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Previous: ZINN MICHAEL F, 3, 2000-03-06 |
Next: SCHWAB CAPITAL TRUST, 497, 2000-03-06 |
<PAGE>
Quarterly Report
December 31, 1999
Legg Mason
Investors
Trust, Inc.
U.S. Small-Cap
Value Trust
Navigator Class
LEGG
MASON
FUNDS
LOGO
The Art of Investing/SM/
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's quarterly
report for the Navigator Class of the U.S. Small-Cap Value Trust.
The following table summarizes key statistics for the Navigator Class of
shares of the Fund, as of December 31, 1999:
<TABLE>
<CAPTION>
3-Month 12-Month
Total Return/1/ Total Return/1/
--------------- ---------------
<S> <C> <C>
U.S. Small-Cap Value Trust -1.52% -4.05%
S&P 500 Stock Composite Index +14.88% +21.04%
Russell 2000 Index +18.44% +21.26%
</TABLE>
On the following pages, the portfolio managers for the Fund discuss the
investment outlook. Long-term investment results are shown in the "Performance
Information"section of this report.
We are pleased to report that Legg Mason has made a seamless transition into
the new century. Our critical internal and external systems are operating free
of Y2K disruptions. Internal and external operations, including the Fund's
custodian and transfer agency, are running smoothly, and Fund shareholders are
receiving uninterrupted account maintenance and transaction support.
Sincerely,
/s/ Edward A. Taber, III
---------------------------
Edward A. Taber, III
President
January 28, 2000
- ----------
/1/ Total return measures investment performance in terms of appreciation or
depreciation in net asset value per share plus dividends and any capital
gain distributions. It assumes that dividends and distributions were
reinvested at the time they were paid.
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the portfolio returned -1.5%, compared to gains of +1.5% for
the Russell 2000 Value, +18.4% for the Russell 2000 and +14.9% for the S&P 500.
For 1999, the portfolio was off -4.1%, compared to returns of -1.5% for the
Russell 2000 Value, +21.3% for the Russell 2000 and +21.0% for the S&P 500.
In the fourth quarter, the U.S. equity markets surged higher, led by
extraordinary returns in the technology sector. Interest rates continued to
rise, with the U.S. long bond approaching a yield of +6.5%, up from +5.0% as the
year started. Despite this rate increase, strong consumer confidence and
investor optimism about technology spending, particularly on Internet
infrastructure, drove market indices to new highs. The market's breadth was very
weak; although the Russell 2000 climbed +21.3% for the year, less than half the
stocks in the index (as of January 1, 1999) had positive returns. Market
strength was concentrated in growth stocks, and value lagged due to investor
disinterest. This market environment can also be distinguished by its
volatility. The impact of this volatility was seen in the second quarter, when
our small-cap stocks soared by over 20%, only to give most, if not all, of that
back in the third and fourth quarters. We think such surges are likely in the
future and we are confident that our stocks have the fundamental strength to
consolidate such future surges.
For the fourth quarter and the year, the technology sector accounted for most
of the portfolio's under-performance versus most benchmarks. Our disciplined
value approach has kept our portfolios under-weighted in technology stocks given
their steep current valuations, yet investors have had a nearly insatiable
appetite for these stocks. Rapid developments in the Internet and related
communication industries have attracted investors who often have little apparent
regard for reasonable fundamental expectations. As a result, prices and
valuations in this sector have skyrocketed at an unprecedented pace. Even when a
group's stock momentum slows due to a realization that valuations have exceeded
the fundamentals, as with Internet retailers in December, another technology
sector becomes hot, such as business-to-business Internet, semiconductors and
Linux stocks of late. Without the strong return from its approximate 20%
weighting in technology, the Russell 2000's 21.3% actual return for the year
would have fallen to just 3.6%! The portfolio's health care investments were the
other major source of poor relative performance versus the benchmarks. Although
we had only a small weighting in hospitals, HMOs, nursing homes and
rehabilitation centers, the stocks have dropped very dramatically due to radical
changes in Medicare reimbursement. These stocks rallied late in the quarter as
Congress passed helpful regulatory changes.
For the quarter, the portfolio's low weighting in financial stocks,
particularly the banks, was the biggest positive contributor to relative
performance. Rising interest rates drove down stocks in this group, which had
been priced at expensive valuations. For the year, the oil services area was
among the portfolio's best performing sectors and the strongest contributor to
performance. When oil prices fell to $12/barrel late last year, these stocks
also fell to very low valuations and we raised our holdings in the group. As oil
prices rose, these stocks rallied dramatically. The retail and consumer product
sectors also provided a positive contribution to the portfolio as strong
consumer spending helped these stocks. Despite investor concerns about the
economy's sustainability, continued economic growth also helped our significant
cyclical holdings in trucking, steels, chemicals and textiles.
Small-cap value stocks continue to be valued at significant discounts to the
rest of the U.S. equity market. The valuation spread between small-cap value and
growth as well as small and large stocks
2
<PAGE>
Portfolio Managers' Comments -- Continued
U.S. Small-Capitalization Value Trust -- Continued
stands at unprecedented levels. As 1999 ended, investors were focused almost
exclusively on Internet stocks because of their rapid growth in revenues, if not
profits. We have identified several potential catalysts for the realization of
the extraordinary opportunity we believe to be available in small-cap value
stocks. First, any decline in the Internet euphoria followed by a more realistic
examination of stock prices relative to fundamental results will benefit our
style. Such was the case when a similar, albeit smaller, technology surge ended
in 1996. Second, the dramatic rise in mergers, acquisitions and stock buy-backs
within our holdings indicates that corporate decision-makers are confirming that
our stocks' business fundamentals do not justify the current valuation
discounts. Finally, we feel global economic stabilization and recovery should
benefit our stocks, as demonstrated in the second quarter when the portfolio
excelled in an environment where investors focused on the improving global
outlook. We appreciate your continued trust and are confident that our style
will once again return to favor.
As always, we welcome the opportunity to discuss the portfolio and this report
in more detail. If you have any questions or comments, please feel free to
contact us.
Henry F. Otto Steven M. Tonkovich
Managing Director Managing Director
January 21, 2000
DJIA 11251.70
3
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year and Life of Class, as of December 31, 1999
The returns shown are based on historical results and are not intended to
indicate future performance. Total return measures investment performance in
terms of appreciation or depreciation in net asset value per share plus
dividends and any capital gain distributions. It assumes that dividends and
distributions were reinvested at the time they were paid. The investment
return and principal value of an investment in the Fund will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. Average annual returns tend to smooth out variations in
a Fund's return, so that they differ from actual year-to-year results. No
adjustment has been made for any income taxes payable by shareholders.
Each Fund of the Legg Mason Investors Trust offers two classes of
shares:Primary Class and Navigator Class. Information about the Primary
Class, offered to retail investors, is contained in a separate report to its
shareholders. The Navigator Class shares of American Leading Companies were
redeemed on December 3, 1998. The Navigator Class of Balanced Trust has not
commenced operations.
The Fund's total returns as of December 31, 1999, were as follows:
U.S. Small-Cap
Value Trust
-------------------------------------------------
Average Annual Total Return
Navigator Class:
One Year -4.05%
Life of Class/A/ -10.44%
Cumulative Total Return
Navigator Class:
One Year -4.05%
Life of Class/A/ -15.56%
-------------------------------------------------
/A/ The inception date for the Navigator Class of U.S. Small-Cap Value
Trust was June 19, 1998.
4
<PAGE>
Performance Information -- Continued
U.S. Small-Capitalization Value Trust
Selected Portfolio Performance
Strong performers for the 4th quarter 1999*
---------------------------------------------------
1. Boundless Corporation +106.2%
2. JWGenesis Financial Corp. +83.7%
3. Nu Horizons Electronics Corp. +73.8%
4. Conso International Corporation +68.3%
5. Curative Health Services, Inc. +63.2%
6. Personnel Group of America, Inc. +62.0%
7. Consumer Portfolio Services, Inc. +61.3%
8. Catherines Stores Corporation +60.0%
9. Paravant Inc. +56.8%
10. Cobra Electronics Corporation +54.9%
Weak performers for the 4th quarter 1999*
---------------------------------------------------
1. Styling Technology Corporation -70.9%
2. Frontier Insurance Group, Inc. -60.7%
3. Fruit Of The Loom, Inc. -56.6%
4. Acceptance Insurance
Companies Inc. -54.4%
5. AMRESCO, INC. -53.1%
6. CareMatrix Corporation -51.8%
7. Pediatrix Medical Group, Inc. -49.5%
8. Decorator Industries, Inc. -48.8%
9. GenCorp Inc. -46.1%
10. Smithway Motor Xpress Corp. -44.5%
* Securities held for the entire quarter.
Portfolio Changes
Top 10 securities added during the 4th quarter 1999/+/
-------------------------------------------------------
AK Steel Holding Corporation
Wisconsin Central Transportation Corporation
Ogden Corporation
The Standard Register Company
Group Maintenance America Corp.
Department 56, Inc.
Trammell Crow Company
Pharmaceutical Product Development, Inc.
Bay View Capital Corporation
Aviation Sales Company
/+/ Ranked using market values calculated as of December 31, 1999.
Top 10 securities sold during the 4th quarter 1999/++/
-------------------------------------------------------
USFreightways Corporation
Varco International, Inc.
Pride International, Inc.
Cable Design Technologies Corporation
Foremost Corporation of America
The Dexter Corporation
Kennametal Inc.
Georgia Gulf Corporation
MagneTek, Inc.
Harman International Industries, Incorporated
/++/ Ranked using market values calculated as of September 30, 1999.
5
<PAGE>
Portfolio of Investments
Legg Mason Investors Trust, Inc.
December 31, 1999 (Unaudited)
(Amounts in Thousands)
U.S. Small-Capitalization Value Trust
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks and Equity Interests -- 97.5%
Aerospace/Defense -- 1.6%
Alliant Techsystems Inc. 5 $ 293/A/
Aviation Sales Company 10 168/A/
AVTEAM, Inc. 8 42/A/
EDO Corporation 4 24
GenCorp Inc. 13 132
Herley Industries, Inc. 3 43/A/
International Airline Support Group, Inc. 2 6/A/
Kaman Corporation 16 207
Kellstrom Industries, Inc. 8 74/A/
Ladish Co., Inc. 9 59/A/
SIFCO Industries, Inc. 3 22
-------
1,070
-------
Apparel -- 3.4%
Bernard Chaus, Inc. 15 36/A/
Cache, Inc. 2 13/A/
Catherines Stores Corporation 5 99/A/
Fruit Of The Loom, Inc. 14 20/A/
Garan, Incorporated 4 106
Genesco Inc. 19 244/A/
Goody's Family Clothing, Inc. 25 132/A/
Hartmarx Corporation 8 32/A/
Kellwood Company 19 369
Maxwell Shoe Company Inc. 6 48/A/
Nautica Enterprises, Inc. 37 421/A/
One Price Clothing Stores, Inc. 7 19/A/
Oxford Industries, Inc. 6 113
Paul Harris Stores, Inc. 8 22/A/
Perry Ellis International, Inc. 4 43/A/
PremiumWear, Inc. 1 6/A/
S&K Famous Brands, Inc. 3 19/A/
Shoe Pavilion, Inc. 5 10/A/
Sport-Haley, Inc. 3 10/A/
Superior Uniform Group Inc. 1 12
Syms Corp. 8 39/A/
Tandy Brands Accessories, Inc. 3 44/A/
The Cato Corporation 12 152
The Dress Barn, Inc. 17 274/A/
-------
2,283
-------
</TABLE>
6
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Automotive -- 2.8%
Arvin Industries, Inc. 17 $ 468
Autocam Corporation 2 44
Bandag, Incorporated 12 308
Bandag, Incorporated Class A 4 77
Barnes Group Inc. 12 199
Collins Industries, Inc. 5 24
Dura Automotive Systems, Inc. 12 206/A/
Edelbrock Corporation 2 29
Featherlite Inc. 4 20/A/
Hayes Lemmerz International, Inc. 1 19/A/
Monaco Coach Corporation 6 155/A/
R & B, Inc. 6 26/A/
Simpson Industries, Inc. 14 153
Strattec Security Corporation 2 74/A/
TBC Corporation 15 91/A/
-------
1,893
-------
Broadcast/Media -- 0.1%
Courier Corporation 2 36
-------
Chemicals -- 3.3%
A. Schulman, Inc. 19 312
Aceto Corporation 1 10
Albemarle Corporation 13 251
American Vanguard Corporation 1 6
Balchem Corporation 3 24
Chemfab Corporation 1 9/A/
Ethyl Corporation 85 334
Hawkins Chemical, Inc. 3 26
International Specialty Products Inc. 22 202/A/
NL Industries, Inc. 39 586
Northern Technologies International Corporation 2 17
Omnova Solutions Inc. 13 104
Quaker Chemical Corporation 7 96
Stepan Company 7 171
Sybron Chemicals Inc. 4 46/A/
The General Chemical Group Inc. 15 35
-------
2,229
-------
Commercial/Industrial Services -- 8.1%
ADVO, Inc. 16 378/A/
Alternative Resources Corporation 5 28/A/
ASI Solutions Incorporated 4 19/A/
Avis RentACar, Inc. 21 542/A/
BCT International, Inc. 3 5/A/
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial/Industrial Services -- Continued
Bell Microproducts Inc. 7 $ 73/A/
Billing Concepts Corp. 13 86/A/
Business Resource Group 1 5/A/
Butler International, Inc. 7 75/A/
Butler Manufacturing Company 5 109
Cadmus Communications Corporation 5 40
Cameron Ashley Building Products, Inc. 6 64/A/
Carriage Services, Inc. 11 64/A/
CDI Corp. 14 328/A/
Children's Comprehensive Services, Inc. 5 29/A/
Corrpro Companies 5 31/A/
CORT Business Services Corporation 7 119/A/
Electro Rent Corporation 6 70/A/
Ellett Brothers, Inc. 5 36
Ennis Business Forms, Inc. 12 95
Exponent, Inc. 3 23/A/
FiberMark, Inc. 5 62/A/
Franklin Covey Co. 16 118/A/
FTI Consulting, Inc. 3 15/A/
General Employment Enterprises, Inc. 4 16
Gradco Systems, Inc. 5 7/A/
GRC International, Inc. 3 39/A/
Group Maintenance America Corp. 26 273/A/
Headway Corporate Resources, Inc. 5 20/A/
Health Management Systems, Inc. 12 75/A/
Healthcare Services Group, Inc. 8 52/A/
Interstate National Dealer Services, Inc. 3 19/A/
Lawson Products, Inc. 6 134
Mail-Well, Inc. 17 225/A/
Mercury Air Group, Inc. 6 45/A/
Nash-Finch Company 5 33
National Technical Systems, Inc. 6 24
Ogden Corporation 34 401
Perini Corporation 4 16/A/
Personal Group Of America, Inc. 20 201/A/
PrimeSource Corporation 4 17
Refac 3 10/A/
RemedyTemp, Inc. 7 125/A/
Robertson-Ceco Corporation 4 37/A/
Rush Enterprises, Inc. 2 22/A/
Schawk, Inc. 10 83
Service Experts, Inc. 12 70/A/
SOS Staffing Services, Inc. 10 42/A/
</TABLE>
8
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial/Industrial Services -- Continued
Staff Leasing, Inc. 15 $ 142/A/
Star Buffet, Inc. 2 7/A/
Stewart Enterprises, Inc. 74 353
The Standard Register Company 15 298
Thomas Group, Inc. 3 36/A/
USEC Inc. 2 17
Vestcom International, Inc. 7 23/A/
Wallace Computer Services, Inc. 1 18
Westaff, Inc. 12 97/A/
-------
5,391
-------
Computer Services and Systems -- 1.9%
ANSYS, Inc. 6 65/A/
Avant! Corporation 24 363/A/
Boundless Corporation 3 25/A/
CfI ProServices Inc. 4 31/A/
Cotelligent, Inc. 1 8/A/
MTS Systems Corporation 14 110
NeoMagic Corporation 20 213/A/
Paravant Inc. 1 5/A/
PSC Inc. 9 66/A/
Software Spectrum, Inc. 3 49/A/
Structural Dynamics Research Corporation 25 312/A/
-------
1,247
-------
Construction and Building Materials -- 9.0%
American Homestar Corporation 14 54/A/
Ameron International Corporation 3 103
Aztec Manufacturing Co. 4 50
Baltek Corporation 1 4/A/
Beazer Homes USA, Inc. 6 118/A/
Building Materials Holding Corporation 9 88/A/
Cavalier Homes, Inc. 14 53
Champion Enterprises, Inc. 27 230/A/
Craftmade International, Inc. 5 37
D.R.Horton, Inc. 33 455
Dayton Superior Corporation 4 59/A/
Del Webb Corporation 14 342/A/
Dominion Homes, Inc. 4 25/A/
Drew Industries Incorporated 9 77/A/
Engle Homes, Inc. 8 97
Fleetwood Enterprises, Inc. 22 446
Homebase, Inc. 23 71/A/
Hovnanian Enterprises, Inc. 16 103/A/
Hughes Supply, Inc. 16 354
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Construction and Building Materials -- Continued
International Aluminum Corporation 2 $ 54
JLK Direct Distribution Inc. 17 172/A/
M/I Schottenstein Homes, Inc. 6 93
Mcgrath Rentcorp 8 131
Meadow Valley Corporation 2 9/A/
Miller Building Systems, Inc. 2 7/A/
NCI Building Systems, Inc. 13 233/A/
Palm Harbor Homes, Inc. 12 207/A/
Patrick Industries, Inc. 4 32
Pulte Corporation 36 801
Republic Group Incorporated 7 112
Skyline Corporation 7 160
Southern Energy Homes, Inc. 9 20/A/
Standard Pacific Corp. 22 244
The Ryland Group, Inc. 11 258
Toll Brothers, Inc. 25 458/A/
U.S. Home Corporation 9 238/A/
Washington Homes, Inc. 5 27/A/
-------
6,022
-------
Consumer Durables -- 2.6%
Boston Acoustics, Inc. 4 52
Catalina Lighting, Inc. 3 13/A/
Central Garden & Pet Company 21 219/A/
Chromcraft Revington, Inc. 8 84/A/
Cobra Electronics Corporation 3 17/A/
Congoleum Corporation 6 25/A/
Conso International Corporation 5 43/A/
Department 56, Inc. 12 269/A/
Fedders Corporation 20 111
Flexsteel Industries, Inc. 4 55
Home Products International, Inc. 6 57/A/
Koss Corporation 2 33/A/
LADD Furniture, Inc. 3 59/A/
Lifetime Hoan Corporation 7 37
Mikasa, Inc. 8 76
Pulaski Furniture Corporation 2 28
Royal Appliance Mfg. Co. 1 7/A/
Russ Berrie and Company, Inc. 14 368
The L. S. Starrett Company 4 94
The Rowe Companies 10 85
The York Group, Inc. 6 28
-------
1,760
-------
</TABLE>
10
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Non-Durables -- 0.5%
French Fragrances, Inc. 10 $ 67/A/
Nature's Sunshine Products, Inc. 13 107
Ocular Sciences, Inc. 5 96/A/
Rural/Metro Corporation 11 47/A/
Styling Technology Corporation 2 7/A/
-------
324
-------
Electrical Equipment and Electronics -- 2.3%
Acme Electric Corporation 3 17/A/
Axsys Technologies, Inc. 2 30/A/
Caere Corporation 8 61/A/
Detection Systems, Inc. 3 29/A/
Graham Corporation 1 7/A/
InaCom Corp. 31 227/A/
Microsemi Corporation 4 38/A/
Nu Horizons Electronics Corp. 7 92/A/
Percon Incorporated 3 43/A/
Pioneer-Standard Electronics, Inc. 18 260
Powell Industries, Inc. 8 55/A/
Richardson Electronics, Ltd. 8 63
Savoir Technology Group, Inc. 9 61/A/
The Cherry Corporation 5 51/A/
The Lamson & Sessions Co. 8 37/A/
Triumph Group, Inc. 9 215/A/
UCAR International, Inc. 14 242/A/
Woodhead Industries, Inc. 2 26
-------
1,554
-------
Entertainment and Leisure -- 3.9%
Anchor Gaming 8 356/A/
Arctic Cat, Inc. 20 204
Black Hawk Gaming & Development Company, Inc. 3 16/A/
Boyd Gaming Corporation 45 260/A/
Cannondale Corporation 6 38/A/
Dave & Busters, Inc. 9 74/A/
GTECH Holdings Corporation 25 539/A/
Johnson Worldwide Associates Inc. 6 40/A/
K2 Inc. 12 94
Lady Luck Gaming Corporation 3 31/A/
Lakes Gaming, Inc. 8 61/A/
Lodgian, Inc. 19 95/A/
PlayCore, Inc. 3 25/A/
Prime Hospitality Corp. 41 365/A/
Scientific Games Holdings Corp. 8 136/A/
Silverleaf Resorts, Inc. 3 21/A/
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Entertainment and Leisure -- Continued
Suburban Lodges of America, Inc. 12 $ 60/A/
Travis Boats & Motors, Inc. 1 17/A/
Winnebago Industries, Inc. 7 148
-------
2,580
-------
Financial Services -- 7.5%
Advanta Corp. 18 323
Alliance Bancorp of New England, Inc. 1 9
Amplicon, Inc. 6 71
AMRESCO, INC. 37 51/A/
Arcadia Financial Ltd. 28 125/A/
Bank United Corp. 1 30
BankAtlantic Bancorp, Inc. 29 118
Bay View Capital Corporation 13 182
BNC Mortgage, Inc. 4 24/A/
BSB Bancorp, Inc. 7 131
BYL Bancorp 2 14
Camco Financial Corporation 1 14
Community Bank System, Inc. 2 46
Conning Corporation 9 76
Consumer Portfolio Services 10 15/A/
Corrus Bankshares, Inc. 11 262
Credit Acceptance Corporation 10 38/A/
Delta Financial Corporation 11 43/A/
Downey Financial Corp. 12 234
DVI, Inc. 3 47/A/
Enhance Financial Services Group, Inc. 29 463
Fidelity National Financial, Inc. 23 333
First Alliance Corporation 14 27/A/
First Citizens Bancshares Inc. 6 412
First Essex Bancorp, Inc. 2 32
First Republic Bank 3 73/A/
FirstFed Financial Corp. 14 202/A/
Flagstar Bancorp, Inc. 9 162
GA Financial, Inc. 4 48
GBC Bancorp 2 39
Hamilton Bancorp Inc. 8 133/A/
Hawthorne Financial Corporation 4 45/A/
Interpool, Inc. 19 140
ISB Financial Corporation 5 65
ITLA Capital Corporation 5 62/A/
Jefferies Group, Inc. 6 136
JWGenesis Financial Corp. 2 59/A/
Matrix Bancorp, Inc. 2 18/A/
</TABLE>
12
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial Services -- Continued
Merchants Bancshares, Inc. 3 $ 60
MetroWest Bank 4 24
National City Bancorporation 7 111/A/
Pacific Crest Capital, Inc. 2 26
Parkvale Financial Corporation 5 75
Resource Bancshares Mortgage Group, Inc. 17 77
Sterling Financial Corporation 6 70/A/
Sunrise International Leasing Corporation 5 28/A/
TFC Enterprises, Inc. 10 36/A/
Union Acceptance Corporation 1 8/A/
USBANCORP, Inc. 10 118
World Acceptance Corporation 14 68/A/
-------
5,003
-------
Food, Beverage and Tobacco -- 3.0%
Cagle's, Inc. 4 41
Fresh America Corporation 3 13/A/
General Cigar Holdings, Inc. 18 151/A/
Herbalife International, Inc. 21 308
M&F Worldwide Corp. 14 71/A/
Marsh Supermarkets, Inc. 3 47
Michael Foods, Inc. 11 281
Natural Alternatives International, Inc. 4 14/A/
Pilgrim's Pride Corporation 8 66
Pilgrim's Pride Corporation Class A 4 25
R.H. Phillips, Inc. 4 9/A/
Sanderson Farms, Inc. 10 81
Scheid Vineyards Inc. 4 13
Schweitzer-Mauduit International, Inc. 12 160
Standard Commercial Corporation 9 31
Suprema Specialties, Inc. 1 9/A/
Sylvan, Inc. 3 25/A/
Todhunter International, Inc. 2 18/A/
Universal Corporation 25 564
WLR Foods, Inc. 12 71/A/
-------
1,998
-------
Gas/Pipeline -- 1.7%
Adams Resources & Energy 3 23
EnergySouth, Inc. 3 56
Friede Goldman International Inc. 16 111/A/
Gulf Islands Fabrication, Inc. 8 79/A/
Lufkin Industries, Inc. 2 34
Penn Virginia Corporation 6 106
Petroleum Development Corporation 5 19/A/
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Gas/Pipeline -- Continued
SEACOR Smit Inc. 10 $ 497/A/
Seitel, Inc. 17 111/A/
World Fuel Services Corporation 9 64
-------
1,100
-------
Health Care -- 3.8%
Alterra Healthcare Corporation 15 126/A/
American Dental Technologies, Inc. 5 8/A/
American Physicians Service Group, Inc. 2 6/A/
AmeriPath, Inc. 16 129/A/
Beverly Enterprises, Inc. 77 336/A/
Capital Senior Living Corporation 14 68/A/
Carematrix Corporation 12 31/A/
Castle Dental Centers, Inc. 5 14/A/
Coast Dental Services, Inc. 6 14/A/
Curative Health Services, Inc. 7 53/A/
Genesis Health Ventures, Inc. 24 50/A/
Healthcare Recoveries, Inc. 7 25/A/
Hi-Tech Pharmacal Co., Inc. 2 10/A/
Horizon Health Corporation 4 29/A/
Lifemark Corporation 2 5/A/
Medstone International, Inc. 4 18/A/
Mesa Laboratories, Inc. 2 7/A/
MIM Corporation 13 33/A/
Monarch Dental Corporation 7 12/A/
Moore Medical Corporation 2 21/A/
Omnicare, Inc. 62 748
OrthAlliance, Inc. 5 31/A/
Pediatrix Medical Group, Inc. 11 74/A/
Pharmaceutical Product Development, Inc. 17 200/A/
ProMedCo Management Company 16 46/A/
Radiologix, Inc. 15 66/A/
Raytel Medical Corporation 6 18/A/
RehabCare Group, Inc. 4 93/A/
Serologicals Corporation 15 89/A/
Sierra Health Services, Inc. 20 135/A/
Total Renal Care Holdings, Inc. 1 7/A/
USANA, Inc. 2 10/A/
Utah Medical Products, Inc. 3 22/A/
-------
2,534
-------
Industrial -- 4.4%
ACX Technologies, Inc. 20 212/A/
American Biltrite, Inc. 3 36
Ampco-Pittsburgh Corporation 7 67
</TABLE>
14
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial -- Continued
Bairnco Corporation 6 $ 33
Baldwin Technology Company, Inc. 13 28/A/
Cascade Corporation 9 80
Channell Commercial Corporation 5 56/A/
Chart Industries, Inc. 3 11
Commercial Intertech Corp. 11 138
CPAC, Inc. 4 30
Detroit Diesel Corporation 9 180
Farrel Corporation 3 5
Gehl Company 4 63/A/
Gentek, Inc. 15 159
Gleason Corporation 6 139
Hardinge, Inc. 2 31
Holly Corporation 6 83
Industrial Holdings, Inc. 5 13/A/
Lincoln Electric Holdings, Inc. 4 74
Lydall, Inc. 4 28/A/
Milacron Inc. 28 427
O.I. Corporation 2 8/A/
Regal-Beloit Corporation 13 272
Specialty Equipment Companies, Inc. 8 196/A/
Summa Industries 3 34/A/
Supreme Industries, Inc. 8 52/A/
TB Wood's Corporation 4 34
Tech/Ops Sevcon, Inc. 2 23
The Carbide/Graphite Group, Inc. 6 37/A/
Watts Industries, Inc. 20 288
Woodward Governor Company 4 116
-------
2,953
-------
Insurance -- 7.0%
Acceptance Insurance Companies Inc. 11 62/A/
ACE Limited 15 247
AmerUs Life Holdings, Inc. 22 506
Amwest Insurance 3 18
Atlantic American Corporation 1 3/A/
Bancinsurance Corporation 2 13/A/
Delphi Financial Group, Inc. 14 423/A/
Donegal Group Inc. 6 40
Fremont General Corporation 48 353
Frontier Insurance Group, Inc. 27 93
Harleysville Group Inc. 22 312
HCC Insurance Holdings, Inc. 2 22
Kaye Group Inc. 4 37
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance -- Continued
LandAmerica Financial Group, Inc. 9 $ 169
Merchants Group, Inc. 1 20
MMI Companies, Inc. 13 113
National Western Life Insurance Company 3 179/A/
Nymagic, Inc. 3 44
Penn Treaty American Corporation 6 90/A/
Professionals Group, Inc. 4 103/A/
Reliance Group Holdings, Inc. 78 524
Selective Insurance Group, Inc. 2 41
Standard Management Corporation 5 23/A/
Stewart Information Services Corporation 11 141
The Commerce Group, Inc. 26 682
The Midland Company 3 71
The Navigators Group, Inc. 6 61/A/
Trenwick Group Inc. 12 209
Unico American Corporation 4 29
-------
4,628
-------
Metals -- 5.9%
AK Steel Holding Corporation 30 564
Alltrista Corporation 6 128/A/
Amcast Industrial Corporation 7 113
Atchison Casting Corporation 5 49/A/
Bayou Steel Corporation 9 37/A/
Carpenter Technology Corporation 21 587
Chase Industries, Inc. 11 89/A/
Commercial Metals Company 11 373
Fansteel Inc. 5 19/A/
Friedman Industries, Incorporated 5 15
Intermet Corporation 19 216
Lindberg Corporation 4 28
Metals USA, Inc. 28 238/A/
Niagara Corporation 5 23/A/
Northwest Pipe Company 4 62/A/
Oglebay Norton Company 3 78
Quanex Corporation 10 263
Roanoke Electric Steel Corporation 3 54
ROHN Industries, Inc. 16 46/A/
Shiloh Industries, Inc. 4 44/A/
Steel Technologies Inc. 8 110
Texas Industries, Inc. 15 617
Universal Stainless & Alloy Products, Inc. 1 6/A/
Webco Industries, Inc. 4 15/A/
</TABLE>
16
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Metals -- Continued
Wolverine Tube, Inc. 10 $ 144/A/
Zemex Corporation 3 24/A/
-------
3,942
-------
Miscellaneous Manufacturing -- 6.1%
A.O. Smith Corporation 9 195
Apogee Enterprises, Inc. 6 31
Bacou USA, Inc. 8 125/A/
Badger Paper Mills, Inc. 2 8/A/
Brown & Sharpe Manufacturing Company 10 21/A/
CIRCOR International, Inc. 10 101/A/
Coachmen Industries Inc. 11 172
Columbus McKinnon Corporation 10 100
Core Materials Corporation 2 4/A/
Cybex International, Inc. N.M. 1/A/
Decora Industries, Inc. 3 9/A/
Denali Incorporated 3 9/A/
Global Payment Technologies, Inc. 6 56/A/
Griffon Corporation 23 178/A/
Hexcel Corporation 25 139/A/
Jason Incorporated 11 77/A/
Mark IV Industries, Inc. 1 23
MascoTech, Inc. 34 429
Met-Pro Corporation 2 22
Metrika Systems Corporation 4 24/A/
NACCO Industries, Inc. 6 339
NCH Corporation 2 107
OroAmerica, Inc. 4 24/A/
Park-Ohio Holdings Corp. 7 65/A/
Penn Engineering & Manufacturing Corp. 4 97
Penn Engineering & Manufacturing Corp., Class A 4 93
Precision Castparts Corp. 17 438
Printronix, Inc. 4 91/A/
Q.E.P. Co., Inc. 2 15/A/
Raven Industries, Inc. 4 51
Riviera Tool Company 1 6/A/
Robbins & Myers, Inc. 1 11
SPS Technologies, Inc. 6 182/A/
Standard Motor Products, Inc. 9 145
Standex International Corporation 8 172
The Eastern Company 1 21
The JPM Company 4 28/A/
TransTechnology Corporation 4 43
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Miscellaneous Manufacturing -- Continued
Westinghouse Air Brake Company 23 $ 406
Williams Controls, Inc. 5 10/A/
-------
4,068
-------
Process Industries -- 1.4%
Buckeye Technologies Inc. 27 394/A/
Rock-Tenn Company 22 323
Silgan Holdings Inc. 13 174/A/
The Anderson's Inc. 6 50
-------
941
-------
Real Estate -- 0.6%
AMREP Corporation 5 23/A/
Bluegreen Corporation 17 87/A/
DeWolfe Companies, Inc. 2 15/A/
Saxton Incorporated 3 7/A/
Trammell Crow Company 21 245/A/
-------
377
-------
Restaurants -- 2.0%
Ark Restaurants Corp. 3 23/A/
CKE Restaurants, Inc. 39 226
Cooker Restaurant Corporation 6 18
ELXSI Corporation 3 32/A/
Landry's Seafood Restaurants, Inc. 22 190/A/
Lone Star Steakhouse & Saloon, Inc. 24 213/A/
Luby's, Inc. 15 174
Main Street & Main Inc. 8 24/A/
Max & Erma's Restaurants, Inc. 2 13/A/
Rainforest Cafe, Inc. 19 73/A/
Ryan's Family Steak Houses, Inc. 29 246/A/
Schlotzsky's, Inc. 5 34/A/
Sizzler International, Inc. 19 49/A/
-------
1,315
-------
Retail -- 4.4%
A.C. Moore Arts & Crafts, Inc. 5 30/A/
Barnett Inc. 12 127/A/
Boise Cascade Office Products Corporation 16 244/A/
Cole National Corporation 11 55/A/
Duckwall-ALCO Stores, Inc. 4 27/A/
EZCORP, Inc. 7 30
Finlay Enterprises, Inc. 7 103/A/
Friedman's, Inc. 13 94
Funco, Inc. 3 37/A/
Government Technology Services Inc. 2 6/A/
</TABLE>
18
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail -- Continued
Jan Bell Marketing, Inc. 18 $ 52/A/
Jos. A. Bank Clothiers, Inc. 4 11/A/
Media Arts Group, Inc. 9 30/A/
Michael Anthony Jewelers, Inc. 2 5/A/
Micro Warehouse, Inc. 18 333/A/
Movie Star, Inc. 9 8/A/
Musicland Stores Corporation 12 98/A/
OfficeMax, Inc. 85 466/A/
Pier 1 Imports, Inc. 66 421
Piercing Pagoda, Inc. 3 48/A/
RDO Equipment Co. 8 45/A/
7 Eleven Incorporated 68 121/A/
ShopKo Stores, Inc. N.M. 5/A/
Specialty Catalog Corp. 1 5/A/
Sport Supply Group, Inc. 3 20/A/
Systemax, Inc. 24 205/A/
The Bon-Ton Stores, Inc. 12 42/A/
Tractor Supply Company 2 30/A/
Wilmar Industries, Inc. 10 172/A/
Wolohan Lumber Co. 3 39
-------
2,909
-------
Technology -- 0.4%
Del Global Technologies Corp. 5 41/A/
Equinox Systems, Inc. 2 18/A/
Hurco Companies, Inc. 4 15/A/
K-Tron International, Inc. 2 28/A/
Splash Technology Holdings, Inc. 11 93/A/
ThermoQuest Corporation 6 65/A/
-------
260
-------
Telecommunications -- 1.3%
Applied Signal Technology, Inc. 6 81
Blonder Tongue Laboratories, Inc. 6 27/A/
CellStar Corporation 51 504/A/
Comdial Corporation 5 50/A/
Communications Systems, Inc. 2 25
Generale Cable Corporation Delaware New 3 26
Superior TeleCom Inc. 9 136
-------
849
-------
Textiles -- 1.2%
Burlington Industries, Inc. 45 180/A/
Decorator Industries, Inc. 2 12
Guilford Mills, Inc. 7 49
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Textiles -- Continued
Interface, Inc. 40 $ 228
Lakeland Industries, Inc. 1 4/A/
Pillowtex Corporation 11 66
The Dixie Group, Inc. 9 66/A/
UniFirst Corporation 12 156
WestPoint Stevens Inc. 1 24
-------
785
-------
Transportation -- 6.1%
Alaska Air Group, Inc. 1 32/A/
Amerco 10 252/A/
America West Holdings Corporation 31 639/A/
Amtran, Inc. 2 33/A/
Arkansas Best Corporation 14 170/A/
Arnold Industries, Inc. 19 262
Boyd Bros. Transportation Inc. 2 14/A/
Consolidated Delivery & Logistics, Inc. 5 18/A/
Consolidated Freightways Corporation 17 135/A/
Covenant Transport, Inc. 11 195/A/
Dynamex Inc. 2 4/A/
Frozen Food Express Industries, Inc. 9 35
Genesee & Wyoming Inc. 3 37/A/
Hawaiian Airlines, Inc. 28 60/A/
Kitty Hawk, Inc. 12 84/A/
Landstar System, Inc. 3 128/A/
Midway Airlines Corporation 6 37/A/
Offshore Logistics, Inc. 16 148/A/
Old Dominion Freight Line, Inc. 5 56/A/
P.A.M. Transportation Services, Inc. 6 68/A/
Pittison BAX Group 14 153
RailTex, Inc. 7 125/A/
Roadway Express, Inc. 15 322
Smithway Motor Xpress Corp. 3 11/A/
The Greenbrier Companies, Inc. 11 92
Tower Air, Inc. 9 11/A/
Transport Corporation of America, Inc. 5 60/A/
U.S. Xpress Enterprises, Inc. 11 82/A/
USA Truck, Inc. 6 50/A/
Wisconsin Central Transportation Corporation 33 441/A/
Yellow Corporation 19 311/A/
-------
4,065
-------
</TABLE>
20
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Utilities -- 1.2%
Bangor Hydro-Electric Company 5 $ 73
Maine Public Service Company 1 21
Public Service Company of New Mexico 30 484
RGS Energy Group, Inc. 12 243
-------
821
-------
Total Common Stocks and Equity Interests (Identified Cost -- $76,434) 64,937
--------------------------------------------------------------------------------------------------
Preferred Shares -- N.M.
O'Sullivan Industries Holdings, Inc. (Identified Cost -- $2) 3 2
--------------------------------------------------------------------------------------------------
Repurchase Agreements -- 3.1%
Bank of America
3.10%, dated 12/31/99, to be repurchased at $1,036 on 1/3/00
(Collateral: $1,156 Freddie Mac mortgage-backed securities,
6%, due 9/1/28, value $1,064) 1,036 1,036
Morgan StanleyDean Witter
2.25%, dated 12/31/99, to be repurchased at $1,036 on 1/3/00
(Collateral: $750 U.S. Treasury Bonds, 14%, due 11/15/11,
value $1,060) 1,036 1,036
-------
Total Repurchase Agreements (Identified Cost -- $2,072) 2,072
--------------------------------------------------------------------------------------------------
Total Investments -- 100.6% (Identified Cost -- $78,508) 67,011
Other Assets Less Liabilities -- (0.6)% (432)
-------
NET ASSETS -- 100.0% $66,579
=======
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $7.95
=====
NAVIGATOR CLASS $8.08
=====
--------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
N.M. -- Not Meaningful.
21
<PAGE>
Investment Manager
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Adviser
For U.S. Small-Cap Value Trust:
Brandywine Asset Management,Inc.
Wilmington, DE
Board of Directors
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Richard G. Gilmore
Arnold L. Lehman
Dr. Jill E. McGovern
G. Peter O'Brien
T. A. Rodgers
Transfer and Shareholder Servicing Agent
Boston Financial Data Services
Boston, MA
Custodian
State Street Bank & Trust Company
Boston, MA
Counsel
Kirkpatrick & Lockhart LLP
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Philadelphia, PA
This report is not to be distributed unless preceded or
accompanied by a prospectus.
Legg Mason Wood Walker, Incorporated
-------------------------------------------
100 Light Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 . 539 . 0000
LMF-013
2/00
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