LETTER TO OUR SHAREHOLDERS
Dear Shareholder:
We would like to express our appreciation for the confidence you have shown in
our investment philosophy. In addition, we are thankful for the love, strength,
and wisdom given to us by our heavenly creator and caring shepherd.
2000 NINE-MONTH RESULTS
During the first nine months of 2000, the Fund's total investment portfolio
increased 14.2%. After operating expenses, our net asset value gained 11.4% from
$7.57 to $8.43.
GROWTH IN THE THIRD QUARTER
The latest quarter saw continued growth with a gain of 2% in our net asset value
and 3.1% in the investment portfolio. Our Fund's market value also increased
during this time from $8.00 to approximately $8.44. Considering the relatively
low exposure to equity markets (most of our assets are in U.S. Treasury Bills),
we are pleased with the growth in many of our remaining investments. This is
our fifth quarter of the past six wherein our net asset value has risen.
MARKET OVERVIEW
While the first half of 2000 brought stock market volatility we had warned of,
the summer months were unusually stable. The calm before the storm? Perhaps;
however, because we have prepared for this volatility, we hope to cushion our
shareholders from periods of decline seen in the S&P 500, NASDAQ and Russell
2000 indices. Our sizable Treasury Bills and cash reserves place us in an
excellent position to take advantage of buying opportunities when they arise.
PORTFOLIO HIGHLIGHTS
Our largest holding, TECHNITROL, having opened the year with a strong quarter,
stepped on the accelerator in the last two quarters and has more than doubled in
price thus far this year. Every one of our largest holdings, accounting for
more than 77% of our total market value of common stocks, were up during the
first nine months of 2000.
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OUTLOOK
While some forecasters are predicting the "Fed" will soon ease, we see no
evidence to confirm this hope at this time.
We have greatly streamlined our investments which, with very few exceptions, are
now in companies continuing to generate earnings growth and positioning
themselves to increase profits in the future. During the first week of the new
year, we took profits on those stocks whose P/E ratios expanded greatly beyond
our value requirement. Even before then, our portfolio was demonstrating
excellent value, with a P/E of 7 times estimated earnings at year-end. This
number is reduced to less than 5 times after deducting cash per share. These
factors, combined with our available cash (ready to take advantage of
opportunities coming to the long-term, value-oriented investor), lay a solid
foundation for growth potential in our investments, not for 2000 alone, but for
many years to come.
Sincerely,
Barry Ziskin October 8, 2000
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Z-Seven Fund, Inc.
SCHEDULE OF INVESTMENTS
at September 30, 2000 (Unaudited)
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Investment Securities (a) Value
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Common Stocks Shares
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APPAREL & ACCESSORIES - 2.0%
Abbeycrest Plc 10,000 $ 16,446
Quiksilver, Inc. (b) 15,150 291,638
Tarrant Apparel Group (b) 5,100 38,250
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346,334
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AUTOMOTIVE - 2.6%
Strattec Security Corporation (b) 13,600 452,200
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452,200
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BUILDING & MATERIALS - 3.4%
Barratt Developments Plc 53,000 204,819
Hughes Supply 12,200 239,364
NCI Building Systems, Inc. (b) 9,400 137,475
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581,658
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COMPUTER & RELATED - 5.9%
Avocent Corp. (b)(c) 7,200 396,900
Insight Enterprises, Inc. (b) 9,280 252,866
Pomeroy Comp. Resources (b) 19,900 376,856
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1,026,622
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CONSUMER PRODUCTS (OTHER) - 1.0%
Ballantyne of Omaha, Inc. (b) 50,505 56,818
Day Runner, Inc. (b) 3,360 2,310
Lindt & Spr ngli AG 230 114,747
-----------
173,875
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ELECTRICAL & ELECTRONICS - 10.2%
Roxboro Group Plc 100,500 492,892
Technitrol, Inc. 12,600 1,272,600
-----------
1,765,492
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FINANCIAL SERVICES - 10.6%
Brewin Dolphin 172,500 608,114
Jardine Lloyd Thompson Group Plc 125,600 699,353
Rathbone Brothers Plc 33,000 528,125
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1,835,592
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HEALTH & PERSONAL CARE - 2.6%
National Dentex Corporation (b) 17,100 294,975
Novartis AG 99 152,193
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447,168
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MULTI-INDUSTRY - 3.2%
Tomkins Plc 40,966 100,002
VT Holding A/S (Cl B) 10,565 456,439
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556,441
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Z-Seven Fund, Inc.
SCHEDULE OF INVESTMENTS
at September 30, 2000 Continued (Unaudited)
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Investment Securities (a) Value
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Common Stocks Shares
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RETAIL - 2.3%
Grow Biz International, Inc. (b) 7,700 $ 30,800
The Men's Wearhouse, Inc. (b) 9,900 280,294
Westfair Foods 360 95,872
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406,966
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TOTAL COMMON STOCKS - 43.8%
(Cost $5,398,161.00) $ 7,592,348
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Short Term Investments Eff. rate
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U.S. TREASURY BILLS - 54.2%
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Par 5,000,000, matures 10/26/00 6.054% $4,979,421
Par 1,000,000, matures 11/24/00 6.345% 990,831
Par 1,750,000, matures 1/25/01 6.302% 1,715,687
Par 1,000,000, matures 3/1/01 6.371% 974,281
Par 750,000, matures 3/1/01 6.335% 730,815
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9,391,035
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TOTAL INVESTMENT IN SECURITIES - 98.0%
(Cost $14,789,196) $ 16,983,383
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CASH, RECEIVABLES, AND OTHER ASSETS
LESS LIABILITIES - 2.0% 339,344
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NET ASSETS - 100.0%
(Equivalent to $8.43 per share based
on 2,053,731 shares of capital stock
outstanding) $ 17,322,727
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(a) Percentages are based on net assets of $17,322,727.
(b) Non-income producing investment.
(c) Cybex Computer became Avocent Corporation,
effective 7/3/00.
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COMMON STOCKS BY COUNTRY
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Percent Country Value
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54.3% United States $4,123,346
34.9 United Kingdom 2,649,752
6.0 Denmark 456,439
3.5 Switzerland 266,939
1.3 Canada 95,872
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100.0% 7,592,348
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GENERAL INFORMATION
THE FUND
Z-Seven Fund, Inc. is a non-diversified, closed-end management investment
company whose shares trade on the Nasdaq National Market System and on the
Pacific Exchange. Its investment objective is long-term capital appreciation
through investments in quality growth companies whose shares are undervalued.
SHARE REPURCHASES
Notice is hereby given, in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase, at market prices,
from time to time, shares of its common stock in the open market.
FORWARD LOOKING STATEMENTS
When used in this report and in future filings by the Fund with the Securities
and Exchange Commission, in the Fund's press releases and in oral statements
made with the approval of an authorized officer of the Fund the words or
phrases, "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are intended to
identify forward looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995. All assumptions, anticipations,
expectations and forecasts contained herein are forward looking statements that
involve risks and uncertainties. Management of the Fund cautions readers not to
place undue reliance on any such forward looking statements, which speak only as
of the date made, and should be read in conjunction with other publicly
available Fund information. Management of the Fund will not undertake, and
specifically declines, any obligations to release publicly the result of any
revisions which may be made to any forward looking statements to reflect the
occurrence of anticipated or unanticipated events.
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BOARD OF DIRECTORS
Barry Ziskin
Albert Feldman
Dr. Jeffrey Shuster
Rochelle Ziskin
Mar a De Los Santos
INVESTMENT ADVISER
TOP Fund Management, Inc.
OFFICERS
Barry Ziskin
President and Treasurer
Barbara Perleberg
Secretary
CUSTODIAN
Chase Manhattan Bank
TRANSFER AGENT
Wells Fargo Bank Minnesota, N.A.
Shareowner Services
INDEPENDENT AUDITORS
KPMG LLP
GENERAL COUNSEL
Kilpatrick Stockton LLP
STOCK LISTINGS
NASDAQ
Symbol: ZSEV
Pacific Exchange
Symbol: ZSE
CORPORATE OFFICE
1819 South Dobson Road
Suite 109
Mesa, AZ 85202
(480) 897-6214
Fax (480) 345-9227
[email protected]
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