid-1940s, we've developed a core competency in
financial stock investing and know this sector extremely well. Second,
lumping financials all together is like saying GE is like GM because they
both hire lots of people and bend metal. Our investments are spread over
three very different financial sectors -- insurance, banking, and
diversified financial services, which includes investment banking and
stock brokerage.
We like insurance stocks because they are compounding machines.
We especially like General Reinsurance on this basis. We look for the
company to earn $10.50 per share in 1996 and $12 per share in 1997. It is
AAA-rated and has been buying back its own stock. Furthermore, as more
privately owned companies are created from state-owned enterprises in
countries like China and Russia, we believe the global need for business
insurance will expand, and that General Reinsurance is well-positioned to
exploit this emerging trend.
Many people believe that all financial stocks are highly vulnerable to
hikes in inflation and interest rates. We don't think that's necessarily
true. Though the value of some of the assets that financial companies own
tend to decline when interest rates rise, that's often balanced by an
increase in their income because they can invest their cash at higher
interest rates.
And while interest rates may rise from here, we're not looking for
the kind of murderous hikes we saw in the late Seventies and early
Eighties, when rates swung between 5% and 15%. Instead, we think rates
will remain in the 6% to 8% range. Our fund may lag when interest rates
are moving up because people believe many of the stocks we own are
interest-rate sensitive. But when the next bull market starts, we'll
improve earlier because investors will anticipate lower interest rates and
come back to these conservative stocks.
Additional Investment Themes
Beyond financial stocks, we've positioned Davis New York Venture to
focus on three additional major investment themes. First, we like a
number of high-quality, growth stocks whose price volatility creates
buying opportunities -- stocks like Intel and Hewlett Packard. Second, we
are investing in companies that generate strong cash flows and are
undergoing restructuring or turn-arounds. Examples here are Harcourt
General and General Motors. Finally, we also find attractive select
high-quality multinational companies poised to exploit high-growth
overseas, like McDonald's, Boeing and Gillette.
McDonald's is a company which generates 57% of its earnings from
international operations. We believe their overseas business will
increase at 15% to 20% per year. The stock is currently selling at 20
times earnings. The company has a hedge against inflation with royalty
income. In addition, it owns a lot of real estate under its hamburger
stands. McDonald's opens 2,500 restaurants per year and has 18,000 now.
It has also been buying back its stock. It reminds us of Coca-Cola ten
years ago. We believe McDonald's Corp. will earn $2.20 per share in 1996
and $2.70 per share in 1997.
Over the last 12 months, we've also increased our holdings in the
natural resources sector, particularly in energy, which has recovered from
a 10-year slump in commodities prices. We've added such top-flight
companies as Unocal and Noble Affiliates to our portfolio, while
increasing our holdings in such world-class firms as Schlumberger and
Burlington Resources.
Burlington Resources is the largest U.S. natural gas producer. For
years, the stock was beaten down because gas prices did not rise. Yet,
Burlington has done a good job of expanding and producing reserves, and is
transitioning its gas sales from the West Coast to the higher-priced East
Coast. Currently, the stock sells at eight times its cash flow, when in the
past it has been as high as 12 times cash flow. Management is buying into
the stock now. We feel like we're getting good value since the price is
only a few points above its low.
Our Outlook
The Davis New York Venture Fund's achievements over the past 27
years speak to the effectiveness of our underlying philosophy, and most
recently to the success of our management team approach. The two of us
like to think of ourselves as a "60-year brain with 30-year old legs."
We're confident that our long-term, thematic, all-weather
investment approach continues to have the fund well-positioned for the
future. Having managed through a number of "bull" and "bear" market
cycles, we know a 10%-20% correction can occur at any time, in any
market environment. If that occurs, we'll view it as a potential buying
opportunity. We're also well-positioned to lock-in gains if euphoria
pushes the market too high. Regardless of what happens to the market,
we'll steadfastly maintain our long-term investment approach.
We believe investing is the most exciting business in the world
because it doesn't limit you to one industry. We have great faith in this
country, in the fundamental soundness of our economy, and in our people
who have come here from all over the globe to start businesses and make
their fortunes. This is what makes great companies and great investment
opportunities.
Sincerely,
Shelby M. C. Davis Christopher C. Davis
Co-Portfolio Managers
September 3, 1996
DAVIS NEW YORK VENTURE FUND, INC.
Comparison of Davis New York Venture Fund, Inc., Class A Shares and
Standard and Poor's 500 Stock Index
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1996.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
(This calculation includes an initial (This calculation includes a (There is no contingent deferred
sales charge of 4 3/4%). contingent deferred sales charge of 3%) sales charge applicable to this
calculation).
<S> <C> <C> <C> <C> <C>
One Year..................... 7.66% One Year......................... 8.82% One Year................ 11.78%
Five Years................... 15.67% Life of Class (December 1, 1994 Life of Class (December 20, 1994
Ten Years.................... 15.24% through July 31, 1996)25.16% through July 31, 1996)25.88%
</TABLE>
$10,000 invested over ten years. Let's say you invested $10,000 in Davis
New York Venture Fund, Class A Shares on July 31, 1986 and paid a 4 3/4%
sales charge. As the chart shows, by July 31, 1996 the value of your
investment would have grown to $41,352 - a 313.52% increase on your
initial investment. For comparison, look at how the S&P 500 did over the
same period. With dividends reinvested, the same $10,000 investment
would have grown to $36,853 - a 268.53% increase.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement period Davis New York
Venture Fund S&P 500 Index
------------------ ------------------- -------------
<S> <C> <C>
FYE 7/31/86 $ 9,525 $10,000
FYE 7/31/87 11,926 13,929
FYE 7/31/88 11,531 12,293
FYE 7/31/89 15,387 16,211
FYE 7/31/90 16,636 17,262
FYE 7/31/91 19,013 19,459
FYE 7/31/92 22,564 21,944
FYE 7/31/93 27,144 23,855
FYE 7/31/94 28,748 25,080
FYE 7/31/95 36,569 31,619
FYE 7/31/96 41,352 36,853
</TABLE>
The performance of Class B Shares and Class C Shares will be greater than
or less than the line shown for Class A Shares based on the differences in
loads and fees paid by shareholders investing in the different classes.
Standard & Poor's is an unmanaged index and has no specific investment
objective. The index does not take into account any sales charge and
investments cannot be made directly into an index.
The performance data for Davis New York Venture Fund contained in this
report represents past performance and assumes that all distributions
were reinvested, and should not be considered as an indication of future
performance from an investment in the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
DAVIS NEW YORK VENTURE FUND, INC.
Portfolio Holdings as of July 31, 1996
Chart omitted. Details of chart are as follows:
<TABLE>
<CAPTION>
Portfolio Makeup % of Fund Assets
---------------- ----------------
<S> <C>
Common Stocks 86.2%
Preferred Stocks 1.2%
Bonds 0.1%
Cash & Cash Equivalents 12.5%
</TABLE>
Chart omitted. Details of chart are as follows:
<TABLE>
<CAPTION>
Sector Weightings % of Portfolio
----------------- --------------
<S> <C>
Manufacturing 6.9%
Transportation 1.4%
Insurance 21.8%
Real Estate 3.2%
Diversified Financial Services 14.1%
Banking 13.6%
Pharmaceuticals 3.3%
Consumer Products 14.0%
Technology 10.1%
Retail 2.3%
Energy 8.3%
Other 1.0%
</TABLE>
Top 10 Holdings
Stock Sector % Fund Assets
- ------------------------------------------------------------------------------
American Express Co. Diversified Financial Services 3.5%
Intel Corp. Technology 2.9
Wells Fargo & Co. Banking 2.5
Hewlett- Packard Co. Technology 2.5
General Re Corp. Insurance 2.4
Citicorp Banking 2.4
Coca-Cola Company Consumer Products 2.4
McDonald's Corp. Consumer Products 2.4
Travelers Group Inc. Insurance 2.3
Morgan Stanley Group Inc. Diversified Financial Services 2.2
DAVIS NEW YORK VENTURE FUND, INC.
Portfolio Activity - August 1, 1995 through July 31, 1996
===============================================================================
<TABLE>
New Positions Added (8/1/95-7/31/96)
(Highlighted positions are those greater than 0.99% of 7/31/96 total net assets.)
<CAPTION>
Date of 1st% of 7/31/96
Security Sector Purchase Fund Assets
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Adobe Systems Technology 4/12/96 _%
Applied Materials, Inc. Technology 1/19/96 0.58
Boeing Co. Manufacturing 6/19/96 0.14
CITICORP BANKING 1/9/96 2.43
Donaldson, Lufkin & Jenrette Diversified Financial Services 10/25/95 0.90
EASTMAN KODAK CO. MANUFACTURING 11/20/95 1.24
General Motors Corp. Class H Manufacturing 6/27/96 0.67
Guinness PLC ORD Consumer Products 2/28/96 0.59
HALLIBURTON CO. ENERGY 6/25/96 1.45
Home Depot, Inc. Retail 1/19/96 0.24
Jefferson Smurfit Corp. Manufacturing 8/24/95 0.31
Kimberly-Clark Corp. Manufacturing 4/16/96 0.42
MCDONALD'S CORP. CONSUMER PRODUCTS 9/25/95 2.38
Morgan Stanley Asia
Pacific Fund Inc. Diversified Financial Services 12/4/95 0.84
Noble Affiliates, Inc. Energy 1/19/96 0.47
Noble Affiliates, Inc. (Bond) Energy 2/5/96 0.09
Novellus Systems, Inc. Technology 3/25/96 0.61
Royal PTT Nederland Telecommunications 10/23/95 _
Signet Bank Banking 3/21/96 _
Travelers Aetna Insurance 4/22/96 _
Unocal Corp. Energy 5/16/95 0.10
Weyerhauser Manufacturing 10/9/95 _
</TABLE>
<TABLE>
Positions Closed (8/1/95-7/31/96) (Gains and losses greater than $3 million are highlighted.)
<CAPTION>
Stock Sector Date of Final Sale Gain/(Loss)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Adobe Systems Technology 7/24/96 ($4,073,064)
Alumax, Inc. Manufacturing 2/22/96 696,537
Cirrus Logic, Inc. Technology 4/8/96 27,546,444
Host Marriot Services Consumer Products 2/29/96 1,008,776
Officemax, Inc. Retail 2/22/96 13,534
Republic New York Corp. Banking 12/12/95 5,397,254
Reynolds Metals Co. Manufacturing 5/2/96 774,770
Royal PTT Nederland Telecommunications 2/22/96 83,476
Sears, Roebuck & Co. Retail 12/5/95 3,770,736
Signet Bank Banking 7/3/96 (250,717)
Tandy Corp. Technology 1/10/96 1,824,806
Texas Instruments, Inc. Technology 6/26/96 12,834,229
Transport Holdings Insurance 2/22/96 102,002
Travelers Aetna Insurance 5/7/96 120,595
Warner-Lambert Co. Healthcare 11/21/95 4,111,297
Weyerhauser Manufacturing 3/4/96 (33,396)
</TABLE>
DAVIS NEW YORK VENTURE FUND, INC. -_ CLASS A SHARES
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT OF $10,000
===============================================================================
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT
WITH DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS ACCEPTED
IN ADDITIONAL SHARES
The chart below reflects an assumed investment of $10,000 covering the
period from February 17, 1969 to July 31, 1996, the life of the Company.
The period was one in which common stock prices fluc-tuated and was
characterized by periods of substantial market advances as well as
periods of substantial market declines. The results should not be
considered as a representation of the dividend income or capital gain or
loss which may be real-ized from an investment made in the Company
today.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement period Value of Shares Value of Shares Value of Cost of Shares Cost of Shares
Purchased Through Purchased Through Initial Purchased Through Purchased Through
Distributions Dividends Investment Distributions Dividends
------------------ ----------------- ----------------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
2/17/69 $ -0- $ -0- $ 9,525 $ -0- $ -0-
FYE 7/31/69 -0- -0- 9,574 -0- -0-
FYE 7/31/70 97 -0- 7,561 131 -0-
FYE 7/31/71 131 113 10,206 131 76
FYE 7/31/72 155 187 12,111 131 121
FYE 7/31/73 364 193 10,525 401 155
FYE 7/31/74 275 247 7,946 401 283
FYE 7/31/75 324 572 9,371 401 513
FYE 7/31/76 354 1,008 10,225 401 832
FYE 7/31/77 384 1,331 11,107 401 1,044
FYE 7/31/78 771 1,985 13,743 629 1,304
FYE 7/31/79 1,390 2,544 14,550 1,169 1,721
FYE 7/31/80 4,504 3,675 17,484 3,323 2,189
FYE 7/31/81 9,243 4,760 17,767 7,633 3,137
FYE 7/31/82 12,288 4,061 11,069 15,080 4,343
FYE 7/31/83 22,564 7,919 17,861 16,800 5,299
FYE 7/31/84 24,508 6,871 13,321 25,129 6,316
FYE 7/31/85 35,525 9,740 16,341 29,535 7,455
FYE 7/31/86 50,784 13,630 20,169 34,628 8,800
FYE 7/31/87 67,396 14,756 20,413 47,847 9,734
FYE 7/31/88 70,308 13,720 15,141 69,073 12,205
FYE 7/31/89 93,945 20,148 18,236 75,987 15,025
FYE 7/31/90 100,622 24,833 17,617 85,517 20,167
FYE 7/31/91 115,694 29,339 18,480 93,745 23,007
FYE 7/31/92 138,106 35,872 20,075 104,535 26,629
FYE 7/31/93 166,806 43,950 22,683 114,147 29,813
FYE 7/31/94 177,680 46,959 22,589 125,346 32,902
FYE 7/31/95 227,122 60,055 27,317 134,586 35,366
FYE 7/31/96 260,843 66,292 28,593 156,486 38,619
</TABLE>
No adjustment has been made for any income taxes payable by
shareholders on capital gain distributions and dividends invested in
shares. This illustration reflects no sales charge.
<TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS
July 31, 1996
==============================================================================================================================
<CAPTION>
Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - (86.25%)
AEROSPACE - (0.14%)
<S> <C> <C>
40,000 Boeing Co.................................................................................... $ 3,540,000
---------------
AGRICULTURE - (0.14%)
200,000 Archer-Daniels-Midland Co.................................................................... 3,550,000
---------------
AUTOMOTIVE - (2.37%)
890,000 General Motors Corp.......................................................................... 43,387,500
300,000 General Motors Corp. Class H................................................................. 17,100,000
---------------
60,487,500
---------------
BANKS AND SAVINGS & LOANS - (11.79%)
1,100,000 Banc One Corp................................................................................ 38,087,500
300,000 Barnett Banks, Inc........................................................................... 18,412,500
758,136 Citicorp..................................................................................... 62,072,385
851,500 First Bank System, Inc....................................................................... 52,154,375
15,000 First Union Corp............................................................................. 952,500
473,000 Golden West Financial Corp................................................................... 26,251,500
766,300 State Street Boston Corp..................................................................... 38,506,575
280,000 Wells Fargo & Co............................................................................. 65,205,000
---------------
301,642,335
---------------
CONSUMER PRODUCTS - (5.69%)
30,000 American Brands, Inc......................................................................... 1,365,000
16,000 American Home Products Corp.................................................................. 908,000
1,310,000 Coca-Cola Company............................................................................ 61,406,250
40,000 General Electric Co.......................................................................... 3,295,000
344,000 The Gillette Co.............................................................................. 21,887,000
2,105,000 Guinness PLC ORD............................................................................. 15,127,356
15,640 Nestle S.A. (Switzerland) ADR (144A)......................................................... 893,085
391,000 Nestle S.A. (Switzerland) (Sponsored ADR for Reg. Shrs.)..................................... 22,327,117
32,000 Philip Morris Cos., Inc...................................................................... 3,348,000
453,000 The Seagram Co. Ltd.......................................................................... 15,062,250
---------------
145,619,058
---------------
DIVERSIFIED FINANCIAL SERVICES - (6.71%)
2,070,000 American Express Co.......................................................................... 90,562,500
681,146 Dean Witter, Discover & Co................................................................... 34,653,303
550,000 Federal Home Loan Mortgage Corporation....................................................... 46,337,500
---------------
171,553,303
---------------
ENERGY - (7.22%)
558,200 Amerada Hess Corp............................................................................ 27,142,475
9,600 Amoco Corp................................................................................... 642,000
16,000 Atlantic Richfield Co........................................................................ 1,856,000
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
July 31, 1996
==============================================================================================================================
Value
Shares Security (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
ENERGY - Continued
1,230,900 Burlington Resources, Inc.................................................................... $ 52,620,975
52,000 Chevron Corp................................................................................. 3,009,500
515,020 Energy Ventures Inc.<F2>..................................................................... 15,128,713
80,000 Exxon Corp................................................................................... 6,580,000
713,200 Halliburton Co............................................................................... 37,175,550
8,000 Mobil Corp................................................................................... 883,000
307,800 Noble Affiliates, Inc........................................................................ 12,119,625
303,000 Schlumberger Ltd............................................................................. 24,240,000
16,000 Sonat, Inc................................................................................... 682,000
80,000 Unocal Corp.................................................................................. 2,610,000
---------------
184,689,838
---------------
ENTERTAINMENT - (0.76%)
350,100 The Walt Disney Company...................................................................... 19,474,313
---------------
FOOD & RESTAURANT - (2.96%)
1,315,000 McDonald's Corp.............................................................................. 60,983,125
600,000 Tyson Foods, Inc............................................................................. 14,812,500
---------------
75,795,625
---------------
INTERNATIONAL CLOSED-END INVESTMENT COMPANY - (0.84%)
2,082,667 Morgan Stanley Asia Pacific Fund Inc......................................................... 21,607,670
---------------
INVESTMENT FIRMS - (4.77%)
780,500 Donaldson, Lufkin & Jenrette, Inc............................................................ 23,122,312
480,000 J.P. Morgan & Co., Inc....................................................................... 41,280,000
1,181,200 Morgan Stanley Group Inc..................................................................... 57,583,500
---------------
121,985,812
---------------
LIFE INSURANCE - (4.08%)
2,229,200 Equitable Companies Inc...................................................................... 51,271,600
875,625 SunAmerica, Inc.............................................................................. 53,194,219
---------------
104,465,819
---------------
MANUFACTURING - (0.04%)
6,000 Dow Chemical Co.............................................................................. 446,250
30,000 Maytag Corp.................................................................................. 600,000
---------------
1,046,250
---------------
PAPER PRODUCTS - (2.26%)
1,065,300 Fort Howard Corp.<F2>........................................................................ 24,501,900
12,000 International Paper Co....................................................................... 454,500
713,000 Jefferson Smurfit Corp.<F2>.................................................................. 7,843,000
140,000 Kimberly-Clark Corp.......................................................................... 10,640,000
250,000 The Mead Corp................................................................................ 13,687,500
16,200 Union Camp Corp.............................................................................. 777,600
---------------
57,904,500
---------------
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
July 31, 1996
==============================================================================================================================
Value
Shares Security (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
PHARMACEUTICAL AND HEALTH CARE - (2.87%)
7,000 Bristol-Myers Squibb Co...................................................................... $ 606,375
364,000 Johnson & Johnson............................................................................ 17,381,000
209,000 Merck & Co., Inc............................................................................. 13,428,250
600,000 Pfizer, Inc.................................................................................. 41,925,000
---------------
73,340,625
---------------
PHOTOGRAPHIC - (1.24%)
424,000 Eastman Kodak Co............................................................................. 31,641,000
---------------
PROPERTY/CASUALTY INSURANCE - (14.99%)
1,177,383 The Allstate Corp............................................................ ............... 52,687,889
239,250 American International Group, Inc............................................................ 22,519,406
770,000 W.R. Berkley Corp............................................................................ 31,666,250
1,040.600 Chubb Corp................................................................................... 43,445,050
425,000 General Re Corp.............................................................................. 62,368,750
575,000 NAC Re Corp.................................................................................. 19,837,500
241,800 National Re Corp............................................................................. 12,422,475
446,400 Progressive Corp. (Ohio)..................................................................... 22,543,200
20,000 Robert Plan Corp. Class A <F2><F3>........................................................... 2,700,000
411,800 Transatlantic Holdings Inc................................................................... 27,075,850
1,395,399 Travelers Group Inc.......................................................................... 58,955,608
844,000 20th Century Industries, Inc.<F2>............................................................ 12,660,000
236,100 UNUM Corp.................................................................................... 14,402,100
---------------
383,284,078
---------------
PUBLISHING - (2.38%)
5,000 Dun & Bradstreet Corp........................................................................ 287,500
610,800 Gannet Co., Inc.............................................................................. 40,083,750
290,000 Tribune Co................................................................................... 20,300,000
1,000 Washington Post Co., Class B................................................................. 311,500
---------------
60,982,750
---------------
REAL ESTATE - (2.81%)
308,500 Federal Realty Investment Trust.............................................................. 6,902,688
2,226,400 Host Marriott Corp.<F2>...................................................................... 29,221,500
70,500 Kimco Realty Corp............................................................................ 1,965,188
188,740 Mid-Atlantic Realty Trust.................................................................... 1,816,623
200,000 Saul Centers, Inc............................................................................ 2,600,000
6,700 Simon Property Group, Inc.................................................................... 157,450
341,800 United Dominion Realty Trust................................................................. 4,657,025
484,200 Vornado Realty Trust......................................................................... 20,396,925
100,000 Weingarten Realty, Investors................................................................. 4,025,000
---------------
71,742,399
---------------
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS Continued
July 31, 1996
==============================================================================================================================
Value
Shares Security (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
RETAIL - (2.02%)
850,000 Federated Department Stores, Inc.<F2>........................................................ $ 25,712,500
415,000 Harcourt General, Inc........................................................................ 19,868,125
120,000 Home Depot, Inc.............................................................................. 6,060,000
---------------
51,640,625
---------------
TECHNOLOGY - (6.61%)
620,000 Applied Materials, Inc.<F2>.................................................................. 14,763,750
1,480,000 Hewlett-Packard Co........................................................................... 65,120,000
980,000 Intel Corp................................................................................... 73,561,250
430,000 Novellus Systems, Inc.<F2>................................................................... 15,533,750
---------------
168,978,750
---------------
TELECOMMUNICATIONS - (2.22%)
957,000 Airtouch Communications<F2>.................................................................. 26,317,500
96,343 AT & T Corp.................................................................................. 5,021,879
148,000 Cellular Communications, Inc.<F2>............................................................ 7,816,250
694,000 MCI Communications Corp...................................................................... 17,046,375
10,000 SBC Communications, Inc...................................................................... 488,750
---------------
56,690,754
---------------
TRANSPORTATION - (1.25%)
391,650 Illinois Central Corp........................................................................ 11,259,937
301,000 Union Pacific Corp........................................................................... 20,618,500
---------------
31,878,437
---------------
UTILITIES - (0.08%)
10,000 Carolina Power & Light Co.................................................................... 360,000
12,000 Duke Power Co................................................................................ 574,500
12,000 Edison International......................................................................... 186,000
8,000 Enova Corp.<F1>.............................................................................. 166,000
6,000 New England Electric System.................................................................. 189,750
16,800 Southern Co.................................................................................. 380,100
9,000 Wisconsin Energy Corp........................................................................ 239,625
---------------
2,095,975
---------------
WASTE MANAGEMENT - (0.01%)
12,000 WMX Technologies Inc......................................................................... 355,500
---------------
Total Common Stocks - (identified cost $1,622,913,670).................................. 2,205,992,916
---------------
PREFERRED STOCK - (1.25%)
50,000 Banc One Corp., Conv. Pfd. C $3.50........................................................... 3,334,375
1,755,300 News Corp. Ltd. (The), Sponsored ADR Pfd..................................................... 28,523,625
---------------
Total Preferred Stocks - (identified cost $31,780,806).................................. 31,858,000
---------------
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
July 31, 1996
==============================================================================================================================
Value
Principal Security (Note 1)
CONVERTIBLE BONDS - (0.09%)
$ 2,000,000 Noble Affiliates, Inc., Conv. Sub. Note, 4.25%, 11/01/03
(identified cost $2,029,000)............................................................ $ 2,260,000
---------------
SHORT TERM INVESTMENTS - (12.48%)
20,030,000 Federal Home Loan Mortgage Corporation Discount Note, 5.18%, 08/01/96........................ 20,030,000
27,000,000 Federal Home Loan Mortgage Corporation Discount Note, 5.24%, 08/02/96........................ 26,996,070
16,900,000 Federal Home Loan Mortgage Corporation Discount Note, 5.23%, 08/05/96........................ 16,890,179
40,625,000 Federal National Mortgage Association Discount Note, 5.20%, 08/06/96......................... 40,595,660
10,390,000 Federal Home Loan Mortgage Corporation Discount Note, 5.24%, 08/08/96........................ 10,379,414
35,400,000 Federal Home Loan Mortgage Corporation Discount Note, 5.19%, 08/12/96........................ 35,343,861
16,380,000 Federal Farm Credit Bank Discount Note, 5.20%, 08/13/96...................................... 16,351,608
36,200,000 Federal Home Loan Mortgage Corporation Discount Note, 5.24%, 08/14/96........................ 36,131,502
42,940,000 Federal Home Loan Mortgage Corporation Discount Note, 5.21%, 08/15/96........................ 42,852,999
20,760,000 Federal National Mortgage Association Discount Note, 5.22%, 08/16/96......................... 20,714,847
42,130,000 Federal Home Loan Bank Discount Note, 5.21%, 08/19/96........................................ 42,020,251
10,875,000 Federal Home Loan Bank Discount Note, 5.23%, 08/20/96........................................ 10,844,982
---------------
Total Other Short Term Investments _ (identified cost $319,151,373)..................... 319,151,373
---------------
Total Investments - (identified cost $1,975,874,849)(100.07%)<F1>....................... 2,559,262,289
Liabilities Less Other Assets - (0.07%)................................................. (1,727,871)
---------------
Net Assets - (100%)..................................................................... $ 2,557,534,418
===============
<FN>
<F1> Aggregate cost for Federal Income Tax purposes is $1,972,427,029.
At July 31, 1996 unrealized appreciation (depreciation) of securities for
Federal Income Tax purposes was as follows:
Unrealized appreciation...................................................................... $ 617,411,888
Unrealized depreciation...................................................................... 30,576,628)
--------------
Net appreciation............................................................................. $ 586,835,260
==============
<F2> Non-Income Producing Security
<F3> This security is considered illiquid.
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 1996
===============================================================================================================================
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at value (identified cost $1,975,874,849) (Note 1).............................. $ 2,559,262,289
Cash....................................................................................................... 409,519
Receivables:
Capital stock sold....................................................................................... 8,223,932
Dividends and interest................................................................................... 1,906,723
Other assets............................................................................................... 8,140
---------------
Total assets....................................................................................... 2,569,810,603
---------------
LIABILITIES:
Payables:
Investment securities purchased.......................................................................... 8,850,043
Capital stock reacquired................................................................................. 820,647
Accrued expenses........................................................................................... 2,605,495
---------------
Total liabilities.................................................................................. 12,276,185
---------------
NET ASSETS................................................................................................... $ 2,557,534,418
===============
Net assets consist of:
Undistributed net investment income........................................................................ $ 8,982,377
Unrealized appreciation on investments..................................................................... 583,387,440
Accumulated net realized gains............................................................................. 33,165,811
Paid-in capital............................................................................................ 1,931,998,790
---------------
Net assets......................................................................................... $ 2,557,534,418
===============
CLASS A SHARES
Net assets................................................................................................. $ 2,151,444,446
Shares outstanding......................................................................................... 141,179,185
Net asset value and redemption price per share (net assets/shares outstanding)............................. $ 15.24
========
Maximum offering price per share (100/95.25 of 15.24)...................................................... $ 16.00
========
CLASS B SHARES
Net assets................................................................................................. $ 288,835,279
Shares outstanding......................................................................................... 19,151,060
Net asset value and redemption price per share (net assets/shares outstanding)............................. $ 15.08
========
CLASS C SHARES
Net assets................................................................................................. $ 117,254,693
Shares outstanding......................................................................................... 7,752,474
Net asset value and redemption price per share (net assets/shares outstanding)............................. $ 15.12
========
</TABLE>
See Notes to Financial Statements.
<TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF OPERATIONS
For the year ended July 31, 1996
===============================================================================================================================
<CAPTION>
Investment Income:
<S> <C> <C>
Income:
Dividends................................................................................................ $ 32,859,200
Interest................................................................................................. 12,893,630
---------------
Total income....................................................................................... 45,752,830
Expenses:
Management fees (Note 3).............................................................. $ 12,351,657
Custodian fees........................................................................ 354,585
Transfer agent fees................................................................... 1,807,228
Audit fees............................................................................ 42,805
Legal fees............................................................................ 133,971
Accounting fees (Note 3).............................................................. 65,004
Reports to shareholders............................................................... 185,503
Directors fees and expenses........................................................... 123,010
Registration and filing fees.......................................................... 227,558
Miscellaneous1........................................................................ 42,361
Service fees paid under distribution plan (Note 4)
Class A............................................................................. 2,614,412
Class B............................................................................. 1,561,856
Class C............................................................................. 570,693
---------------
Total expenses................................................................... 20,180,643
---------------
Net investment income.......................................................... 25,572,187
---------------
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions............................................................. 138,061,957
Net increase in unrealized appreciation of investments during the year.................................... 65,657,908
---------------
Net realized and unrealized gain on investments............................................................ 203,719,865
---------------
Net increase in net assets resulting from operations....................................................... $ 229,292,052
===============
</TABLE>
See Notes to Financial Statements.
<TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================================================================
<CAPTION>
For the years ended
July 31,
-------------------
1996 1995
---- ----
OPERATIONS:
<S> <C> <C>
Net investment income................................................................... $ 25,572,187 $ 13,632,172
Net realized gain from investment transactions.......................................... 138,061,957 41,388,723
Increase in unrealized appreciation of investments...................................... 65,657,908 277,238,879
-------------- --------------
Net increase in net assets resulting
from operations..................................................................... 229,292,052 332,259,774
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A ($0.15 and $0.12 per share, respectively)..................................... (17,109,868) (11,143,629)
Realized gains from investment transactions:
Class A ($1.01 and $0.45 per share, respectively)..................................... (115,206,444) (41,788,608)
Class B ($1.01 per share)............................................................. (6,379,613) _
Class C ($1.01 per share)............................................................. (2,015,166) _
CAPITAL SHARE TRANSACTIONS (NOTE 5)....................................................... 822,481,849 290,365,315
-------------- --------------
Total increase in net assets.......................................................... 911,062,810 569,692,852
NET ASSETS:
Beginning of year....................................................................... 1,646,471,608 1,076,778,756
-------------- --------------
End of year (including undistributed net income of $8,982,377
and $2,488,543, respectively)......................................................... $2,557,534,418 $1,646,471,608
============== ==============
</TABLE>
See Notes to Financial Statements.
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1996
==============================================================================
NOTE 1 - 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 Fund's investment objective is growth of capital. The Fund invests
primarily in common stocks. There is no assurance that the investment
objective of the Fund will be achieved. The Fund invests in securities
subject to the risk of price fluctuations reflecting both market
evaluations of the businesses involved and general changes in the equity
markets. The Fund may invest in securities of foreign issuers and hedge
currency fluctuation risks related thereto. On December 1, 1994 the Fund
commenced the offering of shares in three classes, Class A, Class B and
Class C. The Class A shares are sold with a front-end sales charge and the
Class B and Class C shares are sold at net asset value and may be subject
to a contingent deferred sales charge upon redemption. All classes have
identical rights with respect to voting (exclusive of each Class's
distribution arrangement), liquidation and distributions. The following is
a summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.
Security Valuation _ Securities traded on national securities exchanges
are valued at the published last sales prices on the exchange, or, in the
absence of recorded sales, at the average of closing bid and asked prices
on such exchange. Over-the-counter securities are valued at the average of
closing bid and asked prices. If no quotations are available, the fair value
of the investment is determined by or at the direction of the Board of
Directors. Investments in short-term securities (maturing in sixty days or
less) are valued at amortized cost unless the Board of Directors
determines that such cost is not a fair value.
Federal Income Taxes _ It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its taxable
income to shareholders. Therefore, no provision for federal income tax is
required.
Securities Transactions and Related Investment Income _ Securities
transactions are accounted for on the trade date (date the order to buy or
sell is executed) with gain or loss on the sale of securities being
determined based upon identified cost. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
Dividends and Distributions to Shareholders _ Dividends and distributions
to shareholders are recorded on the ex-dividend date.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the year ended July 31, 1996, were $ 856,014,372 and
$364,872,689, respectively.
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Advisory fees are paid monthly to the investment adviser at the
annual rate of .75% of the average daily net assets for the first $250
million, .65% of the average net assets on the next $250 million, and .55%
of the av-erage daily net assets in excess of $500 million. Effective
December 1, 1996, additional breakpoints have been added as follows: .54%
of the average net assets on assets between $3 billion and $4 billion, .53%
of the
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1996
==============================================================================
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - Continued
next $1 billion of average net assets, .52% of the next $1 billion of
average net assets, .51% of the next $1 billion of average net assets and
.50% of average net assets in excess of $7 billion. Pursuant to applicable
state Blue Sky requirements, the adviser will reimburse expenses
(including the advisory fee but excluding interest, taxes, brokerage fees
and maintenance fees paid under any Rule 12b-1 Distribution Plan) in
excess of the most restrictive applicable expense limitation prescribed by
any statute or regulatory authority of any jurisdiction in which the Fund's
shares are qualified for offer and sale. The Adviser believes that the
most restrictive expense limitations presently applicable are 2 1/2% for
the first $30 million of average net assets, 2% for the next $70 million of
average net assets and 1 1/2% for any additional average net assets.
Davis Selected Advisers, L.P. is paid for registering Fund shares for sale
in various states. The fee for the year ended July 31, 1996 amounted to
$12,000. Davis Selected Advisers, L.P. is paid for certain transfer agent
services. The fee for the year ended July 31, 1996 amounted to $141,804.
Davis Selected Advisers, L.P. is also paid for certain accounting services.
The fee amounted to $65,004 for the year ended July 31, 1996. Certain
directors and the officers of the Fund are also directors and officers of
the general partner of the Adviser.
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales
charge and are redeemed at net asset value (without a contingent deferred
sales charge).
During the year ended July 31, 1996, the Fund's Underwriter, Davis
Selected Advisers, L.P., received $11,092,007 from commissions earned on
sales of Class A shares of the Fund of which $1,748,326 was retained by
the Underwriter and the remaining $9,343,681 was reallowed to
investment dealers. Davis Selected Advisers, L.P. paid the costs of
prospectuses in excess of those required to be filed as part of the Fund's
registration statement, sales literature and other expenses assumed or
incurred by it in connection with such sales.
The Underwriter is reimbursed for amounts paid to dealers as a
maintenance fee with respect to Class A shares sold by dealers and
remaining outstanding during the period. The maintenance fee is paid at
the annual rate of 1/4 of 1% of the average net assets maintained by the
responsible dealers. The Underwriter is not reimbursed for accounts in
which the Underwriter pays no service fees to other firms. The
maintenance fee for Class A shares of the Fund for the year ended July
31, 1996 was $2,614,412.
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are
redeemed at net asset value less a contingent deferred sales charge if
redeemed within six years of purchase.
The Fund pays the Distributor a 4% commission on the proceeds from
the sale of the Fund's Class B shares and the Distributor reallows 4% to
the qualified dealer responsible for the sale of the shares. A rule
implemented by the National Association of Securities Dealers, Inc.,
("NASD") limits the percentage of the Fund's annual average net assets
attributable to Class B shares which may be used to reimburse the
Distributor.
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1996
==============================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - Continued
CLASS B SHARES - Continued
The limit is 1%, of which 0.75% may be used to pay distribution expenses
and 0.25% may be used to pay shareholder service fees. The NASD rule
also limits the aggregate amount the Fund may pay for distribution to
6.25% of gross Fund sales since inception of the Rule 12b-1 plan plus
interest at 1% over the prime rate on unpaid amounts. The Distributor
intends to seek full payment (plus interest at prime plus 1%) of
distribution charges that exceed the 1% annual limit in some future period
or periods when the plan limits have not been reached.
During the year ended July 31, 1996, Class B shares of the Fund made
distribution plan payments which included commissions of $1,172,979 and
maintenance fees of $388,877.
Commissions earned by the Distributor during the year ended July
31, 1996 on the sale of Class B shares of the Fund amounted to $9,924,119
of which $9,651,635 was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the
Fund in the amount of $10,423,468, representing the cumulative
commissions earned by the Distributor on the sale of the Fund's Class B
shares reduced by cumulative commissions paid by the Fund and
cumulative contingent deferred sales charge paid by redeeming
shareholders. The Fund has no contractual obligation to pay any such
distribution charges and the amount, if any, timing and condition of such
payment are solely within the discretion of the Directors who are not
interested persons of the Fund or the Distributor.
A contingent deferred sales charge is imposed upon redemption of
certain Class B shares of the Fund within six years of the original
purchase. The charge is a declining percentage starting at 4% of the
lesser of net asset value of the shares redeemed or the total cost of such
shares. During the year ended July 31, 1996 the Distributor received
$150,039 in contingent deferred sales charges from Class B shares of the
Fund.
CLASS C SHARES
Class C shares of the Fund are sold at net asset value and are
redeemed at net asset value less a contingent deferred sales charge of 1%
if redeemed within one year of purchase.
The Fund pays the Distributor 1% of the Fund's annual average net
assets attributable to Class C shares, of which 0.75% may be used to pay
distribution expenses and 0.25% may be used to pay shareholder service
fees.
During the year ended July 31, 1996, Class C shares of the Fund made
distribution payments of $570,693.
During year ended July 31, 1996, the Distributor received $30,881 in
contingent deferred sales charges from Class C shares of the Fund.
NOTE 5 - CAPITAL STOCK
At July 31, 1996, there were 1,000,000,000 shares of capital stock
($0.05 par value per share) authorized.
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1996
==============================================================================
NOTE 5 - CAPITAL STOCK - Continued
<TABLE>
Transactions in capital stock were as follows:
Class A
- -------
Year Ended Year Ended
July 31, 1996 July 31, 1995
------------- -------------
<CAPTION>
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed............................... 38,287,694 $ 576,914,471 30,818,877 $ 383,332,884
Shares issued in reinvestment ofdistributions... 6,967,930 100,617,055 3,473,189 38,136,033
----------- ------------- ----------- -------------
45,255,624 677,531,526 34,292,066 421,468,917
Shares reacquired............................... (13,593,507) (204,699,701) (14,245,169) (177,467,140)
----------- ------------- ----------- -------------
Net increase.................................. 31,662,117 $ 472,831,825 20,046,897 $ 244,001,777
=========== ============= =========== =============
</TABLE>
<TABLE>
Class B
- ------- December 1, 1994
(Commencement of
Year Ended operations) through
July 31, 1994 July 31, 1995
-------------- -------------------
<CAPTION>
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed................................ 16,973,142 $ 254,230,001 2,906,812 $ 37,543,414
Shares issued in reinvestment of distributions... 311,026 4,472,559 - -
---------- ------------- --------- ------------
17,284,168 258,702,560 2,906,812 37,543,414
Shares reacquired................................ (895,972) (13,453,459) (143,948) (1,996,206)
---------- ------------- --------- ------------
Net increase................................... 16,388,196 $ 245,249,101 2,762,864 $ 35,547,208
========== ============= ========= ============
</TABLE>
<TABLE>
Class C
- --------
December 20, 1994
(Commencement of
Year Ended operations) through
July 31, 1996 July 31, 1995
--------------------- -----------------------
<CAPTION>
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed............................... 7,270,790 $ 109,392,876 813,212 $ 10,849,274
Shares issued in reinvestment of distributions.. 97,098 1,400,156 _ _
--------- ------------- ------- ------------
7,367,888 110,793,032 813,212 10,849,274
Shares reacquired............................... (426,267) (6,392,109) (2,359) (32,944)
--------- ------------- ------- ------------
Net increase.................................. 6,941,621 $ 104,400,923 810,853 $ 10,816,330
========= ============= ======= ============
</TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
CLASS A
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
Year ended July 31,
------------------------------------------------
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 14.56 $ 12.04 $ 12.08 $ 10.70 $ 9.85
------- ------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income....................... .20 .14 .16 .10 .14
Net Gains on Securities
(both realized and unrealized)............ 1.64 2.95 .54 1.98 1.57
------- ------- ------- ------- -------
Total From Investment Operations........ 1.84 3.09 .70 2.08 1.71
Less Distributions
- ------------------
Dividends (from net investment income)...... (.15) (.12) (.16) (.10) (.21)
Distributions From Realized Capital Gains... (1.01) (.45) (.58) (.59) (.55)
Distributions From Paid In Capital.......... _ _ _ (.01) (.10)
------- ------- ------- ------- -------
Total Distributions..................... (1.16) (.57) (.74) (.70) (.86)
------- ------- ------- ------- -------
Net Asset Value, End of Period............... $ 15.24 $ 14.56 $ 12.04 $ 12.08 $ 10.70
======= ======= ======= ======= =======
Total Return<F1>.............................. 13.04% 27.21% 5.99% 20.20% 18.62%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)............................... 2,151,444 1,594,885 1,076,779 738,698 494,179
Ratio of Expenses to Average Net
Assets...................................... 87% .90% .87% .89% .91%
Ratio of Net Income to Average Net
Assets...................................... 1.30% 1.11% 1.19% .85% 1.36%
Portfolio Turnover Rate..................... 19% 15% 13% 24% 26%
<FN>
<F1> Sales charges are not reflected in calculation.
</FN>
</TABLE>
<TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
================================================================================================================
Financial Highlights for a share of capital stock outstanding throughout each period.
_____________CLASS B______________ ______________CLASS C____________
<CAPTION>
December 1, 1994 December 20, 1994
(Commencement (Commencement
Year of operations ) Year of operations)
ended through ended through
7/31/96 7/31/95 7/31/96 7/31/95
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 14.43 $ 10.88 $ 14.47 $ 11.16
------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)........... .04 (.01) .04 (.01)
Net Gains on Securities
(both realized and unrealized)....... 1.62 3.56 1.62 3.32
------- ------- ------- -------
Total From Investment Operations..... 1.66 3.55 1.66 3.31
Less Distributions
- ------------------
Distributions From Realized Capital
Gains................................ (1.01) _ (1.01) _
------- ------- ------- -------
Total Distributions.................. (1.01) _ (1.01) _
------- ------- ------- -------
Net Asset Value, End of Period.......... $ 15.08 $ 14.43 $ 15.12 $ 14.47
======= ======= ======= =======
Total Return<F1>......................... 11.81% 26.07%<F2> 11.78% 26.42%<F2>
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000omitted)......................... 288,835 39,857 117,255 11,729
Ratio of Expenses to Average
NetAssets............................ 1.73% 1.78%<F2> 1.73% 1.78%<F2>
Ratio of Net Income to Average
NetAssets............................ .44% .23%<F2> .44% .23%<F2>
Portfolio Turnover Rate................ 19% 15% 19% 15%
<FN>
<F1> Contingent deferred sales charges are not reflected in calculation.
<F2> Annualized.
</FN>
</TABLE>
DAVIS NEW YORK VENTURE FUND, INC.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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To the Shareholders and Board of Directors
of Davis New York Venture Fund, Inc.
We have audited the accompanying statement of assets and
liabilities of Davis New York Venture Fund, Inc., including the schedule of
portfolio investments, as of July 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these fi-nancial 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 confirmation of securities owned as of July 31, 1996, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and signifi-cant 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 Davis New York Venture Fund, Inc. as of July 31, 1996, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
August 29, 1996
DAVIS NEW YORK
VENTURE FUND, INC.
124 East Marcy Street, Santa Fe, New Mexico 87501
Directors Officers
Wesley E. Bass, Jr. Jeremy H. Biggs
Jeremy H. Biggs Chairman
Marc P. Blum Shelby M. C. Davis
Shelby M.C. Davis President
Eugene M. Feinblatt Carl R. Luff
Jerry D. Geist Vice President, Treasurer
D. James Guzy & Assistant Secretary
G. Bernard Hamilton Raymond O. Padilla
LeRoy E. Hoffberger Vice President, Secretary
Laurence W. Levine & Assistant Treasurer
Martin H. Proyect Carolyn H. Spolidoro
Christian R. Sonne Vice President
Edwin R. Werner Andrew A. Davis
Vice President
Christopher C. Davis
Vice President
Eileen R. Street
Assistant Treasurer
& Assistant Secretary
Investment Adviser & Distributor
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
Transfer Agent & Custodian
State Street Bank and Trust Company
c/o The Davis Funds
P.O. Box 8406
Boston, Massachusetts 02266-8406
Counsel
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
Auditors
Tait, Weller & Baker
Two Penn Center Plaza, Suite 700
Philadelphia, Pennsylvania 19102-1707
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For more information about Davis New York Venture Fund, Inc. including
management fees, charges and expenses, see the current prospectus which
must precede or accompany this report.
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9609-150M DNYV80
