Dear Shareholder:
In 1995, your fund gained 19.7%. In most years we would be ecstatic with
this return. And while we eclipsed the field in 1994, this year we felt like a
runner-up. The Russell 2000, an index we feel is representative of our
approach, gained a stunning 28.4% and the S&P 500 increased a fantastic
37.6%!
Most managers would be reluctant to share those comparisons. We, on the
other hand, recognize that our niche may be slightly out of sync with the
market during short periods of time. While it is painful to be bested this
year, we still feel that it would be foolish to deviate from our stated
investment philosophy. As many investors understand, consistency of
application of investment approach provides lasting rewards. Chasing
windmills might be appropriate for Don Quixote, but investing in the latest
fad can be hazardous to an investor's financial health.
1995
Performance in 1995 was enhanced by several stocks including CONMED
(+88%), our largest holding. Among our other top five performers were:
Sage Laboratories (+92%), Transworld Bancorp (+81%), Modern Controls
(+70%), and First Empire (+60%). Two banks ranked in the top five best
performers and we found, in general, our financial holdings did well. With
the exception of two - Midland Financial (-18%) and Salomon (-5%) - all
demonstrated positive performance.
What we find most intriguing is that, of the stocks that performed poorly in
1995, most appear to have excellent future prospects. Along with Midland,
we feel that C-COR Electronics (-24%), Spartan Motors (-18%), Blair (-21%),
and Raven Industries (-9%) are well managed companies that could
show extraordinary performance in the future. Economic progress of some
of these specific issues suggests that 1996 may be a much better year than
their 1995 performance indicated.
1996 and Beyond
No one knows exactly what the future holds, especially in the short term.
The only prediction we can safely make is that at some point we will
experience a market decline. (We feel safe in this prediction knowing we
haven't experienced a major decline since 1981-82!) While bear markets are
inevitable, they are not to be feared. Often they occur for emotional reasons
that have no bearing on the economic positives of many businesses. For
example, during the market decline of 1990, WD-40, a company owned in
your Fund, actually increased its revenue and profitability. Despite these
positive operating results, the market price of the stock was down for the
year more than the market as a whole. Subsequently, the company's
favorable performance was recognized in a higher market price. Today we
can say with some certainty that the economic prospects for WD-40
Company could not be better. International business is increasing rapidly
and we are happy to report that WD-40 has recently acquired the 3-IN-ONE
brand lubricant. Two products with great brand recognition, coupled with
the company's strength in domestic and international distribution, can only
be a formula for positive results. WD-40 is like a tightly closed rosebud
that is ready to burst into bloom.
Your fund owns many similar business opportunities. Currently most sell at
about 11-12 times estimated 1996 earnings - a bargain, we believe. They all
share strong financial promise. While there may be some disappointments
along the way, we assure you that we will keep our focus on our niche -
understandable, highly profitable businesses managed by extraordinarily able
people.
Very sincerely,
Thomas O. Putnam
President
<PAGE>
Top Ten Holdings
- ------------------------
1) CONMED Corporation
2) Fourth Financial
3) ReliaStar Financial
4) Hawkeye Bancorp
5) CR Bard
6) American Express
7) Kaydon Corporation
8) OnBancorp
9) Mailboxes Etc.
10) Allied Group
Average Annual
Total Returns for the
period ended 12/31/95
1 year 19.7%
5 year 18.8%
9 year 13.1%
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
December 31, 1995
COMMON STOCKS (100%) Shares Value
Automotive (0.95%)
Spartan Motors, Inc. . . . . . . . . . . . . . .213,950 $ 2,353,450
Banking (19.62%)
Centennial Bancorp . . . . . . . . . . . . . . .101,503 1,344,915
Centura Bancorp. . . . . . . . . . . . . . . . .146,250 5,137,031
FirsTier Financial, Inc. . . . . . . . . . . . . 23,700 1,042,800
First Empire Corporation . . . . . . . . . . . . 13,000 2,834,000
Fourth Financial . . . . . . . . . . . . . . . .286,300 11,720,406
Hawkeye Bancorporation . . . . . . . . . . . . .352,400 9,382,650
ONBANcorp. . . . . . . . . . . . . . . . . . . .230,000 7,676,250
*Plumas Bank . . . . . . . . . . . . . . . . . . 47,520 641,520
Southtrust Corporation . . . . . . . . . . . . .142,000 3,638,750
*Transworld Bancorp. . . . . . . . . . . . . . . 55,692 835,380
TrustCo Bank Corp. NY. . . . . . . . . . . . . .122,797 2,716,884
Western Bank . . . . . . . . . . . . . . . . . . 92,060 1,703,110
48,673,696
Chemical (0.83%)
WD-40 Company. . . . . . . . . . . . . . . . . . 50,400 2,066,400
Consumer Products (4.15%)
Jostens, Inc.. . . . . . . . . . . . . . . . . .238,300 5,778,775
Stanhome . . . . . . . . . . . . . . . . . . . .155,000 4,514,375
10,293,150
Diversified Manufacturing (5.49%)
CLARCOR, Inc.. . . . . . . . . . . . . . . . . . 57,500 1,171,563
+*ESSEF Corporation. . . . . . . . . . . . . . .277,250 4,366,687
Raven Industries . . . . . . . . . . . . . . . .145,450 2,654,463
+Versa Technologies. . . . . . . . . . . . . . .355,758 5,425,309
13,618,022
Electrical/Electronics (3.40%)
*C-COR Electronics . . . . . . . . . . . . . . .253,200 5,950,200
*IFR Systems . . . . . . . . . . . . . . . . . .169,000 1,563,250
Sage Laboratories, Inc.. . . . . . . . . . . . . 45,500 910,000
8,423,450
<PAGE>
FAM VALUE FUND
- ---------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
December 31, 1995
Financial Services (9.67%)
+*Allied Capital Advisors. . . . . . . . . . . .500,000 2,656,250
American Express . . . . . . . . . . . . . . . .219,500 9,081,812
Fund America . . . . . . . . . . . . . . . . . . 89,700 6,682,650
Salomon, Inc.. . . . . . . . . . . . . . . . . .157,000 5,573,500
23,994,212
Grocery Stores (2.46%)
Hannaford Brothers . . . . . . . . . . . . . . .248,100 6,109,463
Health Care (17.08%)
CR Bard, Inc.. . . . . . . . . . . . . . . . . .300,000 9,675,000
+*CONMED Corporation . . . . . . . . . . . . . .996,862 24,921,550
*Copley Pharmaceuticals, Inc.. . . . . . . . . .113,100 1,555,125
+*Hycor Biomedical . . . . . . . . . . . . . . .828,900 3,626,438
Minntech Corporation . . . . . . . . . . . . . . 94,000 1,850,625
+*Scherer Healthcare . . . . . . . . . . . . . .289,925 761,053
42,389,791
Insurance (21.04%)
Allied Life. . . . . . . . . . . . . . . . . . .226,800 4,110,750
Allied Group, Inc. . . . . . . . . . . . . . . .210,350 7,572,600
Donegal Group, Inc.. . . . . . . . . . . . . . .116,000 2,175,000
First Colony Corporation . . . . . . . . . . . .270,300 6,858,862
+Intercargo Corporation. . . . . . . . . . . . .588,800 5,888,000
+Midland Financial Group, Inc. . . . . . . . . .317,200 3,846,050
Poe & Brown, Inc.. . . . . . . . . . . . . . . . 52,700 1,310,913
Protective Life Corporation. . . . . . . . . . .167,200 5,225,000
Providian Corporation. . . . . . . . . . . . . . 20,932 852,979
ReliaStar Financial. . . . . . . . . . . . . . .233,100 10,343,812
UNUM Corporation . . . . . . . . . . . . . . . . 73,380 4,035,900
52,219,866
Machinery & Equipment (8.52%)
IDEX Corporation . . . . . . . . . . . . . . . .104,400 4,280,400
Kaydon Corporation . . . . . . . . . . . . . . .297,500 9,036,562
+Modern Controls. . . . . . . . . . . . . . . .277,812 3,021,206
Tennant Corporation. . . . . . . . . . . . . . .201,400 4,808,425
21,146,593
<PAGE>
FAM VALUE FUND
- ---------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
December 31, 1995
Mail Order & Catalog (1.28%)
Blair Corporation. . . . . . . . . . . . . . . .100,800 3,175,200
Postage & Business Service (3.02%)
+*Mailboxes, Etc.. . . . . . . . . . . . . . . .600,000 7,500,000
Printing (2.49%)
*CSS Industries, Inc.. . . . . . . . . . . . . .241,500 5,313,000
Deluxe Corporation . . . . . . . . . . . . . . . 29,600 858,400
6,171,400
Total Investments (Cost $196,457,142). . . . $ 248,134,693
-------------
* Non-income producing
+ See Note 5
<PAGE>
FAM VALUE FUND
- ---------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
ASSETS
Investment in securities at market value
(Cost $196,457,142). . . . . . . . . . . . . . . $248,134,693
Cash at interest . . . . . . . . . . . . . . . . . 19,084,505
Dividends and interest receivable. . . . . . . . 450,474
Total Assets. . . . . . . . . . . . . . . 267,669,672
LIABILITIES
Payable for investment securities purchased. . 110,938
Payable for shares redeemed. . . . . . . . . . 48,325
Accrued management fees. . . . . . . . . . . . . 222,881
Accrued expenses . . . . . . . . . . . . . . . 129,592
Total Liabilities . . . . . . . . . . 511,736
NET ASSETS
Source of Net Assets:
Net capital paid in on shares of
beneficial interest . . . . . . . $215,479,628
Undistributed net investment income. . 725
Accumulated net realized gains . . . . 32
Net unrealized appreciation. . . . . . 51,677,551
Net Assets . . . . . . . . . . . . . . . $267,157,936
------------
Net asset value per share; 10,868,081 shares of
beneficial interest outstanding (Note 3) . . . $24.58
-------
<PAGE>
FAM VALUE FUND
- ----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
December 31, 1995
INVESTMENT INCOME
Income:
Dividends. . . . . . . . . . . . . . . . . $4,225,261
Interest . . . . . . . . . . . . . . . 986,691
Total income. . . . . . . . . . 5,211,952
Expenses:
Investment advisory fee (Note 2) . . . . . 2,395,056
Shareholder servicing and
related expenses (Note 2). . . . . . . 337,336
Printing and mailing . . . . . . . . . . 105,879
Professional fees. . . . . . . . . . . . 82,513
Registration fees. . . . . . . . . . . . 31,941
Custodian fees . . . . . . . . . . . . . 31,260
Trustees . . . . . . . . . . . . . . . . 12,017
Other. . . . . . . . . . . . . . . . . . 7,103
Total Expenses. . . . . . . . 3,003,105
Net Investment Income. . . 2,208,847
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments. . . . . . . . . 4,211,001
Unrealized appreciation of
investments for the year . . . . . . . . . . . . 37,399,564
Net Gain on Investments. . . . 41,610,565
NET INCREASE IN NET ASSETS FROM OPERATIONS $43,819,412
-----------
<PAGE>
FAM VALUE FUND
- -----------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31, 1995 and 1994
1995 1994
----------- -----------
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income. . . . . . . . . . . . $ 2,208,847 $ 1,173,970
Net realized gain on investments . . . . . . 4,211,001 6,062,56
Unrealized appreciation for the year . . . . . 37,399,564 6,225,198
Net Increase in Net Assets From Operations 43,819,412 13,461,924
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . (2,209,176) (1,172,824)
Net realized gain on investments . . . . . . . (4,210,980) (6,062,755)
CAPITAL SHARE TRANSACTIONS (NOTE 3): . . . . . . . 19,179,600 (15,785,293)
Total Increase (Decrease) in Net Assets. . . . 56,578,856 (9,558,948)
NET ASSETS:
Beginning of year. . . . . . . 210,579,080 220,138,028
End of year. . . . . . . . . . . . . . . . . . . $267,157,936 $210,579,080
------------ ------------
<PAGE>
FAM VALUE FUND
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Summary of Accounting Policies
FAM Value Fund (the "Fund") is a series of Fenimore Asset Management
Trust, a no-load, diversified, open-end management investment company
registered under the Investment Company Act of 1940. The investment
objective of the Fund is to seek a high long term total return, consisting
of appreciation and dividend income from investments in equity related
securities. The following is a summary of significant accounting policies
followed in the preparation of its financial statements.
a) Valuation of Securities
Securities traded on a national securities exchange or admitted to trading
on NASDAQ are valued at the last reported sales price. Common stocks for
which no sale was reported, and over-the-counter securities, are valued at
the last reported bid price. Short term securities are carried at amortized
cost, which approximates market value.
b) 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 all of its taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Use of Estimates
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 increases and decreases in net assets
from operations during the reporting period. Actual results could differ
from those estimates.
d) Other
Securities transactions are recorded on the trade date basis. Interest
income is accrued as earned and dividend income is recorded on the ex-dividend
date. Distributions to shareholders, which are determined in accordance
with income tax regulations, are recorded on the ex-dividend date.
2. Investment Advisory Fees and Other Transactions with Affiliates
Under the Investment Advisory Contract, the Fund pays an investment
advisory fee to Fenimore Asset Management, Inc. (the "Advisor") equal, on
an annual basis, to 1% of the Fund's average daily net assets. Certain
officers and trustees of the Fund are also officers and directors of the
Advisor. The Advisor is required to reimburse the Fund for its expenses to
the extent that such expenses, including the advisory fee, for any fiscal
year exceeds 2% of the average daily net assets. No such reimbursement was
required for the year ended December 31, 1995. FAM Shareholder
Services, Inc., a company under common control with the Advisor serves
as shareholder servicing agent for which it received a monthly fee of $1.50
per shareholder account.
<PAGE>
3. Shares of Beneficial Interest
At December 31, 1995, an unlimited number of $.001 par value shares of
beneficial interest were authorized. Transactions were as follows:
Year Ended December 31,
-------------------------------------------------
1995 1994
-------------------------------------------------
Shares Amount Shares Amount
Shares sold . . . . . . . . 2,306,111 $51,452,609 1,645,500 $33,524,721
Shares issued on reinvestment
of dividends. . . . . . . . 251,458 6,135,577 331,068 6,939,181
Shares redeemed . . . . . . (1,696,462) (38,408,586) (2,763,147) (56,249,195)
Net (increase) decrease . . . 861,107 $19,179,600 (786,579) $(15,785,293)
----------- ----------- ----------- -----------
4. Investment Transactions
During the year ended December 31, 1995, purchases and sales of investment
securities, other than short-term obligations, were $31,786,676 and
$21,378,268. The cost of securities for federal income tax purposes is the
same as shown in the investment portfolio. Realized gains and losses are
reported on an identified cost basis.
The aggregate gross unrealized appreciation of portfolio securities, based on
cost for federal income tax purposes, was as follows:
Unrealized appreciation. . . . . . .$66,678,299
Unrealized (depreciatoin). . . . . (15,000,748)
Net unrealized appreciation. . . . .$51,677,551
------------
5. Holdings of 5% Voting Securities of Portfolio Companies
Investments in portfolio companies, 5% or more of whose outstanding voting
securities are held by the Fund, are defined in the Investment Company Act
of 1940 as affiliated companies. Investments in affiliated companies as of
December 31, 1995 amounted to $62,012,543. For the year ended December
31, 1995, dividend income of $476,865 was received from affiliated companies
as well as realized gains of $885,307 from the sale of such companies.
<PAGE>
6. Selected Financial Information
Per share performance Year Ended December 31,
(For a share outstanding -----------------------------------------------
throughout the year) 1995 1994 1993 1992 1991
------ ------ ------ ------ ------
Net asset value,
beginning of year. . . . . $21.04 $20.40 $20.50 $16.87 $12.06
Income from investment
operations:
Net investment income . . . 0.21 0.12 0.09 0.10 0.08
Net realized and
unrealized gain (loss)
on investments . . . . . . 3.94 1.27 (0.05) 4.11 5.63
Total from investment
operations . . . . . . . . 4.15 1.39 0.04 4.21 5.71
Less distributions:
Dividends from net
investment income. . . . . (0.21) (0.12) (0.09) (0.10) (0.08)
Distributions from
net realized gains . . . . (0.40) (0.63) (0.05) (0.48) (0.82)
Total distributions . . . . (0.61) (0.75) (0.14) (0.58) (0.90)
Change in net asset
value for the year. . . . 3.54 0.64 (0.10) 3.63 4.81
Net asset value,
end of year. . . . . . . $24.58 $21.04 $20.40 $20.50 $16.87
TOTAL RETURN 19.71% 6.82% 0.21% 25.08% 47.63%
Ratios/Supplemental data
Net Assets,
end of year (000) . . $267,158 $210,579 $220,138 $44,694 $13,943
Ratios to average
net assets of:
Expenses 1.25%* 1.39% 1.39% 1.50% 1.49%
Net Investment Income 0.92%* 0.58% 0.57% 0.81% 0.66%
Portfolio turnover rate 9.67% 2.15% 4.83% 9.84% 13.56%
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Trustees and Shareholders
FAM Value Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of FAM Value Fund, a series of
Fenimore Asset Management Trust, as of December 31, 1995, 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
selected financial information for each of the four years in the period then
ended. These financial statements and selected financial information are the
responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and selected financial information
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
selected financial information 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 December 31, 1995, by correspondence with the
custodian and brokers. 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 selected financial information
referred to above present fairly, in all material respects, the financial
position of FAM Value Fund, as of December 31, 1995, the results of its
operations, the changes in its net assets and the selected financial
information for the periods indicated, in conformity with generally accepted
accounting principles.
New York, New York
January 10, 1996
