SCOUT
REGIONAL
FUND
A no-load mutual fund
that seeks long-term
growth of both capital
and income by investing
in smaller regional
companies.
Quarterly Report
September 30, 1996
TO THE SHAREHOLDERS
Scout Regional Fund's total return (price change and reinvested distributions)
for the calendar quarter ended September 30, 1996 was 0.67% in comparison with
the unmanaged Value Line Composite Index and Lipper Small Co. Fund Index,
which earned 1.05% and 1.15%, respectively 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.
During the month of July the stock markets suffered a sharp correction.
In August stocks in general remained in a narrow trading range, then rebounded
strongly in September to new highs. The small capitalization stocks lost more
during the correction than the medium and large capitalization stocks and have
come back less. Many of the technology, health care and consumer service
stocks which fell the hardest during the decline recovered the most as
momentum stocks came to the fore again.
Top 10 Equity Holdings
Market Percent
Value of Total
Layne Christensen Co. $ 806,000 1.83%
Southwestern Energy Co. 743,750 1.69%
Brunswick Corp. 696,000 1.58%
NPC International Inc. 677,250 1.54%
Safety Kleen Corp. 660,000 1.50%
Empire District Electric Co. 656,250 1.49%
CPI Corp. 656,250 1.49%
Lawter International 625,625 1.42%
Bandag Inc. 617,188 1.40%
Kerr McGee Corp. 608,750 1.38%
Top 10 Equity Holdings Total: $ 6,747,063 15.32%
Note: All market values based on 9/30/96 statement of assets.
The correction in July was caused by inflation fears, weakening earnings
growth in many sectors and concerns about the length of this bull market. It
appears now that the surging economic growth in the second calendar quarter
will slow in the second half of this year. The flow of cash into aggressive
growth funds started to slow in June reducing the support for the market.
In reaction to the extensive over-valuation in the stock markets and other
economic concerns, Scout Regional Fund has maintained its defensive stance.
The economic sector weighting in consumer cyclical stocks has been reduced and
the weighting in consumer staples increased. The heavy weighting in utilities
has been retained. The cash reserve has been held to use when market
conditions provide significant buying opportunities.
PIE CHART
We appreciate you as a valued shareholder of Scout Regional Fund and
continually welcome your questions or comments.
Sincerely,
/s/David B. Anderson
David B. Anderson
UMB Investment Advisors
FINANCIAL STATEMENTS
Statement of Net Assets
September 30, 1996
Market
Shares Company Value
COMMON STOCKS - 77.91%
BASIC MATERIALS - 6.92%
50,000 Amax Gold, Inc. 281,250
15,000 Atchison Casting Co. 228,750
18,000 Cyprus Amax Minerals Co. 387,000
40,000 Fansteel, Inc. 275,000
30,000 Huntco, Inc. Cl. A 532,500
35,000 Laclede Steel Co. 148,750
25,000 Midwest Grain Products, Inc. 340,625
18,000 Petrolite Corp. 603,000
20,000 Santa Fe Pacific Gold 250,000
3,046,875
CAPITAL GOODS - 9.12%
12,500 Bandag, Inc. 617,188
27,500 Bha Group, Inc. 398,750
50,000 Green (A.P.) Industries Inc. 500,000
18,000 Harmon Industries, Inc. 301,500
7,000 Hon Industries, Inc. 278,250
50,000 Instituform Technologies Inc., Cl. A 400,000
62,000 Layne Inc. 806,000
50,000 Myr Group, Inc. 543,750
5,000 Paul Mueller Company 170,000
4,015,438
CONSUMER CYCLICAL - 21.25%
30,000 Angelica Corp. 648,750
15,000 Brown Group, Inc. 348,750
29,000 Brunswick Corp. 696,000
35,000 CPI Corp. 656,250
2,500 Caseys General Stores, Inc. 43,750
6,000 Dillards Dept. Stores, Inc. Cl. A 193,500
16,000 Donnelley (R.R.) & Sons 516,000
20,000 First Alert, Inc. 117,500
35,000 Flexsteel Industries, Inc. 411,250
35,000 Kellwood Co. 581,875
9,800 Lee Enterprises, Inc. 224,175
10,000 Mallinckrodt Group, Inc. 416,250
1,500 May Department Stores Co. 72,937
24,000 Maytag Corporation 468,000
18,150 MedPartners Inc. 412,913
86,000 NPC International, Inc. Cl. B 677,250
35,000 O'Sullivan Industries Holdings, Inc. 310,625
40,000 Outboard Marine Corp. 615,000
20,000 Republic Group Inc. 287,500
40,000 Safety-Kleen Corp. 660,000
80,000 Sanfilippo (John B & Son), Inc. 500,000
1,000 Sonic Corp. 25,375
34,000 Stuart Entertainment, Inc. 195,500
75,000 Toastmaster Inc. 281,250
9,360,400
CONSUMER STAPLES - 12.12%
15,000 Alberto-Culver Co. Cl. A 549,375
20,000 Beverly Enterprises, Inc. 217,500
5,000 Celestial Seasonings, Inc. 97,500
25,000 Clarcor Inc. 546,875
35,000 Exabyte Corp. 525,000
54,000 Isco, Inc. 526,500
55,000 Lawter International, Inc. 625,625
18,000 Rival Co. 396,000
20,000 Sealright Co. 235,000
8,000 Sigma-Aldrich Corp. 456,000
82,500 TCBY Enterprises, Inc. 360,937
40,000 Vicorp Restaurants, Inc. 580,000
28,000 Winnebago Industries, Inc. 224,000
5,340,312
ENERGY - 9.25%
7,500 Helmerich & Payne Inc. 327,187
10,000 Kerr-Mcgee Corp. 608,750
2,500 Kn Energy, Inc. 88,125
26,000 Laclede Gas Co. 630,500
9,000 Mapco, Inc. 536,625
40,000 Maverick Tube Corp. 560,000
12,000 Murphy Oil Corp. 579,000
23,000 St Joseph Light & Power Co. 373,750
10,000 St Mary Land & Exploration 165,000
20,000 Total Petroleum
North America Ltd. 207,500
4,076,437
FINANCIAL - 2.13%
2,000 Boatmen's Bancshares 111,750
10,000 Brenton Banks 247,500
1,200 Commerce Bancshares Inc. 46,800
1,500 Kansas City Life Insurance Co. 83,250
1,000 Magna Group, Inc. 28,000
10,000 Old Republic International 247,500
4,000 Reinsurance Group of America, Inc. 175,500
940,300
MISCELLANEOUS - 3.95%
15,000 Acx Technologies 260,625
60,000 B.I. Inc. 495,000
10,000 Lawson Products 218,750
10,000 Molex Inc. 372,500
50,000 Stimsonite Corp. 337,500
10,000 Trion Inc. 56,250
1,740,625
TECHNOLOGY - 0.17%
3,500 DII Group Inc. 72,625
TRANSPORTATION & SERVICE - 0.82%
22,500 Werner Enterprises, Inc. 360,000
UTILITIES - 12.18%
38,000 Aliant Communications Inc. 598,500
15,000 Baldor Electric 294,375
12,000 Calenergy, Inc. 382,500
35,000 Empire District Electric Co. 656,250
15,000 Ies Industries, Inc. 455,625
15,000 Interstate Power Co. 435,000
8,000 Kansas City Power & Light Co. 214,000
50,000 Southwestern Energy Co. 743,750
16,000 Union Electric Co. 590,000
15,000 Utilicorp United, Inc. 414,375
20,000 Western Resources, Inc. 582,500
5,366,875
TOTAL COMMON STOCKS - 77.91% 34,319,887
Face Market
Amount Description Value
CONVERTIBLE CORPORATE BONDS - 0.82%
$ 384,000 Beverly Enterprises, Inc. CV.
Sub. Deb., 7.625%
due March 15, 2003 360,960
SHORT-TERM CORPORATE NOTES - 21.50%
500,000 AIG Funding Inc.,
5.30%, due October 10, 1996 499,264
500,000 Aluminum Co. of America,
5.35%, due November 1, 1996 497,622
500,000 Ameritech Cap Funding Corp.,
5.29%, due October 16, 1996 498,825
500,000 Amoco Co.,
5.25%, due November 22, 1996 496,135
500,000 Anheuser-Busch Cos., Inc.
5.25% due October 15, 1996 498,906
500,000 BellSouth Telecommunications,
5.30%, due October 4, 1996 499,706
500,000 Campbell Soup Co.,
5.31%, due October 9, 1996 499,336
500,000 Coca-Cola Co.,
5.28%, due October 8, 1996 499,413
500,000 du Pont E. I. de Nemours & Co.,
5.25%, due October 7, 1996 499,490
500,000 Englehard Corp.,
5.37%, due October 28, 1996 497,912
500,000 Gillette Co.,
5.26% due October 3, 1996 499,781
500,000 IBM International Business Machines,
5.34%, due October 23, 1996 498,294
500,000 Kellogg Co.,
5.28%, due November 8, 1996 497,140
500,000 Monsanto Co.,
5.42%, due October 25, 1996 498,118
500,000 Motorola Inc.,
5.31%, due October 21, 1996 498,451
500,000 Philip Morris Cos., Inc.,
5.24%, due October 9, 1996 499,345
500,000 Southwestern Bell Telephone,
5.26%, due October 25, 1996 498,174
500,000 Toys "R" Us,
5.38%, due October 23, 1996 498,281
500,000 Wal-Mart Stores, Inc.,
5.25%, due October 29, 1996 497,885
TOTAL SHORT-TERM
CORPORATE NOTES - 21.50% 9,472,078
REPURCHASE AGREEMENT - 0.84%
370,000 Northern Trust Co.,
5.58%, due October 1, 1996
(Collateralized by
U.S. Treasury Notes, 6.125%,
due August 31, 1998) 370,000
TOTAL INVESTMENTS - 101.07% $ 44,522,925
Other assets less liabilities - 1.07% (470,277)
TOTAL NET ASSETS - 100.00%
(equivalent to $10.45 per share;
10,000,000 shares of $1.00 par
value capital shares authorized;
4,215,242.591 shares outstanding) $ 44,052,648
BASIS OF DETERMINING MARKET VALUE. Each investment is valued at the
latest sales price on September 30, 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.
Eric T. Jager
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
John 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
