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
March 31, 1997
TO THE SHAREHOLDERS
Scout Regional Fund's total return (price change and reinvested distributions)
for the quarter ended March 31, 1997, was 0.58%, in comparison with the
unmanaged Value Line Composite Index and Lipper Small Co. Fund Index, which
had returns of -0.78% and -10.13%, 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.
Following the trend of 1996, a narrow grouping of large capitalization stocks
pushed the stock market upward to record levels in mid-February. Concerns
about inflation, high valuations, narrowing margins, and shrinking profits
began to weigh on the minds of investors, causing a market decline in the end
of February. The correction accelerated with the Federal Reserve's decision to
raise the Federal Funds rate 1/4 of 1% in late March, and continued through
the end of the quarter. The downward price movement has been most severe in
the large capitalization stocks which had previously propelled the market
upward and in high-flying small capitalization stocks with astronomical price
to earnings ratios.
During the first half of the quarter, Scout Regional Fund lagged small
capitalization indexes because of the Fund's value orientation and significant
cash reserve; however, as the market tumbled late in March, the defensive
posture of the Fund began to reward its investors.
Many of the strong economic factors affecting the market are beginning to
deteriorate; this gradual weakening is expected to be favorable for the value
oriented Scout Regional Fund. The significant cash reserves in the Fund will
allow us to take advantage of buying opportunities when appropriate.
We appreciate you as a valued shareholder of Scout Regional Fund and
continually welcome your questions or comments.
Top 10 Equity Holdings
Market Percent
Value of Total
Petrolite Corp. $ 1,005,125 2.09%
Layne Christensen Co. 960,000 2.00%
NPC International Inc. 913,750 1.90%
Kellwood Co. 875,000 1.82%
BHA Group Inc. 803,000 1.67%
Bandag Inc. 755,625 1.57%
Donnelley R R & Sons Inc. 697,500 1.45%
Brunswick Corp. 671,875 1.40%
Southwestern Energy Co. 668,750 1.39%
Aliant Communictions, Inc. 660,000 1.37%
Top 10 Equity Holdings Total: $ 8,010,625 16.66%
Note: All market values based on 3/31/97 statement of assets.
GRAPH -- Sector Diversification
(Percent of Equity Holdings)
Sincerely,
/s/David B. Anderson
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, 1997
Market
Shares Company Value
COMMON STOCKS - 76.73%
BASIC MATERIALS - 8.64%
15,000 ACX Technologies 288,750
50,000 Amax Gold, Inc. 337,500
25,000 Cyprus Amax Minerals Co. 593,750
2,500 Deltic Timber Corp. 70,938
40,000 Huntco, Inc. Cl. A 485,000
25,000 Laclede Steel Co. 103,125
55,000 Lawter International, Inc. 639,375
10,000 Mallinckrodt Group, Inc. 411,250
20,000 Republic Group, Inc. 335,500
42,000 Safety-Kleen Corp. 619,500
7,000 Sigma-Aldrich Corp. 216,125
4,100,813
CAPITAL GOODS - 11.15%
15,000 Atchison Casting Co. 288,750
15,000 Baldor Electric 376,875
44,000 BHA Group, Inc 803,000
60,000 Green (A.P.) Industries Inc. 540,000
30,000 Harmon Industries, Inc. 511,875
75,000 Instituform Technologies Inc., Cl. A 450,000
64,150 Isco, Inc. 513,200
60,000 Layne Christensen Co. 960,000
50,000 MYR Group, Inc. 606,250
5,000 Paul Mueller Co. 189,375
10,000 Trion Inc. 51,250
5,290,575
COMSUMER CYCLICAL - 16.45%
65,000 B.I. Inc. 495,625
15,000 Bandag, Inc. 755,625
10,000 Block (H & R), Inc. 293,750
15,000 Brown Group, Inc. 249,375
15,000 Caseys General Stores, Inc. 288,750
25,000 Clarcor Inc. 578,125
6,000 Dillards Dept. Stores, Inc. Cl. A 189,000
20,000 Donnelley (R.R.) & Sons 697,500
20,000 First Alert, Inc. 57,500
37,925 Flexsteel Industries, Inc. 455,100
35,000 Kellwood Co. 875,000
25,000 Lawson Products 556,250
18,000 Lee Enterprises, Inc. 436,500
24,000 Maytag Corp. 495,000
35,000 O'Sullivan Industries Holdings, Inc. 441,875
18,000 Rival Co. 387,000
60,000 Stimsonite Corp. 360,000
58,000 Toastmaster Inc. 195,750
7,807,725
CONSUMER STAPLES - 15.05%
28,000 Alberto-Culver Co. Cl. A 623,000
30,000 Angelica Corp. 551,250
20,000 Beverly Enterprises, Inc. 285,000
25,000 Brunswick Corp. 671,875
5,000 Celestial Seasonings, Inc. 107,500
38,000 CPI Corp. 641,250
14,000 Medpartners, Inc. 297,500
25,000 Midwest Grain Products, Inc. 300,000
86,000 NPC International, Inc. Cl. B 913,750
40,000 Outboard Marine Corp. 593,375
80,000 Sanfilippo (John B & Son), Inc. 470,000
22,000 Sealright Co. 228,250
34,000 Stuart Entertainment, Inc. 133,875
85,000 TCBY Enterprises, Inc. 456,875
41,300 VICORP Restaurants, Inc. 526,575
50,000 Winnebago Industries, Inc. 343,750
7,143,825
ENERGY - 8.60%
7,500 Helmerich & Payne Inc. 346,875
10,000 Kerr-McGee Corp. 618,750
30,000 Maverick Tube Corp. 532,500
11,000 Murphy Oil Corp. 517,000
17,000 Petrolite Corp. 1,005,125
50,000 Southwestern Energy Co. 668,750
7,000 St. Mary Land & Exploration Co. 180,250
20,000 Total Petroleum North America Ltd. 210,000
4,079,250
FINANCIAL - 1.65%
10,000 Brenton Banks 277,500
1,260 Commerce Bancshares Inc. 57,487
1,000 Kansas City Life Insurance Co. 67,750
10,000 Old Republic International Corp. 256,250
2,500 Reinsurance Group of America, Inc. 121,250
780,237
TECHNOLOGY - 2.09%
3,500 DII Group Inc. 86,187
40,000 Fansteel, Inc. 270,000
35,000 Exabyte Corp. 424,375
6,000 Molex Inc. 213,000
993,562
TRANSPORTATION & SERVICE - 0.89%
22,500 Werner Enterprises, Inc. 421,875
UTILITIES - 12.21%
40,000 Aliant Communications, Inc. 660,000
10,000 Calenergy, Inc. 340,000
35,000 Empire District Electric Co. 621,250
15,000 IES Industries, Inc. 433,125
15,000 Interstate Power Co. 436,875
7,000 Kansas City Power & Light Co. 196,000
20,000 Laclede Gas Co. 417,500
15,000 Mapco, Inc. 465,000
30,000 St. Joseph Light & Power Co. 461,250
15,000 Union Electric Co. 553,125
2,400 Utilicorp United, Inc. 612,000
20,000 Western Resources, Inc. 600,000
5,796,125
TOTAL COMMON STOCK - 76.73% 36,413,987
Face Market
Amount Description Value
CONVERTIBLE CORPORATE BONDS - 0.78%
$ 371,000 Beverly Enterprises, Inc.
CV. Sub. Deb., 7.625%
due March 15, 2003 369,145
SHORT-TERM CORPORATE NOTES - 19.45%
500,000 Ameritech Corp.,
5.22%, due April 2, 1997 499,855
500,000 Archer-Daniels-Midland Co.,
5.28%, due April 3, 1997 499,780
500,000 Armstrong World Industries,
5.24%, due April 4, 1997 499,709
500,000 BellSouth Telecommunications,
5.21%, due April 2, 1997 499,855
500,000 du Pont (E.I.) de Nemours & Co.,
5.22%, due April 8, 1997 499,420
500,000 Emerson Electric Co.,
5.45%, due April 23, 1997 498,259
500,000 Engelhard Corp.,
5.47%, due April 21, 1997 498,404
500,000 Gannett Inc.,
5.28%, due April 4, 1997 499,707
500,000 General Mills Inc.,
5.32%, due April 18, 1997 498,670
500,000 General Re Corp.,
5.53%, due April 25, 1997 498,080
500,000 Gillette Co.,
5.27%, due April 10, 1997 499,268
750,000 Marsh & McLennan Cos. Inc.,
5.65%, due April 15, 1997 748,234
500,000 Marsh & McLennan Cos. Inc.,
5.60%, due April 28, 1997 497,822
500,000 Nalco Chemical Co.,
5.35%, due April 17, 1997 498,737
500,000 Penney (J.C.) Funding Corp.,
5.31%, due April 18, 1997 498,673
500,000 Pepsico Inc.,
5.27%, due April 9, 1997 499,341
500,000 Wisconsin Electric Power Co.,
5.50%, due April 11, 1997 499,160
500,000 Xerox Corp.,
5.30%, due April 14, 1997 498,970
TOTAL SHORT-TERM
CORPORATE NOTES - 19.45% 9,231,944
GOVERNMENT SPONSORED ENTERPRISES - 3.15%
500,000 Federal Home Loan Banks,
5.25%, due April 17, 1997 498,760
500,000 Federal National Mortgage
Association,
5.29%, due April 30, 1997 497,796
500,000 Federal National Mortgage
Association,
5.21%, due May 2, 1997 497,685
TOTAL GOVERNMENT
SPONSORED ENTERPRISES - 3.15% 1,494,241
REPURCHASE AGREEMENT - 1.07%
510,000 Northern Trust Co.,
6.20%, due April 1, 1997
(Collateralized by U.S.
Treasury Notes, 6.50%,
due May 15, 1997) 510,000
TOTAL INVESTMENTS - 101.18% $ 48,019,317
Other assets less liabilities - (1.18%) (559,837)
TOTAL NET ASSETS - 100.00%
(equivalent to $10.49 per share;
10,000,000 shares of $1.00 par
value capital shares authorized;
4,523,670 shares outstanding) $ 47,459,480
BASIS OF DETERMINING MARKET VALUE. Each investment is valued at the latest
sales price on March 31, 1997, 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
Elizabeth L. Allwood, Vice President
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
John G. Dyer, Vice President
Constance E. Martin, Vice President
Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson, 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
