SCOUT REGIONAL FUND, INC.
A no-load mutual fund that seeks long-term
growth of both capital and income by investing
in smaller regional companies.
Quartely Report
March 31, 1996
TO THE SHAREHOLDERS
Scout Regional funds total return (price change and
reinvested distributions) for the first quarter 1996 was
4.45% in comparison to the unmanaged Value Line Composite
index which earned 4.71% for the same time period.
Performance data contained in this report is for past
periods only. Past performance is not predictive of future
performance. Investment return and share value will
fluctuate and redemption value may be more or less than
original cost.
As larger capitalization stocks became more expensive,
better-priced smaller capitalization stocks that had fallen
out of favor became more attractive. Scout Regional reduced
its financial sector weighting by selling partial stock
positions in boatmen's Bancshares, Old Republic
International and Reinsurance Group of America and
eliminating its position in CCH, Inc. OBO (publisher). The
utilities sector was also reduced throughout the quarter and
the basic materials sector weighting was increased.
Unlike last year, small capitalization stocks kept better
pace with their large capitalization counterparts. Much of
the markets continued growth was due to large cash inflows
into mutual funds. Overall, we saw record inflows throughout
the quarter with $29 billion in January, $23.9 billion in
February and $23 billion in March. This sustained cash flow
drove stock prices upward and fueled their momentum.
Inflation remains moderate, but rising interest rates in the
quarter coupled with a strengthening US dollar has spurred
inflationary fears. An increase in inflation and economic
slowdown could prove detrimental to stock values.
Top 10 Equity Holdings
Market Percent
Value of Total
NPC International Inc. Cl. B $ 774,000 1.93%
Layne Inc. 728,500 1.82%
Alberto-Culver Co. Cl. A 614,531 1.54%
Southwestern Energy Co. 600,000 1.50%
Laclede Gas. 591,500 1.48%
Sanfilippo (John B. & Son), Inc. 590,625 1.48%
Huntco, Inc. Cl. A 581,250 1.45%
Brunswick Corp. 575,000 1.44%
Safety-Kleen Corp. 575,000 1.44%
Exabyte Corp. 570,938 1.43%
Top 10 Equity Holdings Total: $ 6,201,344 15.51%
Note: All market values based on 3/31/96 statement of
assets.
With this in mind, Scout Regional Fund will maintain its
current cash reserves as a hedge against a possible market
downturn. Our focus has always been on investing in stocks
that are currently under-valued but have long-term growth
potential. We will adhere to this contrarian investment
style during this unpredictable market and continue to
search for fairly valued stocks.
We appreciate you as a valued shareholder of the Scout
Regional Fund and continually welcome your questions or
comments.
Sincerely,
David B. Anderson
UMB Investment Advisors
Shares of the Scout Funds are not deposits or obligations
of, nor guaranteed by, UMB Bank, n.a. or any other banking
institution, nor are they insured by the Federal Deposit
Insurance Corporation or any other applicable deposit
insurance. These shares involve investment risks, including
the possible loss of the principal amount invested.
FINANCIAL STATEMENTS
Statement of Net Assets
March 31, 1996
Market
Shares Company Value
COMMON STOCKSs 75.49%
BASIC MATERIALS 8.10%
50,000 Amax Gold, Inc. 343,750
15,000 Atchison Casting Co. 191,250
18,000 Cyprus Amax Minerals Co. 508,500
40,000 Fansteel, Inc. 240,000
30,000 Huntco, Inc. Cl. A 581,250
35,000 Laclede Steel Co. 196,875
25,000 Midwest Grain Products, Inc. 318,750
18,000 Petrolite Corp. 544,500
20,000 Santa Fe Pacific Gold 320,000
3,244,875
Capital Goods 9.67%
9,000 Bandag, Inc. 474,750
25,000 Bha Group, Inc. 318,750
100 Emerson Electric Co. 8,075
15,000 Green (A.P.) Industries Inc. 262,500
18,000 Harmon Industries, Inc. 265,500
14,925 Hon Industries, Inc. 343,275
50,000 Instituform Technologies Inc., Cl. A 525,000
62,000 Layne Inc. 728,500
50,000 Myr Group, Inc. 531,250
8,000 Noble Affiliates, Inc. 260,000
5,000 Paul Mueller Company 153,750
3,871,350
Consumer Cyclical 19.63%
22,000 Angelica Corp. 467,500
20,000 Brown Group, Inc. 270,000
25,000 Brunswick Corp. 575,000
33,000 CPI Corp. 528,000
18,000 Caremark International, Inc. 452,250
2,500 Caseys General Stores, Inc. 58,750
6,000 Dillards Dept. Stores, Inc. Cl. A 207,750
500 Donnelley (R.R.) & Sons 17,250
35,000 Flexsteel Industries, Inc. 350,000
28,500 Kellwood Co. 441,750
7,000 Lee Enterprises, Inc. 147,875
6,000 Leggett & Platt 137,250
10,000 Mallinckrodt Group, Inc. 376,250
3,000 May Department Stores Co. 144,750
24,000 Maytag Corporation 486,000
86,000 NPC International, Inc. Cl. B 774,000
35,000 OOSullivan Industries Holdings, Inc. 205,625
22,000 Outboard Marine Corp. 420,750
40,000 Safety-Kleen Corp. 575,000
75,000 Sanfilippo (John B & Son), Inc. 590,625
3,000 Sonic Corp. 61,500
34,000 Stuart Entertainment, Inc. 170,000
75,000 Toastmaster Inc. 403,125
7,861,000
Consumer Staples 13.96%
17,250 Alberto-Culver Co. Cl. A 614,531
20,000 Beverly Enterprises, Inc. 220,000
10,000 Clarcor Inc. 217,500
35,000 Exabyte Corp. 570,937
20,000 Fleming Companies Inc. 285,000
50,000 Isco, Inc. 443,750
6,000 Jones Medical Industries, Inc. 231,000
50,000 Lawter International, Inc. 543,750
18,000 Rival Co. 436,500
35,000 Sealright Co. 433,125
8,000 Sigma-Aldrich Corp. 458,000
75,000 TCBY Enterprises, Inc. 365,625
36,000 Vicorp Restaurants, Inc. 531,000
28,000 Winnebago Industries, Inc. 241,500
5,592,218
Energy 8.87%
9,750 Barrett Resources Corp. 243,750
7,500 Helmerich & Payne Inc. 253,125
2,000 Kerr-Mcgee Corp. 127,000
4,000 Kn Energy, Inc. 124,500
26,000 Laclede Gas Co. 591,500
9,000 Mapco, Inc. 502,875
40,225 Maverick Tube Corp. 472,643
12,000 Murphy Oil Corp. 514,500
11,500 St Joseph Light & Power Co. 373,750
10,000 St Mary Land & Exploration 155,000
20,000 Total Petroleum
North America Ltd. 195,000
3,553,643
Financial 2.86%
2,500 BoatmenOs Bancshares 98,125
15,000 Brenton Banks 341,250
1,575 Commerce Bancshares Inc. 54,731
5,000 Edwards (A.G.), Inc. 124,375
1,500 Kansas City Life Insurance Co. 79,500
1,500 Magna Group, Inc. 34,687
2,000 Mercantile Bancorporation Inc. 91,500
1,500 Old Republic International 48,750
7,500 Reinsurance Group of America, Inc. 274,687
1,147,605
Miscellaneous 2.51%
15,000 Acx Technologies 271,875
60,000 B.I. Inc. 502,500
25,000 Stimsonite Corp. 231,250
1,005,625
Technology 0.27%
3,500 DII Group Inc. 106,312
Transportation & Service 0.90%
15,000 Werner Enterprises, Inc. 360,000
Utilities 8.72%
18,000 California Energy Co., Inc. 479,250
30,000 Empire District Electric Co. 547,500
15,000 Ies Industries, Inc. 418,125
17,000 Interstate Power Co. 541,875
8,000 Kansas City Power & Light Co. 204,000
20,000 Lincoln Telecommunications Co. 385,000
50,000 Southwestern Energy Co. 600,000
7,000 Union Electric Co. 287,000
1,000 Utilicorp United, Inc. 28,625
3,491,375 30,234,003
TOTAL COMMON STOCKS 75.49%
Face Market
Amount Description Value
Convertible Corporate Bonds 0.88%
$ 384,000 Beverly Enterprises, Inc. CV.
Sub. Deb., 7.625%
due March 15, 2003 353,280
Short-Term Corporate Notes 21.19%
500,000 American Greetings Corp.,
5.22%, due April 3, 1996 499,782
500,000 AT&T Corp.,
5.29%, due April 17, 1996 498,750
500,000 Amoco Corp.,
5.18%, due April 2, 1996 499,856
500,000 Anheuser-Busch Cos., Inc.
5.13% due April 17, 1996 498,788
500,000 BellSouth Corp.,
5.22%, due April 9, 1996 499,347
500,000 Chevron Corp.,
5.35%, due April 24, 1996 498,216
500,000 Walt Disney Co.,
5.22%, due April 9, 1996 499,347
500,000 Gte North Inc.,
5.42%, due April 11, 1996 499,171
500,000 Hersheys Corp.,
5.23%, due April 8, 1996 499,418
500,000 Ibm Corp.,
5.40%, due April 2, 1996 499,850
500,000 Marsh & McClennan Cos., Inc.
5.27%, due April 12, 1996 499,121
500,000 Nalco Chemical Corp.,
5.25%, due April 11, 1996 499,197
500,000 Progress Capital Co.,
5.38%, due April 26, 1996 498,057
500,000 Shell Oil Co.,
5.32%, due April 26, 1996 498,078
500,000 Wal-Mart Stores, Inc.,
5.15%, due April 8, 1996 499,427
500,000 Wisconsin Electric & Power Co.,
5.36%, due April 18, 1996 498,660
500,000 Xerox Corp.,
5.20%, due April 2, 1996 499,855
TOTAL SHORT-TERM
CORPORATE NOTES 21.19% 8,484,920
REPURCHASE AGREEMENT 2.31%
925,000 Northern Trust Co.,
4.85%, due April 1, 1996 (Collateralized by
U.S. Treasury Notes, 5.75%,
due September 30, 1997) 925,000
TOTAL INVESTMENTS 99.87% $ 39,997,203
Other assets less liabilities 0.13% 53,517
TOTAL NET ASSETS 100.00%
(equivalent to $10.56 per share;
10,000,000 shares of $1.00 par value capital
shares authorized;
3,793,375.327 shares outstanding) $ 40,050,720
BASIS OF DETERMINING MARKET VALUE. Each investment is valued
at the latest sales price on March 31, 1996, as reported by
the principal exchange on which the issue is listed. If no
sale is reported, or if unlisted, the average of the latest
bid and asked price is used.
This report has been prepared for the information of the
Shareholders of Scout Regional Fund, Inc., and is not to be
construed as an offering of the shares of the Fund. Shares
of this Fund and of the other Scout Funds are offered only
by the Prospectus, a copy of which may be obtained from
Jones & Babson, Inc.
BOARD OF DIRECTORS AND OFFICERS
Board of Directors
Larry D. Armel
William E. Hoffman, D.D.S.
Stephen F. Rose
Stuart Wien
Officers
Larry D. Armel, President
P. Bradley Adams, Vice President & Treasurer
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
Jack G. Dyer, Vice President
Manager and Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young,
Philadelphia, Pennsylvania
John G. Dyer, Kansas City, Missouri
Custodian
UMB Bank, n.a., Kansas City, Missouri
JONES & BABSON
MUTUAL FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE 1-800-996-2862
