Dreyfus
arge Company
Value Fund
ANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited) and its share
price.
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
19 Report of Independent Auditors
20 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus
Large Company Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Large Company Value
Fund, covering the 12-month period from November 1, 1998 through October 31,
1999. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Timothy M. Ghriskey.
Despite a relatively weak third quarter of 1999 for the U.S. stock market, the
past year has been rewarding for most equity investors overall. When the
reporting period began, most sectors of the U.S. stock market had completed a
sharp correction caused primarily by concerns regarding the spread of the global
financial crisis in overseas markets. Soon after the start of 1999, however,
those fears abated. In fact, the U.S. economy remained strong, characterized by
low inflation and high levels of consumer spending. These conditions supported
continued strength in the stock market through the spring.
In the summer of 1999, however, the Federal Reserve Board raised short-term
interest rates twice in an effort to forestall inflationary pressures in a
fast-growing economy. Because higher interest rates tend to increase the cost of
capital and make fixed-income securities more competitive relative to equities,
most sectors of the stock market declined. By the end of the 12-month reporting
period, major stock indices had fallen from the record highs reached during the
summer, although stock prices generally were still higher than they were one
year earlier.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Large Company Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Timothy M. Ghriskey, Portfolio Manager
How did Dreyfus Large Company Value Fund perform relative to its benchmark?
For the one-year period ended October 31, 1999, the fund's total return was
13.71% .(1) This compares with a total return of 16.52% for the fund's new
benchmark, the Russell 1000 Value Index, for the same period.(2) Further
discussion about this benchmark change follows the line-graph comparison
contained in this annual report.
We attribute the fund's performance to a generally positive market environment,
but one that strongly favored growth over value. We attribute our
underperformance relative to the benchmark to a variety of company- and
sector-specific issues that, on balance, hurt the fund's performance. We discuss
these issues in greater detail below.
What is the fund's investment approach?
Dreyfus Large Company Value Fund invests primarily in large-capitalization,
value-oriented companies. We select investments one stock and one company at a
time. Our investment process starts with computerized, quantitative analysis of
the universe of stocks, first to identify those that appear underpriced in
relation to their intrinsic values, and then to focus on those value stocks that
we believe are best positioned to grow in the prevailing market environment. Our
team of experienced analysts examines the fundamentals of each top-ranked
candidate, providing additional information to help us decide which securities
to purchase or sell.
In addition to identifying attractive investment opportunities, our approach is
designed to limit the risks associated with exposure to individual market
sectors. Instead of attempting to predict which industries or sectors are likely
to perform best in the near future, we allocate the fund's assets among sectors
in roughly the same proportions as our benchmark. However, we may choose to
emphasize cer
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
tain sectors that we believe offer greater long-term growth potential than the
overall market. During the reporting period, we chose to emphasize
value-oriented companies in the rapidly growing health care and technology
sectors.
What other factors influenced the fund's performance?
As stated earlier, the fund's performance relative to our benchmark was largely
driven by sector-and company-specific factors.
In regard to the fund's sector exposure, we generally benefited from our
overweighting in technology with the strong performance of industry leaders,
such as Intel and International Business Machines. However, two of our
technology holdings, Compaq Computer and Storage Technology, proved particularly
disappointing as a result of the companies' struggles with competitive
pressures. On the other hand, although many health care stocks suffered during
the period due to a challenging political environment and changing rules for
Medicare reimbursements, our health care holdings outperformed the benchmark's
health care component. We achieved above-average results from holdings in
biotech companies such as Biogen, hospital management organizations such as
Columbia/HCA Healthcare, and pharmaceutical companies such as Pharmacia &
Upjohn.
Among the fund' s other diversified holdings, many individual stocks showed
notable strength throughout the period. Our best performers included well-known
companies in some of the market's strongest industries, such as Citigroup in the
financial industry, General Motors in consumer durables and Wendy' s
International in consumer staples. We also succeeded in identifying stocks that
performed relatively well within relatively weak-performing sectors, such as
Niagara Mohawk Power in the utility sector. On the other hand, we suffered
notable disappointments with two financial companies that delivered
lower-than-expected earnings, and several supermarket chains that, despite
strong earnings, lost ground due to anticipated competition from Internet-based
grocery services.
What is the fund's current strategy?
During the reporting period, we shifted from a strictly sector-neutral stance to
a strategy that allows us to modestly favor certain sectors, such as technology
and health care, that we believe offer greater growth potential than the overall
market. We have not, however, deviated from our strict commitment to value
investing.
Value stocks significantly underperformed growth stocks this past year, as
measured by comparison of the Russell 1000 Growth Index and Russell 1000 Value
Index, which returned 34.25% and 16.52%, respectively, over the past 12-month
period.(2) Events during the period reminded us about the importance of style
diversification. Specifically, in early April 1999 a powerful shift in market
sentiment appeared to take place. Precipitated by unexpected strength in the
U.S. and global economies, investment dollars abruptly flowed out of growth
stocks and into traditional value sectors such as energy, basic materials and
capital goods. Although the trend proved short lived, and growth began to again
outperform value, it hinted at the speed with which market sentiment can turn.
We believe our disciplined, quantitatively driven investment strategy provides a
sound value-oriented investment, and we continue to maintain our disciplined
investment style and our commitment to value.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL
1000 VALUE INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL 1000 COMPANIES WITH
LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. THE RUSSELL 1000
GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL 1000 COMPANIES WITH
HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED GROWTH VALUES. THE RUSSELL
1000 INDEX MEASURES THE PERFORMANCE OF THE 1,000 LARGEST COMPANIES IN THE
RUSSELL 3000 INDEX, WHICH REPRESENT APPROXIMATELY 89% OF THE TOTAL MARKET
CAPITALIZATION OF THE RUSSELL 3000 INDEX.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Large Company
Value Fund with the Russell 1000 Value Index and the Wilshire Large Company
Value Index
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Average Annual Total Returns AS OF 10/31/99
Inception From
Date 1 Year 5 Years Inception
- --------------------------------------------------------------------------------
Fund 12/29/93 13.71% 20.33% 17.38%
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS LARGE COMPANY
VALUE FUND ON 12/29/93 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE ON THAT
DATE IN THE RUSSELL 1000 VALUE INDEX AND IN THE WILSHIRE LARGE COMPANY VALUE
INDEX WHICH ARE DESCRIBED BELOW. FOR COMPARATIVE PURPOSES, THE VALUE OF EACH
INDEX ON 12/31/93 IS USED AS THE BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND
CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THIS IS THE FIRST YEAR IN WHICH COMPARATIVE PERFORMANCE IS
BEING SHOWN FOR THE RUSSELL 1000 VALUE INDEX, WHICH HAS BEEN SELECTED AS THE
PRIMARY INDEX FOR COMPARING THE FUND'S PERFORMANCE BASED ON THE FUND'S AND THE
INDEX'S LARGE-CAP VALUE ORIENTATION. THE RUSSELL 1000 VALUE INDEX REPLACES THE
WILSHIRE LARGE COMPANY VALUE INDEX, WHICH WAS USED AS THE FUND'S BENCHMARK INDEX
LAST YEAR, BECAUSE THE FUND'S MANAGER PREFERS THE INFORMATION MADE AVAILABLE BY
RUSSELL. THE RUSSELL 1000 VALUE INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL
1000 COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH
VALUES. THE RUSSELL 1000 INDEX MEASURES THE PERFORMANCE OF THE 1,000 LARGEST
COMPANIES IN THE RUSSELL 3000 INDEX, WHICH REPRESENT APPROXIMATELY 89% OF THE
TOTAL MARKET CAPITALIZATION OF THE RUSSELL 3000 INDEX. THE WILSHIRE LARGE
COMPANY VALUE INDEX IS AN UNMANAGED INDEX REFLECTING THE PERFORMANCE OF THE
LARGEST 750 STOCKS IN THE WILSHIRE 5000 INDEX THAT MEET CERTAIN STATISTICAL
CRITERIA FOR "VALUE." PURSUANT TO APPLICABLE FEDERAL REGULATIONS, THE
PERFORMANCE OF THE WILSHIRE INDEX WILL BE PROVIDED FOR THIS FISCAL YEAR 1999,
BUT WILL NOT BE PROVIDED IN THE FUTURE. NEITHER OF THE FOREGOING INDICES TAKE
INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO
FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED
IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT.
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999
STATEMENT OF INVESTMENTS (CONTINUED)
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COMMON STOCKS--99.1% Shares Value ($)
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<S> <C> <C>
BANKING--16.9%
Bank of America 61,600 3,965,500
Bank of New York 56,100 2,349,188
Chase Manhattan 31,200 2,726,100
Fleet 55,800 2,434,275
KeyCorp 69,100 1,930,481
Morgan (J.P.) 6,200 811,425
U.S. Bancorp 65,000 2,409,062
Wachovia 25,000 2,156,250
Wells Fargo 39,200 1,876,700
20,658,981
CONSUMER DURABLES--2.7%
Ford Motor 23,300 1,278,587
General Motors 29,000 2,037,250
3,315,837
CONSUMER NON-DURABLES--1.9%
Heinz (H.J.) 47,300 2,258,575
CONSUMER SERVICES--6.4%
Clear Channel Communications 14,400 (a) 1,157,400
MediaOne Group 58,200 (a) 4,135,838
Viacom, Cl. B 31,200 (a) 1,396,200
Wendy's International 46,600 1,112,575
7,802,013
ELECTRONIC TECHNOLOGY--8.6%
Apple Computer 30,700 (a) 2,459,838
General Dynamics 36,700 2,034,556
Hewlett-Packard 4,900 362,906
Intel 29,000 2,245,687
International Business Machines 7,700 757,488
Micron Technology 4,200 (a) 299,512
Motorola 24,100 2,348,244
10,508,231
ENERGY MINERALS--10.0%
BP Amoco, A.D.S. 28,200 1,628,550
Chevron 14,000 1,278,375
Conoco, Cl. B 23,585 639,750
Exxon 31,700 2,347,781
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
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COMMON STOCKS (CONTINUED) Shares Value ($)
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ENERGY MINERALS (CONTINUED)
Mobil 31,800 3,068,700
Royal Dutch Petroleum, A.D.R. 26,600 1,594,338
Texaco 26,400 1,620,300
12,177,794
FINANCE--9.8%
American Express 4,500 693,000
Citigroup 119,200 6,451,700
Federal National Mortgage Association 29,900 2,115,425
Merrill Lynch 8,800 690,800
Morgan Stanley Dean Witter 17,700 1,952,531
11,903,456
HEALTH SERVICES--2.0%
Columbia/HCA Healthcare 103,300 2,492,112
HEALTH TECHNOLOGY--2.7%
Abbott Laboratories 29,200 1,178,950
Bristol-Myers Squibb 27,000 2,073,938
3,252,888
INSURANCE--5.2%
American General 30,000 2,225,625
American International Group 40,200 4,138,088
6,363,713
NON-ENERGY MINERALS--2.5%
Alcoa 30,300 1,840,725
Inco 57,000 1,154,250
2,994,975
PROCESS INDUSTRIES--3.2%
Dow Chemical 17,100 2,022,075
duPont (E.I.) de Nemours 20,812 1,341,073
International Paper 9,700 510,463
3,873,611
PRODUCER MANUFACTURING--5.5%
Caterpillar 22,100 1,221,025
General Electric 19,500 2,643,469
Honeywell 18,300 1,929,506
Minnesota Mining & Manufacturing 9,600 912,600
6,706,600
STATEMENT OF INVESTMENTS (CONTINUED)
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COMMON STOCKS (CONTINUED) Shares Value ($)
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TECHNOLOGY SERVICES--.6%
Electronic Data Systems 12,200 713,700
TRANSPORTATION--1.1%
Union Pacific 24,000 1,338,000
UTILITIES--20.0%
AT&T-Liberty Media Group, Cl. A 22,200 (a) 881,062
Bell Atlantic 12,200 792,237
BellSouth 44,500 2,002,500
Cincinnati Bell 56,600 1,177,988
Coastal 54,600 2,300,025
Duke Energy 8,500 480,250
Enron 18,200 726,862
GTE 44,100 3,307,500
Illinova 67,800 2,156,888
MCI WorldCom 11,900 (a) 1,021,169
Niagara Mohawk Power 101,200 (a) 1,606,550
Pinnacle West Capital 44,000 1,622,500
SBC Communications 68,958 3,512,569
Southern 15,700 417,031
Sprint (Fon Group) 16,100 1,196,431
Texas Utilities 31,000 1,201,250
24,402,812
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TOTAL INVESTMENTS (cost $100,501,226) 99.1% 120,763,298
CASH AND RECEIVABLES (NET) .9% 1,097,291
NET ASSETS 100.0% 121,860,589
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 100,501,226 120,763,298
Receivable for investment securities sold 1,944,356
Dividends receivable 122,130
Receivable for shares of Common Stock subscribed 182
Prepaid expenses 7,733
122,837,699
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 94,508
Due to Distributor 24,836
Cash overdraft due to Custodian 685,338
Payable for shares of Common Stock redeemed 100,331
Payable for investment securities purchased 20,359
Interest payable--Note 2 165
Accrued expenses 51,573
977,110
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NET ASSETS ($) 121,860,589
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 87,255,864
Accumulated undistributed investment income--net 649,998
Accumulated net realized gain (loss) on investments 13,692,655
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 20,262,072
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NET ASSETS ($) 121,860,589
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SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 5,069,331
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 24.04
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended October 31, 1999
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INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $19,340 foreign taxes withheld at source) 2,464,884
Interest 79,861
TOTAL INCOME 2,544,745
EXPENSES:
Management fee--Note 3(a) 1,062,098
Shareholder servicing costs--Note 3(b) 526,473
Professional fees 58,714
Prospectus and shareholders' reports 52,207
Registration fees 34,312
Custodian fees--Note 3(b) 16,313
Interest expense--Note 2 7,292
Directors' fees and expenses--Note 3(c) 7,228
Miscellaneous 7,693
TOTAL EXPENSES 1,772,330
INVESTMENT INCOME--NET 772,415
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 14,049,725
Net unrealized appreciation (depreciation) on investments 4,265,714
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 18,315,439
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 19,087,854
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
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Year Ended October 31,
-----------------------------
1999 1998
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OPERATIONS ($):
Investment income--net 772,415 581,832
Net realized gain (loss) on investments 14,049,725 (285,972)
Net unrealized appreciation (depreciation)
on investments 4,265,714 8,199,995
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 19,087,854 8,495,855
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DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (575,758) (419,872)
Net realized gain on investments -- (8,053,887)
TOTAL DIVIDENDS (575,758) (8,473,759)
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CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 45,354,543 53,216,392
Dividends reinvested 548,869 8,047,136
Cost of shares redeemed (78,366,773) (87,433,544)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (32,463,361) (26,170,016)
TOTAL INCREASE (DECREASE) IN NET ASSETS (13,951,265) (26,147,920)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 135,811,854 161,959,774
END OF PERIOD 121,860,589 135,811,854
Undistributed investment income--net 649,998 453,341
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,953,625 2,507,151
Shares issued for dividends reinvested 25,040 393,504
Shares redeemed (3,307,066) (4,087,272)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,328,401) (1,186,617)
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Year Ended October 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 21.23 21.35 18.05 15.46 12.63
Investment Operations:
Investment income--net .13(a) .09 .07 .12 .22
Net realized and unrealized gain (loss)
on investments 2.77 .91 4.33 4.68 2.93
Total from Investment Operations 2.90 1.00 4.40 4.80 3.15
Distributions:
Dividends from investment income--net (.09) (.06) (.11) (.21) .(.32)
Dividends from net realized gain on
investments -- (1.06) (.99) (2.00) --
Total Distributions (.09) (1.12) (1.10) (2.21) (.32)
Net asset value, end of period 24.04 21.23 21.35 18.05 15.46
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TOTAL RETURN (%) 13.71 4.83 25.29 34.35 25.73
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets 1.25 1.24 1.22 1.25 .83
Ratio of interest expense to average
net assets .01 -- -- -- --
Ratio of net investment income
to average net assets .55 .36 .41 .93 1.64
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- .06 .32 1.76
Portfolio Turnover Rate 141.99 156.72 110.14 186.39 143.61
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Net Assets, end of period ($ X 1,000) 121,861 135,812 161,960 34,187 6,687
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Large Company Value Fund (the "fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series including the fund. The fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign curren
cies are translated to U.S. dollars at the prevailing rates of exchange. Forward
currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions, and the difference between the amount of
dividends, interest and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund received net
earnings credits of $5 during the period ended October 31, 1999 based on
available cash balances left on deposit. Interest earned under this arrangement
is included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the fund may make
distributions on a more frequent basis to com
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ply with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund may borrow up to $2 million for leveraging purposes under a short-term
unsecured line of credit and participates with other Dreyfus-managed funds in a
$100 million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is charged
to the fund at rates which are related to the Federal Funds rate in effect at
the time of borrowings.
The average daily amount of borrowings outstanding under both arrangements
during the period ended October 31, 1999 was approximately $132,300, with a
related weighted average annualized interest rate of 5.51%.
NOTE 3--Management Fee and Other Transactions with Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .75 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(B) Under the Shareholder Services Plan, the fund pays the Distributor at
an annual rate of .25 of 1% of the value of the fund's average daily net assets
for the provision of certain services. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 1999, the fund was charged $354,033 pursuant
to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $118,886 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 1999, the fund was
charged $16,313 pursuant to the custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(D) A 1% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days following the date of issuance, including redemptions made
through the use of the fund's Exchange privilege.
(E) During the period ended October 31, 1999, the fund incurred total brokerage
commissions of $468,397, of which $17,147 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$194,682,804 and $222,337,198, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 1999, accumulated net unrealized appreciation on investments was
$20,262,072, consisting of $20,722,779 gross unrealized appreciation and
$460,707 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Large Company Value Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Large Company Value Fund (one of the
series constituting Dreyfus Growth and Value Funds, Inc.), as of October 31,
1999, and 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 financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund' s management. Our responsibility is to express an opinion on these
financial statements and financial highlights 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 financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of October 31, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. 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 financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Large Company Value Fund at October 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
December 8, 1999
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates 80.76% of the
ordinary dividends paid during the fiscal year ended October 31, 1999 as
qualifying for the corporate dividends received reduction. Shareholders will
receive notification in January 2000 of the percentage applicable to the
preparation of their 1999 income tax returns.
For More Information
Dreyfus Large Company Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to
[email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 251AR9910
================================================================================
Dreyfus
Small Company
Value Fund
ANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
20 Report of Independent Auditors
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Small Company Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Small Company Value
Fund covering the 12-month period from November 1, 1998 through October 31,
1999. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Peter Higgins.
While the past year was rewarding for many equity investors, small-cap stocks
did not fare as well as other market sectors. When the reporting period began,
the U.S. stock market had just completed a sharp correction caused primarily by
concerns regarding the spread of the global financial crisis in overseas
markets. Soon after the start of 1999, however, those fears abated. In fact, the
U.S. economy remained strong, and investors became concerned that inflationary
pressures might re-emerge. As a result, the Federal Reserve Board raised
short-term interest rates twice during the summer in an effort to forestall a
reacceleration of inflation in a fast-growing economy. In this environment,
equity investors once again preferred the relative predictability of earnings
from large-cap companies.
Despite a brief rally in April and May, small-cap stocks generally failed to
keep pace with their large-cap counterparts. However, some small-cap technology
stocks that were subject to heightened investor speculation were exceptions to
this trend.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Small Company Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Peter Higgins, Portfolio Manager
How did Dreyfus Small Company Value Fund perform relative to its benchmark?
For the 12-month period ended October 31, 1999, the fund produced a 21.45% total
return,(1) substantially outperforming its benchmark, the Russell 2000 Value(2)
Index, which produced a 0.72% total return for the same period. We attribute the
fund' s outperformance in part to an overweight in value-oriented technology
stocks, particularly semiconductor capital equipment manufacturers and
semiconductor companies. In addition, we were particularly successful in buying
these shares when they were significantly undervalued in late 1998 during the
global recession. Of course, the technology sector is one of the most volatile
segments of the market, and there is no assurance that the technology sector
will continue to experience the success it has had in recent years.
What is the fund's investment approach?
Our focus is to identify inexpensive stocks with solid long-term fundamentals
and improving prospects. The process includes searching for companies with low
price-earnings ratios, defined as low stock prices in relation to expected
earnings. To do this, we compare a company's P/E ratio to its own historical
averages as well as to other companies in the same industry. We then develop an
earnings estimate for each investment candidate, and focus on those companies
that we think can do better than the average expectations of Wall Street
analysts. Our approach includes meeting with corporate management, competitors
and suppliers of these companies to identify positive trends before they become
widely known in the investment community.
For example, we believed that the dire predictions a year ago regarding
semiconductor capital equipment manufacturers and semiconductor companies were
far too pessimistic. The prevailing view was that the Asian economic crisis
would drag the U.S. economy into a reces
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
sion, depressing the need for semiconductor products and the machinery to build
them. We believed that business was actually getting better for many of these
companies, but this improving trend was not yet reflected in their stock prices.
Fortunately, we were right: the best returns in the portfolio came from
semiconductor equipment manufacturers such as Lam Research, LTX and Credence
Systems. Some of the stocks have increased several fold from their lows, and
we' ve taken the opportunity to reduce our exposure to these areas because their
performance has met or exceeded our target prices.
What other factors influenced the fund's performance?
Despite the market's recent volatility, we have continued to find fundamentally
sound companies that are selling at attractive prices. In our opinion, the
investment community has remained focused on high-priced stocks and has not paid
much attention to value. As a result, good companies that report a temporary
shortfall in earnings are sometimes knocked down in price by 50-60%, and we have
taken a very hard look at those opportunities. For example, early in the period,
the trucking company Arkansas Best was selling at just three times our earnings
estimates, reflecting the bearish economic outlook at the time. After posting
several quarters of positive earnings surprises, the stock has performed very
well for us.
In addition, because the U.S. economy was stronger than most analysts expected
during the fiscal year, economically cyclical industries performed well. For
example, our investment in Gaylord Container, which makes paper used to
manufacture boxes and other containers, provided good returns because of surging
demand for its products.
What is the fund's current strategy?
We have continued to search the market for stocks that are inexpensive according
to a number of different measures of value. We attempt to buy shares in good
businesses that we believe are improving and are likely to provide higher
earnings. When the stocks reach certain targets, we adhere to a strict
discipline and sell them. We consistently stick to our style, even when it is
temporarily out of favor.
However, it should be emphasized that while we manage a value portfolio, we
don' t simply buy inexpensive stocks. Rather, we seek to buy good companies that
offer good growth prospects at good prices. This strategy has been very
successful recently, even in poorly performing industries. For example, our
healthcare stocks did well despite the negative cloud hanging over the industry
because of lower Medicare reimbursement rates. In addition, Congressional debate
over the expansion of Medicare to cover prescription drugs is likely to heat up
during the next election cycle. Nevertheless, there continues to be opportunity
for healthcare companies in the right market niche. A good example is Quest
Diagnostics, the largest independent laboratory testing company in the U.S.,
which recently merged with the number two company in the industry. The merger
should create economies of scale, potentially leading to higher profits. In
addition, the company had only one Wall Street analyst following it, which could
present an opportunity to profit if the company's strong performance begins to
attract more attention.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL
2000 INDEX IS A WIDELY RECOGNIZED UNMANAGED INDEX OF SMALL-CAP STOCK
PERFORMANCE. THE RUSSELL 2000 VALUE INDEX IS AN UNMANAGED INDEX COMPRISED OF
COMPANIES IN THE RUSSELL 2000 INDEX WITH LOWER PRICE-TO-BOOK RATIOS.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Small Company
Value Fund with the Russell 2000 Index and the Russell 2000 Value Index
- --------------------------------------------------------------------------------
Average Annual Total Returns AS OF 10/31/99
Inception From
Date 1 Year 5 Years Inception
- --------------------------------------------------------------------------------
Fund 12/29/93 21.45% 17.34% 14.56%
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS SMALL COMPANY
VALUE FUND ON 12/29/93 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE ON THAT
DATE IN THE RUSSELL 2000 VALUE INDEX AS WELL AS THE RUSSELL 2000 INDEX. FOR
COMPARATIVE PURPOSES, THE VALUE OF EACH INDEX ON 12/31/93 IS USED AS THE
BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE
REINVESTED.
THIS IS THE FIRST YEAR IN WHICH COMPARATIVE PERFORMANCE IS BEING SHOWN FOR THE
RUSSELL 2000 VALUE INDEX, WHICH HAS BEEN SELECTED AS THE PRIMARY INDEX FOR
COMPARING THE FUND'S PERFORMANCE BASED ON THE FUND'S AND THE INDEX'S SMALL-CAP
VALUE ORIENTATION. THE RUSSELL 2000 INDEX WAS THE FUND'S BENCHMARK INDEX LAST
YEAR. PERFORMANCE FOR THIS INDEX WILL NOT BE PROVIDED WITH THE NEXT ANNUAL
REPORT, BUT IS PROVIDED HEREWITH PURSUANT TO APPLICABLE REGULATIONS.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THE RUSSELL 2000 VALUE INDEX IS AN UNMANAGED INDEX OF
SMALL-CAP VALUE STOCK PERFORMANCE. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX
OF SMALL-CAP STOCK PERFORMANCE.
NEITHER OF THE FOREGOING INDICES TAKE INTO ACCOUNT CHARGES, FEES AND OTHER
EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999
COMMON STOCKS--96.8% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
APPLIANCES & HOUSEHOLD DURABLES--.0%
Watsco 10,400 105,300
BASIC INDUSTRIES--11.7%
Arch Chemicals 176,800 2,607,800
CK Witco 235,400 2,206,875
Gaylord Container, Cl. A 377,000 (a) 2,120,625
Geon 129,800 3,407,250
Georgia Gulf 163,800 3,531,937
Hanna (M.A.) 334,500 3,574,969
National Steel, Cl. B 155,600 933,600
Olin 212,400 2,933,775
Safety-Kleen 308,225 (a) 3,525,323
Schulman (A.) 90,100 1,402,181
Structural Dynamics Research 163,200 (a) 1,611,600
Wellman 250,200 3,768,638
31,624,573
CAPITAL GOODS--8.6%
AGCO 257,000 2,762,750
Albany International, Cl. A 103,000 (a) 1,564,313
Applied Industrial Technologies 106,500 1,677,375
Avid Technology 265,500 (a) 2,937,094
Avnet 29,300 1,591,356
Belden 106,000 1,947,750
Chicago Bridge & Iron (New York Shares) 105,800 1,289,437
DONCASTERS, A.D.S. 225,500 (a) 2,255,000
Foster Wheeler 165,800 1,865,250
Intermet 108,900 1,102,612
Nordson 27,900 1,236,319
Wabash National 131,200 2,082,800
Wolverine Tube 57,600 (a) 792,000
23,104,056
CONSUMER DURABLES--4.5%
Arvin Industries 40,370 1,150,545
Beazer Homes USA 81,100 (a) 1,551,037
Callaway Golf 198,000 2,660,625
Dura Automotive Systems, Cl. A 87,800 (a) 1,646,250
In Focus Systems 56,800 (a) 1,125,350
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES (CONTINUED)
Polaris Industries 49,100 1,715,431
Toro 65,000 2,331,875
12,181,113
CONSUMER NON-DURABLES--10.0%
Ashworth 213,300 (a) 893,194
Crown Crafts 148,700 455,394
Kellwood 106,200 1,878,412
Maxwell Shoe, Cl. A 67,800 (a) 584,775
Musicland Stores 257,200 (a) 2,009,375
Nautica Enterprises 206,600 (a) 3,111,912
Ocular Sciences 80,300 (a) 1,475,513
Phillips-Van Heusen 251,100 2,008,800
Polaroid 174,800 3,900,225
Rock-Tenn, Cl. A 157,800 2,406,450
Russell 61,400 932,513
Sola International 131,600 (a) 1,842,400
Vans 307,200 (a) 3,456,000
Wolverine World Wide 190,500 1,952,625
26,907,588
CONSUMER SERVICES--15.8%
ACNielsen 86,000 (a) 1,892,000
Bon-Ton Stores 146,000 (a) 675,250
Boyd Gaming 436,800 (a) 2,839,200
Brown Shoe 267,700 4,768,406
Burlington Coat Factory Warehouse 204,500 3,502,062
Discount Auto Parts 149,800 (a) 2,134,650
Finlay Enterprises 167,900 (a) 2,014,800
Heilig-Meyers 223,800 979,125
Information Resources 258,400 (a) 2,745,500
NFO Worldwide 132,900 (a) 1,478,513
Neiman Marcus Group, Cl. A 88,500 (a) 2,118,469
OfficeMax 501,600 (a) 2,539,350
Pier 1 Imports 269,300 1,598,969
ShopKo Stores 126,100 (a) 3,160,381
Snyder Communications 188,500 (a) 2,403,375
TALK.com 267,700 (a) 4,266,469
Venator Group 499,400 (a) 3,495,800
42,612,319
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY--9.9%
EEX 221,166 (a) 815,550
Giant Industries 215,800 (a) 1,847,787
Houston Exploration 153,500 (a) 3,002,844
National-Oilwell 226,400 (a) 3,070,550
Newpark Resources 467,800 (a) 3,011,463
Ocean Energy 507,100 (a) 4,658,981
Range Resources 427,600 1,603,500
Santa Fe Snyder 650,600 (a) 5,611,425
Tesoro Petroleum 137,400 (a) 1,665,975
Valero Energy 71,600 1,315,650
26,603,725
FINANCIAL SERVICES--4.1%
BARRA 186,400 (a) 4,118,275
Berkley (W.R.) 83,400 1,912,987
Bowne & Co. 311,000 3,459,875
Klamath First Bancorp 9,900 118,800
MONY Group 50,600 1,593,900
11,203,837
HEALTH CARE--10.3%
AmeriPath 152,500 (a) 1,129,453
CONMED 76,400 (a) 1,905,225
Covance 145,700 (a) 1,411,469
Osteotech 67,400 (a) 880,412
Pharmaceutical Product Development 175,900 (a) 1,769,994
Quest Diagnostics 224,300 (a) 6,280,400
STERIS 240,500 (a) 3,201,656
Schein (Henry) 231,400 (a) 3,008,200
Spacelabs Medical 116,800 (a) 1,664,400
Superior Consultant Holdings 150,000 (a) 1,593,750
Ventiv Health 316,200 2,252,925
West Pharmaceutical Services 81,400 2,813,387
27,911,271
INDUSTRIAL COMPONENTS--.7%
Lennox International 176,300 1,796,056
RECREATION--.4%
Sun International Hotels 49,500 (a) 1,002,375
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--18.1%
ADE 28,600 (a) 429,000
Actel 159,900 (a) 3,018,112
Alliance Semiconductor 258,500 (a) 3,005,063
Alternative Resources 272,700 (a) 1,056,713
CFM Technologies 18,700 (a) 187,000
Cambridge Technology Partners 137,400 (a) 1,519,988
Circle.com 47,125 683,313
Cohu 64,100 1,209,887
Corel 548,400 (a) 3,427,500
FSI International 8,700 (a) 69,600
GT Interactive Software 164,200 (a) 451,550
HMT Technology 102,500 (a) 320,312
Hyperion Solutions 96,900 (a) 2,361,937
InaCom 41,000 (a) 197,313
International Rectifier 203,400 (a) 3,953,588
JDA Software Group 131,300 (a) 1,181,700
Kent Electronics 181,200 (a) 3,522,075
Mastech 43,300 (a) 741,513
Maxtor 416,100 (a) 2,288,550
Micro Warehouse 153,200 (a) 1,857,550
Peak International 178,500 (a) 1,673,438
Planar Systems 6,500 (a) 34,531
Power-One 36,200 (a) 724,000
Quantum 755,200 4,625,600
Renaissance Worldwide 534,200 (a) 1,836,313
Silicon Valley Group 21,900 (a) 273,750
Splash Technology Holdings 296,900 (a) 1,642,228
Tech Data 84,700 (a) 1,593,419
Trimble Navigation 137,200 (a) 2,229,500
Varian Semiconductor Equipment Associates 115,800 2,619,975
48,735,018
TRANSPORTATION--2.7%
Arkansas Best 191,300 (a) 2,654,287
Covenant Transport, Cl. A 41,000 (a) 630,375
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (CONTINUED)
Kitty Hawk 165,700 (a) 1,315,244
Yellow 153,300 (a) 2,606,100
7,206,006
TOTAL COMMON STOCKS
(cost $278,992,057) 260,993,237
- ------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--1.0% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.TREASURY BILLS;
4.41%, 11/12/1999
(cost $2,788,233) 2,792,000 2,788,231
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $281,780,290 ) 97.8% 263,781,468
CASH AND RECEIVABLES (NET) 2.2% 5,850,970
NET ASSETS 100.0% 269,632,438
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 281,780,290 263,781,468
Cash 103,217
Receivable for investment securities sold 9,830,058
Receivable for shares of Common Stock subscribed 105,363
Dividends receivable 44,385
Prepaid expenses 29,477
273,893,968
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 235,410
Due to Distributor 58,094
Payable for investment securities purchased 3,814,050
Payable for shares of Common Stock redeemed 49,588
Interest payable--Note 2 24,208
Accrued expenses 80,180
4,261,530
- --------------------------------------------------------------------------------
NET ASSETS ($) 269,632,438
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 279,042,690
Accumulated net realized gain (loss) on investments 8,588,570
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (17,998,822)
- --------------------------------------------------------------------------------
NET ASSETS ($) 269,632,438
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 13,014,751
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 20.72
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended October 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $8,449 foreign taxes withheld at source) 1,482,324
Interest 36,691
TOTAL INCOME 1,519,015
EXPENSES:
Management fee--Note 3(a) 2,285,905
Shareholder servicing costs--Note 3(b) 1,148,710
Interest expense--Note 2 140,482
Professional fees 78,679
Custodian fees--Note 3(b) 70,931
Prospectus and shareholders' reports 69,688
Registration fees 69,223
Directors' fees and expenses--Note 3(c) 14,660
Miscellaneous 6,386
TOTAL EXPENSES 3,884,664
INVESTMENT (LOSS) (2,365,649)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 16,860,336
Net unrealized appreciation (depreciation) on investments 46,041,133
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 62,901,469
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 60,535,820
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended October 31,
------------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (2,365,649) (1,825,266)
Net realized gain (loss) on investments 16,860,336 (4,363,524)
Net unrealized appreciation (depreciation)
on investments 46,041,133 (82,191,499)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 60,535,820 (88,380,289)
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net -- (275,563)
Net realized gain on investments -- (7,072,792)
TOTAL DIVIDENDS -- (7,348,355)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 79,672,928 296,824,006
Dividends reinvested -- 6,869,046
Cost of shares redeemed (171,484,720) (283,794,090)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (91,811,792) 19,898,962
TOTAL INCREASE (DECREASE) IN NET ASSETS (31,275,972) (75,829,682)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 300,908,410 376,738,092
END OF PERIOD 269,632,438 300,908,410
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 3,923,980 13,797,646
Shares issued for dividends reinvested -- 320,684
Shares redeemed (8,550,678) (13,638,948)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (4,626,698) 479,382
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Year Ended October 31,
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1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 17.06 21.95 17.66 14.00 12.43
Investment Operations:
Investment income (loss)--net (.16)(a) (.09)(a) -- .07 .10
Net realized and unrealized
gain (loss) on investments 3.82 (4.39) 6.43 4.69 2.33
Total from Investment Operations 3.66 (4.48) 6.43 4.76 2.43
Distributions:
Dividends from investment income--net -- (.02) (.04) (.09) (.33)
Dividends from net realized gain on
investments -- (.39) (2.10) (1.01) (.53)
Total Distributions -- (.41) (2.14) (1.10) (.86)
Net asset value, end of period 20.72 17.06 21.95 17.66 14.00
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TOTAL RETURN (%) 21.45 (20.83) 40.22 35.99 21.30
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets 1.23 1.21 1.23 1.27 .84
Ratio of interest expense and
dividends on securities sold short
to average net assets .05 .01 .02 .02 .07
Ratio of net investment income (loss)
to average net assets (.78) (.44) .22 .62 .79
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- .05 .41 1.80
Portfolio Turnover Rate 170.38 132.38 76.11 183.58 161.01
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Net Assets, end of period ($ X 1,000) 269,632 300,908 376,738 16,852 6,404
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Small Company Value Fund (the "fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the fund. The fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The fund does not isolate that portion of the
results of the operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions, and the difference between the amount of
dividends, interest and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund receives net
earnings credits based on available cash balances left on deposit.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the The Fun
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
best interests of its shareholders, by complying with the applicable provisions
of the Code, and to make distributions of taxable income sufficient to relieve
it from substantially all Federal income and excise taxes.
During the period ended October 31, 1999, the fund increased accumulated
undistributed investment income-net by $2,365,649 and decreased accumulated net
realized gain (loss) on investments by that amount. Net assets were not affected
by this reclassification.
NOTE 2--Bank Lines of Credit:
The fund may borrow up to $10 million for leveraging purposes under a short-term
unsecured line of credit and participates with other Dreyfus-managed funds in a
$100 million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is charged
to the fund at rates which are related to the Federal Funds rate in effect at
the time of borrowings.
The average daily amount of borrowings outstanding under both arrangements
during the period ended October 31, 1999 was approximately $2,642,700, with a
related weighted average annualized interest rate of 5.32%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .75 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(B) Under the Shareholder Services Plan, the fund pays the Distributor at an
annual rate of .25 of 1% of the value of the fund's average daily net assets for
the provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents (a securities dealer, financial institution o
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
October 31, 1999, the fund was charged $761,968 pursuant to the Shareholder
Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $216,001 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 1999, the fund was
charged $70,931 pursuant to the custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(D) A 1% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days following the date of issuance, including redemptions made
through the use of the fund's Exchange privilege.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$519,301,424 and $613,512,177, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$17,998,822, consisting of $23,336,538 gross unrealized appreciation and
$41,335,360 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Small Company Value Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Small Company Value Fund, (one of the
series constituting Dreyfus Growth and Value Funds, Inc.) as of October 31,
1999, and 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 financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund' s management. Our responsibility is to express an opinion on these
financial statements and financial highlights 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 financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of October 31, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. 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 financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Small Company Value Fund at October 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
December 8, 1999
For More Information
Dreyfus Small Company Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to
[email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 253AR9910
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS LARGE COMPANY VALUE FUND WITH THE
WILSHIRE LARGE COMPANY VALUE INDEX
AND THE RUSSELL 1000 VALUE INDEX
EXHIBIT A:
DREYFUS
LARGE WILSHIRE RUSSELL
PERIOD COMPANY LARGE COMPANY 1000 VALUE
VALUE FUND VALUE INDEX* INDEX*
12/29/93 10,000 10,000 10,000
10/31/94 10,104 9,889 10,097
10/31/95 12,704 12,785 12,589
10/31/96 17,068 15,615 15,578
10/31/97 21,385 20,075 20,748
10/31/98 22,419 22,564 23,825
10/31/99 25,494 22,927 27,760
*Source: Lipper Analytical Services, Inc.
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS SMALL COMPANY VALUE FUND WITH THE RUSSELL
2000 INDEX AND THE RUSSELL 2000 VALUE INDEX
EXHIBIT A:
DREYFUS RUSSELL
SMALL 2000 RUSSELL
PERIOD COMPANY VALUE 2000
VALUE FUND INDEX * INDEX*
12/29/93 10,000 10,000 10,000
10/31/94 9,944 9,989 9,963
10/31/95 12,062 11,582 11,791
10/31/96 16,403 13,850 13,749
10/31/97 23,000 19,000 17,782
10/31/98 18,210 17,538 15,676
10/31/99 22,116 17,664 18,007
*Source: Lipper Analytical Services, Inc.
