NICHOLAS FUND, INC.
May 20, 1996
Report to Shareholders:
Nicholas Fund completed its fiscal year ended March 31, 1996 with a
+32.38% total return with distributions reinvested. In comparison, the
Standard & Poor's 500 increased +32.11% and NASDAQ OTC was up +34.77% for the
same period. The Fund produced a +6.30% return for the calendar quarter ended
March 31. This result compared to +5.37% and +4.68% for the Standard & Poor's
500 and NASDAQ OTC, respectively. The Fund's cash position was 2.7% at fiscal
year-end. As our investment strategy stresses patience, we would like to
emphasize long-term results. Shown below are results for various time periods
ended March 31, 1996.
<TABLE>
AVERAGE ANNUAL TOTAL RETURN*
_____________________________________________
JULY 14, 1969**
5 YEARS 10 YEARS 15 YEARS 26.7 YEARS
_______ ________ _______ _____________
<S> <C> <C> <C> <C>
Nicholas Fund (Distributions Reinvested) +14.52% +12.85% +15.58% +13.49%
NASDAQ OTC Composite (Excludes Income) +17.96% +11.38% +11.68% N/A
Standard & Poor's 500 (Income Reinvested) +14.65% +13.97% +15.11% +11.59%
Consumer Price Index +2.8% +3.6% +3.8% +5.6%
Ending value of $10,000 invested in
Nicholas Fund (Distributions Reinvested) $19,697 $33,505 $87,802 $293,836
</TABLE>
* Total returns are historical and include change in share price and
reinvestment of dividend and capital gain distributions. Past performance is
no guarantee of future results. Principal value and return will fluctuate so
an investment, when redeemed, may be worth more or less than original cost.
** Date of initial public offering. Starting time period for Standard
& Poor's 500 and the Consumer Price Index was June 30, 1969.
While not ignoring the obvious investment concerns, i.e., historically
high stock valuations, higher interest rates and an uncertain economic outlook,
management continues to concentrate on stock selection. The positive forces in
today's investment market, a plethora of money chasing marketable securities
and reasonably strong profits, are obviously carrying the day. We are finding
values in technology issues, selected growth stocks and individual common
stocks where short-term corrections produce opportunity. We are also
continuing to consolidate our list. Management would like to thank all
shareholders for the confidence they have placed in the long-term investment
philosophy of the Fund. We appreciate your patience and support.
Sincerely,
/s/ Albert O. Nicholas
Albert O. Nicholas
President
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1996
<TABLE>
<CAPTION>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
<C> <C> <C>
COMMON STOCKS - 96.6%
AGRICULTURE - 0.5%
100,000 Monsanto Company $ 15,350,000
30,000 Potash Corporation
of Saskatchewan Inc. 1,875,000
_____________
17,225,000
_____________
BANKS AND FINANCE - 19.8%
272,000 Edwards (A.G.), Inc. 6,766,000
1,505,300 Federal Home Loan Mortgage Corporation 128,326,825
4,500,000 Federal National Mortgage Association 143,437,500
1,097,250 Fifth Third Bancorp 63,640,500
574,700 Firstar Corporation 25,717,825
336,900 First Bank System, Inc. 20,087,663
220,000 Litchfield Financial Corporation 3,135,000
2,084,000 Marshall & Ilsley Corporation 54,444,500
1,735,350 Mercury Finance Company 24,511,819
1,000,000 Norwest Corporation 36,750,000
465,750 Regions Financial Corporation 20,434,781
645,000 Security Capital Corporation (WI) + 37,410,000
1,050,000 Travelers Group Inc. 69,300,000
350,000 Wells Fargo & Company 91,350,000
_____________
725,312,413
_____________
BROADCASTING AND COMMUNICATIONS - 0.4%
301,600 Pulitzer Publishing Company 15,683,200
_____________
BUSINESS SERVICES - 3.1%
686,000 Cintas Corporation 34,300,000
393,778 First Data Corporation 27,761,349
590,000 Micro Warehouse, Inc. * 24,558,750
445,000 Wallace Computer Services, Inc. 25,976,875
_____________
112,596,974
_____________
CONSUMER PRODUCTS AND SERVICES - 11.1%
450,000 Amway Asia Pacific Ltd. 15,018,750
889,750 Clayton Homes, Inc. 18,573,531
1,200,000 Cooper Tire & Rubber Company 30,900,000
601,700 CSS Industries, Inc. * + 13,387,825
500,000 Eastman Kodak Company 35,500,000
804,200 Gillette Company (The) 41,617,350
145,000 Hewlett-Packard Company 13,630,000
<PAGE>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
CONSUMER PRODUCTS AND SERVICES - 11.1%
(CONTINUED)
741,500 Hillenbrand Industries, Inc. $ 25,211,000
755,000 Leggett & Platt, Incorporated 17,270,625
460,350 Monro Muffler Brake, Inc. * + 7,365,600
565,000 Motorola, Inc. 29,945,000
700,000 Newell Co. 18,725,000
513,300 NIKE, Inc. - Class B 41,705,625
846,300 Valspar Corporation (The) 38,400,863
898,400 Walt Disney Company (The) 57,385,300
_____________
404,636,469
_____________
FOOD AND BEVERAGE - 4.5%
700,000 Coca-Cola Company (The) 57,837,500
1,683,000 International Dairy Queen, Inc.
- Class A * + 37,052,928
720,000 International Dairy Queen, Inc.
- Class B * + 15,480,000
500,000 McDonald's Corporation 24,000,000
1,650,000 Wendy's International, Inc. 29,906,250
_____________
164,276,678
_____________
HEALTH CARE PRODUCTS - 8.2%
1,090,000 Abbott Laboratories 44,417,500
234,000 American Home Products Corporation * 25,359,750
730,000 Amgen Inc. * 42,431,250
655,900 Elan Corporation PLC * 42,141,575
642,800 Forest Laboratories, Inc. * 31,336,500
200,000 Medtronic, Inc. 11,925,000
975,000 Pfizer Inc 65,325,000
770,000 Stryker Corporation 37,874,760
_____________
300,811,335
_____________
HEALTH CARE SERVICES - 11.8%
1,097,500 Apria Healthcare Group, Inc. * 34,845,625
850,000 Cardinal Health, Inc. 54,612,500
910,000 Columbia/HCA Healthcare Corporation 52,552,500
50,000 Health Care and Retirement
Corporation * 1,887,500
701,300 Health Management Associates, Inc.
- Class A * 24,545,500
2,155,900 Magellan Health Services Inc. * + 48,507,750
<PAGE>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
COMMON STOCKS - 96.6% (Continued)
HEALTH CARE SERVICES- 11.8% (CONTINUED)
424,500 PacifiCare Health Systems, Inc.
- Class B * $ 36,188,625
1,733,000 Quorum Health Group, Inc. * 40,942,125
800,000 U.S. Healthcare, Inc. 36,700,000
1,657,905 Vencor,Inc. * 57,197,722
1,500,000 VIVRA Incorporated * 43,125,000
_____________
431,104,847
_____________
INDUSTRIAL PRODUCTS AND SERVICES - 11.1%
1,938,000 General Motors Corporation - Class H 122,578,500
420,000 Intel Corporation 23,887,500
262,500 Lockheed Martin Corporation 19,917,187
550,000 Marshall Industries * 16,775,000
1,373,000 Stant Corporation + 16,476,000
500,000 Texas Instruments Incorporated 25,437,500
878,750 Thermo Electron Corporation * 52,285,625
2,027,000 Tyco International LTD. 72,465,250
2,017,000 Watts Industries, Inc. 40,087,875
742,500 Wausau Paper Mills Company 17,077,500
_____________
406,987,937
_____________
INSURANCE - 11.9%
527,250 AFLAC Incorporated 16,476,563
283,300 AMBAC Inc. 13,633,813
239,000 Chubb Corporation (The) 22,436,125
577,500 Cincinnati Financial Corporation 36,599,062
888,777 Foremost Corporation of America + 48,882,735
100,000 General Re Corporation 14,575,000
2,430,000 Mercury General Corporation + 101,148,750
750,000 MGIC Investment Corporation 40,875,000
531,600 Mutual Risk Management Ltd. 21,994,950
1,518,500 Protective Life Corporation + 51,249,375
1,100,000 SunAmerica, Inc. 55,412,500
325,000 TIG Holdings, Inc. 10,562,500
_____________
433,846,373
_____________
INVESTMENT MANAGEMENT - 1.1%
404,700 Franklin Resources, Inc. 23,067,900
392,100 United Asset Management Corporation 18,183,638
_____________
41,251,538
_____________
<PAGE>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
REAL ESTATE - 0.1%
115,000 Meditrust $ 3,895,625
_____________
RETAIL TRADE - 9.9%
330,000 Arbor Drugs, Inc. 6,930,000
1,378,600 AutoZone, Inc. * 46,700,075
2,700,000 Circuit City Stores, Inc. 80,662,500
1,404,000 Consolidated Stores Corporation * 47,034,000
3,000,000 Heilig-Meyers Company + 61,875,000
800,000 Home Depot, Inc. (The) 38,200,000
649,800 Kohl's Corporation * 41,181,075
947,600 Office Depot, Inc. * 18,596,650
600,000 Walgreen Co. 19,575,000
_____________
360,754,300
_____________
TRANSPORTATION - 0.8%
635,000 American Freightways Corporation * 8,175,625
115,000 Arnold Industries, Inc. 1,811,250
723,393 Heartland Express, Inc. * 18,356,097
_____________
28,342,972
_____________
MISCELLANEOUS - 2.3%
2,000 Berkshire Hathaway Inc. * 67,700,000
629,000 Leucadia National Corporation 15,646,375
_____________
83,346,375
_____________
TOTAL COMMON STOCKS
(cost $2,100,827,698) 3,530,072,036
_____________
CONVERTIBLE BONDS - 0.7%
$10,290,000 National HealthCare L.P.
6.00%, 7/1/00
(cost $19,756,800) 25,197,638
_____________
SHORT-TERM INVESTMENTS - 2.2%
COMMERCIAL PAPER - 1.9%
6,600,000 Harnischfeger Industries, Inc.
5.40%, due April 1, 1996 6,600,000
5,000,000 Schreiber Foods, Inc.
5.40%, due April 3, 1996 4,998,500
5,000,000 Payco American Corporation
5.45%, due April 8, 1996 4,994,701
5,000,000 A.O. Smith Corporation
5.40%, due April 10, 1996 4,993,250
<PAGE>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
SHORT-TERM INVESTMENTS - 2.2% (CONTINUED)
COMMERCIAL PAPER - 1.9% (CONTINUED)
$ 5,500,000 Fiserv, Inc.
5.40%, due April 12, 1996 $ 5,490,925
3,000,000 Manpower, Inc.
5.38%, due April 15, 1996 2,993,723
10,000,000 A.O. Smith Corporation
5.40%, due April 17, 1996 9,976,000
5,000,000 A.O. Smith Corporation
5.40%, due April 19, 1996 4,986,500
3,500,000 Payco American Corporation
5.50%, due April 19, 1996 3,490,375
5,000,000 A.O. Smith Corporation
5.45%, due April 23, 1996 4,983,347
5,000,000 Schreiber Foods, Inc.
5.45%, due April 25, 1996 4,981,833
3,000,000 Heller Financial, Inc.
5.57%, due April 29, 1996 2,987,003
6,000,000 Quad/Graphics, Inc.
5.60%, due April 29, 1996 5,973,867
2,500,000 NEC Industries Inc.
5.72%, due May 13, 1996 2,483,317
_____________
69,933,341
_____________
<PAGE>
Shares or Quoted
Principal Market
Amount Value
_________ __________
(Note 1 (a))
VARIABLE DEMAND NOTES - 0.3%
$10,731,450 Sara Lee Corporation
5.94%, due April 1, 1996 $ 10,731,450
1,365,500 Warner-Lambert Company
5.85%, due April 1, 1996 1,365,500
_____________
12,096,950
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $81,751,929) 82,030,291
_____________
TOTAL INVESTMENTS 3,637,299,965
_____________
CASH AND RECEIVABLES, NET
OF LIABILITIES - 0.5% 17,999,666
_____________
TOTAL NET ASSETS (Basis of
percentages disclosed above) $3,655,299,631
_____________
_____________
</TABLE>
+ This company is affiliated with the Fund; that is, the Fund holds 5% or more
of its outstanding voting securities. Such companies are defined in Section
2(a)(3), of the Investment Company Act of 1940. (Note 5)
* Nondividend paying security.
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments in securities at market value (Note 1 (a)) -
Nonaffiliated issuers (cost $1,972,868,313) - see
accompanying schedule of investments $3,198,464,002
Affiliated issuers (cost $229,468,114) - see accompanying
schedule of investments (Note 5) 438,835,963
_____________
Total investments 3,637,299,965
_____________
Cash 694,055
Receivables -
Dividends and interest 2,336,103
Investment securities sold 24,046,316
_____________
Total receivables 26,382,419
_____________
Total assets 3,664,376,439
_____________
LIABILITIES:
Payables -
Investment securities purchased 6,437,645
Management fee (Note 2) 2,011,885
Other payables and accrued expenses 627,278
_____________
Total liabilities 9,076,808
_____________
Total net assets $3,655,299,631
_____________
_____________
NET ASSETS CONSIST OF:
Fund shares issued and outstanding $2,067,274,359
Net unrealized appreciation on investments (Note 3) 1,434,685,176
Accumulated undistributed net realized gains on investments 147,600,125
Accumulated undistributed net investment income 5,739,971
_____________
$3,655,299,631
_____________
_____________
NET ASSET VALUE PER SHARE ($.50 par value, 200,000,000 shares
authorized) offering price and redemption price
($3,655,299,631 ./. 57,284,323 shares outstanding) $63.81
_____
_____
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<TABLE>
<S> <C>
INCOME:
Dividends -
Nonaffiliated issuers $ 39,882,507
Affiliated issuers (Note 5) 4,860,852
Interest 8,430,055
Other 63,266
____________
53,236,680
____________
EXPENSES:
Management fee (Note 2) 21,433,970
Transfer agent fees 1,951,458
Postage 394,917
Custodian fees 281,305
Printing 163,682
Telephone 67,679
Registration fees 57,394
Legal fees 35,429
Audit and tax consulting fees 23,000
Insurance 22,970
Directors' fees 15,177
Other operating expenses 3,389
____________
24,450,370
____________
Net investment income 28,786,310
____________
NET REALIZED GAINS ON INVESTMENTS (Note 1 (b)):
Nonaffiliated issuers 309,710,018
Affiliated issuers (Note 5) 731,918
____________
310,441,936
____________
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 585,991,652
____________
Net gains on investments 896,433,588
____________
Net increase in net assets resulting from operations $925,219,898
____________
____________
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
_____________ _____________
<S> <C> <C>
OPERATIONS:
Net investment income $ 28,786,310 $ 39,256,375
Net realized gains on investments (Note 1 (b)) 310,441,936 148,604,119
Net increase in unrealized appreciation on
investments 585,991,652 114,302,325
_____________ _____________
Net increase in net assets resulting
from operations 925,219,898 302,162,819
_____________ _____________
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.5650 and $0.7070 per share, respectively) (31,690,147) (40,135,350)
Distributions from net realized gains on
investment transactions ($4.0945 and $3.317
per share, respectively) (228,973,671) (188,467,392)
_____________ _____________
Total distributions (260,663,818) (228,602,742)
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (3,493,644 and 3,921,537
shares, respectively) 204,221,865 198,203,207
Net asset value of shares issued in distributions
from net investment income and net realized gains
(4,323,439 and 4,478,750 shares, respectively) 245,904,717 216,305,903
Cost of shares redeemed (8,069,427 and 8,417,904
shares, respectively) (463,785,946) (424,829,482)
_____________ _____________
Decrease in net assets derived from capital
share transactions (13,659,364) (10,320,372)
_____________ _____________
Total increase in net assets 650,896,716 63,239,705
_____________ _____________
NET ASSETS, at the beginning of the year (including
undistributed net investment income of $8,643,808 and
$9,522,783, respectively) 3,004,402,915 2,941,163,210
_____________ _____________
NET ASSETS, at the end of the year (including
undistributed net investment income of $5,739,971
and $8,643,808, respectively) $3,655,299,631 $3,004,402,915
_____________ _____________
_____________ _____________
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
_______________________________________________________________________________________
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $52.22 $51.10 $52.91 $49.68 $42.99 $37.72 $35.27 $32.15 $39.94 $35.26
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .57 .69 .74 .75 .70 .80 .96 .97 1.07 1.03
Net gains or (losses) on securities
(realized and unrealized) 15.68 4.46 (.68) 5.20 7.49 5.48 3.46 3.63 (2.99) 4.72
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total from investment operations 16.25 5.15 .06 5.95 8.19 6.28 4.42 4.60 (1.92) 5.75
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
LESS DISTRIBUTIONS:
Dividends (from net
investment income) (.57) (.71) (.82) (.68) (.68) (.79) (.92) (1.03) (1.84) (.88)
Distributions (from capital gains) (4.09) (3.32) (1.05) (2.04) (.82) (.22) (1.05) (.45) (4.03) (.19)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total distributions (4.66) (4.03) (1.87) (2.72) (1.50) (1.01) (1.97) (1.48) (5.87) (1.07)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
NET ASSET VALUE, END OF YEAR $63.81 $52.22 $51.10 $52.91 $49.68 $42.99 $37.72 $35.27 $32.15 $39.94
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
TOTAL RETURN 32.38% 10.88% 0.04% 12.41% 19.33% 17.13% 12.55% 14.81% (3.74% 16.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (millions) $3,655.3 $3,004.4 $2,941.2 $3,013.4 $2,234.1 $1,642.8 $1,389.5 $1,172.3 $1,117.8 $1,299.0
Ratio of expenses to average net assets .74% .77% .78% .76% .78% .81% .82% .86% .86% .86%
Ratio of net investment income
to average net assets .87% 1.34% 1.40% 1.53% 1.60% 2.17% 2.56% 2.84% 3.04% 3.13%
Portfolio turnover rate 25.70% 29.82% 33.39% 10.20% 14.58% 21.85% 21.31% 24.03% 31.63% 27.29%
Average commission rate paid by the
Fund on portfolio investment
transactions* $0.0492 -- -- -- -- -- -- -- -- --
</TABLE>
*Disclosure of this rate is required by the Securities and Exchange Commission
on a prospective basis beginning with the Fund's 1996 fiscal year end.
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
The Fund is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended. The
primary objective of the Fund is capital appreciation in which income is
a secondary consideration. To achieve its objective, the Fund invests in
a diversified list of common stocks having growth potential. The
following is a summary of the significant accounting policies of Nicholas
Fund, Inc. (the "Fund"):
(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which
the issue is traded, or if no sale is reported, the latest bid price.
Variable demand notes are valued at cost which approximates market
value. Commercial paper is stated at market value with the resultant
difference between market value and original purchase price being
recorded as interest income. Investment transactions are recorded no
later than the first business day after the trade date. Cost
amounts, as reported on the schedule of investments and the statement
of assets and liabilities, are the same for Federal income tax
purposes.
(b) Net realized gains and losses on common stocks and bonds were
computed on the basis of specific certificates.
(c) Provision has not been made for Federal income taxes or excise taxes
since the Fund has elected to be taxed as a "regulated investment
company" and intends to distribute substantially all taxable income
to its shareholders and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies.
(d) Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Non-cash dividends, if any, are recorded at fair
market value on date of distribution.
(e) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from the estimates.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT -
The Fund has an agreement with Nicholas Company, Inc. (with whom certain
officers and directors of the Fund are affiliated) to serve as investment
adviser and manager. Under the terms of the agreement, a monthly fee is
paid to the investment adviser based on 1/16th of 1% (.75 of 1% on an
annual basis) of the average net asset value up to and including $50
million and 2/37th of 1% (.65 of 1% on an annual basis) of the average net
asset value in excess of $50 million. Also, the investment adviser may be
reimbursed for clerical and administrative services rendered by its
personnel. This advisory agreement is subject to an annual review by the
Directors of the Fund.
(3) NET UNREALIZED APPRECIATION -
Aggregate gross unrealized appreciation (depreciation) as of March 31,
1996, based on investment cost for Federal tax purposes is as follows:
Aggregate gross unrealized appreciation on investments $1,445,381,418
Aggregate gross unrealized depreciation on investments (10,696,242)
_____________
Net unrealized appreciation $1,434,685,176
_____________
_____________
(4) INVESTMENT TRANSACTIONS -
For the year ended March 31, 1996, the cost of purchases and the proceeds
from sales of investment securities, other than short-term obligations,
aggregated $810,389,544 and $945,648,182, respectively.
<PAGE>
(5) TRANSACTIONS WITH AFFILIATES -
Following is an analysis of fiscal 1996 transactions with "affiliated
companies" as defined by the Investment Company Act of 1940:
<TABLE>
<CAPTION>
AMOUNT OF
CAPITAL
AMOUNT OF GAINS (LOSSES)
SHARE ACTIVITY DIVIDENDS REALIZED
______________________________________________ CREDITED ON SALE
TO INCOME OF SHARES
BALANCE BALANCE IN FISCAL IN FISCAL
SECURITY NAME 3/31/95 PURCHASES SALES 3/31/96 1996 1996
____________ _________ _________ _________ _________ _________ ___________
<S> <C> <C> <C> <C> <C> <C>
CSS Industries, Inc. 497,400 104,300 -- 601,700 -- --
Foremost Corporation of America 572,277 316,500 -- 888,777 838,379 --
Heilig-Myers Company 2,069,000 931,000 -- 3,000,000 646,660 --
International Dairy Queen, Inc.
Class A 1,683,000 -- -- 1,683,000 -- --
Class B 720,000 -- -- 720,000 -- --
Magellan Health Services, Inc. (c) 1,650,000 505,900 -- 2,155,900 -- --
Mercury General Corporation 2,430,000 -- -- 2,430,000 2,041,200 --
Monro Muffler Brake, Inc. (b) 140,700 319,650 -- 460,350 -- --
Protective Life Corporation (b) 1,800,000 -- 281,500 1,518,500 1,029,670 5,108,028
Security Capital Corporation 275,500 369,500 -- 645,000 148,275 --
Stant Corporation 1,074,000 299,000 -- 1,373,000 104,020 --
Treadco, Inc. (a) 355,400 100,000 455,400 -- 52,648 (4,376,110)
_________ _________
$4,860,852 $ 731,918
_________ _________
_________ _________
</TABLE>
(a) As of March 31, 1996, the Fund is no longer affiliated with this company.
(b) The share activity has been adjusted to reflect a stock split/dividend.
(c) Name changed from Charter Medical Corporation.
<PAGE>
HISTORICAL RECORD (UNAUDITED)
<TABLE>
<CAPTION>
(ADJUSTED FOR TWO-FOR-ONE STOCK SPLIT JUNE 15, 1979)
NET NET INVESTMENT CAPITAL GAIN DOLLAR WEIGHTED GROWTH OF AN
ASSET VALUE INCOME DISTRIBUTIONS PRICE/EARNINGS INITIAL $10,000
PER SHARE PER SHARE PER SHARE RATIO** INVESTMENT***
__________ ______________ _____________ _______________ _______________
<S> <C> <C> <C> <C> <C>
July 14, 1969* $ 6.59 $ -- $ -- -- $ 10,000
March 31, 1986 35.26 0.575 0.610 15.8 times 87,699
March 31, 1987 39.94 0.882 0.187 16.3 102,386
March 31, 1988 32.15 1.840 4.034 14.1 98,557
March 31, 1989 35.27 1.025 0.451 13.2 113,155
March 31, 1990 37.72 0.924 1.054 14.9 127,360
March 31, 1991 42.99 0.790 0.225 16.9 149,179
March 31, 1992 49.68 0.679 0.824 19.4 178,015
March 31, 1993 52.91 0.679 2.042 18.5 200,098
March 31, 1994 51.10 0.8175 1.047 16.7 200,182
March 31, 1995 52.22 0.707 3.317 17.2 221,970
June 30, 1995 53.74 0.2200(a) 1.1610(a) 17.8 234,475
September 30, 1995 58.66 -- -- 18.9 255,942
December 31, 1995 60.03 0.3450(b) 2.9335(b) 19.9 276,429
March 31, 1996 63.81 -- -- 21.0 293,836
* Date of Initial Public Offering (a) Paid May 17, 1995 to shareholders of record May 12, 1995
** Based on latest 12 months accomplished earnings
*** Assuming reinvestment of all distributions (b) Paid December 31, 1995 to shareholders of record December 22, 1995.
</TABLE>
Range in quarter end price/earnings ratios since
December 31, 1974
High Low
____________ _____________
3/31/96 21.0 3/31/82 8.3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
of Nicholas Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
NICHOLAS FUND, INC. (a Maryland corporation), including the schedule of
investments, as of March 31, 1996, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the periods presented. These financial statements and financial highlights
are the responsibility of the Fund'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 confirmation of securities
owned as of March 31, 1996, by correspondence with the custodian and brokers.
As to securities purchased but not yet received, we requested confirmation from
brokers and, when replies were not received, we carried out other alternative
auditing procedures. 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
Nicholas Fund, Inc. as of March 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 the periods presented in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
April 24, 1996.
<PAGE>
AUTOMATIC INVESTMENT PLAN - AN UPDATE (UNAUDITED)
The Nicholas Family of Funds' AUTOMATIC INVESTMENT PLAN provides a simple
method to dollar cost average into the fund(s) of your choice.
Dollar cost averaging involves making equal systematic investments over an
extended time period. A fixed dollar investment will purchase more shares when
the market is low and fewer shares when the market is high. The automatic
investment plan is an excellent way for you to become a disciplined investor.
The following table illustrates what dollar cost averaging can achieve. Please
note that past performance is no guarantee of future results. Nicholas Company
recommends dollar cost averaging as a practical investment method. It should be
consistently applied for long periods (5-10 years or more) so that investments
are made through several market cycles. The table will be updated and appear in
future financial reports issued by the Nicholas Family of Funds.
Nicholas Fund
____________________
$1,000 initial investment on 7-14-69 3-31-86
$100 invested on the last day of each month
following the date of the initial
investment (in years) 26.7 10
Total cash invested $ 33,100 $13,000
Total capital gains reinvested $101,586 $ 4,464
Total dividends reinvested $ 55,614 $ 1,822
Total full shares owned 3/31/96 6,843 448
Total market value on 3/31/96 $436,667 $28,558
The results above assume purchase on the last day of the month for the
respective periods. The Nicholas Automatic Investment Plan actually invests on
the 20th of each month (or on the alternate date specified by the investor).
Total market value includes reinvestment of all distributions.
TOP TEN EQUITY HOLDINGS (UNAUDITED)
March 31, 1996*
______________
Federal National Mortgage Association 3.9%
Federal Home Loan Mortgage Corporation 3.5%
General Motors Corporation - Class H 3.4%
Mercury General Corporation 2.8%
Wells Fargo & Company 2.5%
Circuit City Stores, Inc. 2.2%
Tyco International LTD. 2.0%
Travelers Group Inc. 1.9%
Berkshire Hathaway Inc. 1.9%
Pfizer Inc 1.8%
* Percentage of total net assets.
<PAGE>
OFFICERS AND DIRECTORS
ALBERT O. NICHOLAS
President and Director
ROBERT H. BOCK
Director
MELVIN L. SCHULTZ
Director
RICHARD SEAMAN
Director
DAVID L. JOHNSON
Executive Vice President
THOMAS J. SAEGER
Executive Vice President and Secretary
DAVID O. NICHOLAS
Senior Vice President
LYNN S. NICHOLAS
Senior Vice President
CANDACE L. LESAK
Vice President
JEFFREY T. MAY
Vice President
CHERYL L. KING
Treasurer
CHRISTINA M. MOURADIAN
Assistant Treasurer
Custodian and Transfer Agent
FIRSTAR TRUST COMPANY
Milwaukee
(414) 276-0535
Counsel
DAVIS & KUELTHAU, S.C.
Milwaukee
Auditors
ARTHUR ANDERSEN LLP
Milwaukee
This report is submitted for the information of shareholders of the Fund. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
ANNUAL REPORT
NICHOLAS FUND, INC.
700 North
Water Street
Milwaukee,
Wisconsin 53202
March 31, 1996
