UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-1731

 

 

Source Capital, Inc.

(Exact name of registrant as specified in charter)

 

11400 West Olympic Boulevard, Suite 1200, Los Angeles, California

 

90064

(Address of principal executive offices)

 

(Zip code)

 

J. Richard Atwood, Treasurer, Source Capital, Inc.,

11400 West Olympic Boulevard, Suite 1200, Los Angeles, California 90064

(Name and address of agent for service)

 

Registrant's telephone number, including area code:

(310) 473-0225

 

 

Date of fiscal year end:

December 31

 

 

 

 

Date of reporting period:

September 30, 2005

 

 



 

ITEM 1. Schedule of Investments.

 

Source Capital, Inc.

Portfolio of Investments

September 30, 2005 (unaudited)

 



 

 

 

Shares or

 

 

 

 

 

Principal

 

 

 

 

 

Amount

 

Value

 

COMMON STOCKS

 

 

 

 

 

 

 

 

 

 

 

ENERGY — 14.4%

 

 

 

 

 

Cal Dive International, Inc.*

 

600,000

 

$

38,046,000

 

Noble Corporation

 

460,000

 

31,491,600

 

Tidewater Inc.

 

380,000

 

18,494,600

 

 

 

 

 

$

88,032,200

 

BUSINESS SERVICES & SUPPLIES — 14.3%

 

 

 

 

 

Brady Corporation (Class A)

 

145,000

 

$

4,486,300

 

CDW Corporation*

 

305,000

 

17,970,600

 

Charles River Laboratories International, Inc.*

 

410,000

 

17,884,200

 

Invitrogen Corporation*

 

170,000

 

12,789,100

 

Manpower Inc.

 

300,000

 

13,317,000

 

ScanSource Inc.*

 

425,000

 

20,714,500

 

 

 

 

 

$

87,161,700

 

PRODUCER DURABLES — 13.8%

 

 

 

 

 

Graco Inc.

 

495,000

 

$

16,968,600

 

HNI Corporation

 

270,000

 

16,259,400

 

IDEX Corporation

 

495,000

 

21,062,250

 

Oshkosh Truck Corporation

 

360,000

 

15,537,600

 

Zebra Technologies Corporation (Class A)*

 

365,000

 

14,267,850

 

 

 

 

 

$

84,095,700

 

TECHNOLOGY — 11.2%

 

 

 

 

 

Cognex Corporation

 

590,000

 

$

17,741,300

 

Microchip Technology Incorporated

 

200,000

 

6,024,000

 

Plantronics, Inc.

 

620,000

 

19,102,200

 

SanDisk Corporation*

 

530,000

 

25,572,500

 

 

 

 

 

$

68,440,000

 

RETAILING — 8.4%

 

 

 

 

 

CarMax, Inc.*

 

750,006

 

$

23,452,688

 

O’Reilly Automotive, Inc.*

 

1,000,000

 

28,180,000

 

 

 

 

 

$

51,632,688

 

FINANCIAL — 8.4%

 

 

 

 

 

Brown & Brown, Inc.

 

290,000

 

$

14,410,100

 

First American Corporation, The

 

155,000

 

7,078,850

 

Gallagher & Co., Arthur J.

 

440,000

 

12,676,400

 

North Fork Bancorporation, Inc.

 

682,500

 

17,403,750

 

 

 

 

 

$

51,569,100

 

HEALTH CARE — 7.7%

 

 

 

 

 

AmSurg Corp.*

 

180,000

 

$

4,924,800

 

 



 

Bio-Rad Laboratories, Inc.*

 

200,300

 

11,014,497

 

Health Management Associates, Inc.

 

555,000

 

13,025,850

 

Lincare Holdings, Inc.*

 

440,000

 

18,062,000

 

 

 

 

 

$

47,027,147

 

ENTERTAINMENT — 4.4%

 

 

 

 

 

Carnival Corporation

 

536,600

 

$

26,819,268

 

CONSUMER DURABLES — 3.0%

 

 

 

 

 

Briggs & Stratton Corporation

 

370,000

 

$

12,798,300

 

Polaris Industries Inc.

 

115,000

 

5,698,250

 

 

 

 

 

$

18,496,550

 

TRANSPORATION — 2.9%

 

 

 

 

 

Heartland Express, Inc.

 

670,000

 

$

13,627,800

 

Knight Transporation, Inc.

 

170,000

 

4,141,200

 

 

 

 

 

$

17,769,000

 

MATERIALS — 2.2%

 

 

 

 

 

Engelhard Corporation

 

480,000

 

$

13,396,800

 

 

 

 

 

 

 

TOTAL COMMON STOCKS — 90.7% (Cost$333,049,809)

 

 

 

$

554,440,153

 

 

 

 

 

 

 

PREFERRED STOCKS

 

 

 

 

 

REAL ESTATE INVESTMENT TRUST

 

 

 

 

 

CBL & Associates Properties, Inc. (Series C)

 

100,000

 

$

2,577,000

 

Duke-Weeks Realty Corp. (Series B)

 

40,000

 

2,119,000

 

Pennsylvania Real Estate Investment Trust (Series A)

 

59,000

 

3,407,250

 

ProLogis Trust 6.75% (Series G)

 

120,000

 

3,027,600

 

TOTAL PREFERRED STOCKS — 1.8% (Cost $10,179,446)

 

 

 

$

11,130,850

 

 

 

 

 

 

 

CONVERTIBLE BONDS AND DEBENTURES

 

 

 

 

 

 

 

 

 

 

 

TECHNOLOGY — 1.0%

 

 

 

 

 

BEA Systems, Inc. — 4% 2006

 

$

2,000,000

 

$

1,980,000

 

International Rectifier Corp. — 4.25% 2007

 

2,000,000

 

1,972,500

 

LSI Logic Corporation — 4% 2006

 

2,000,000

 

1,990,000

 

 

 

 

 

$

5,942,500

 

BUSINESS SERVICES & SUPPLIES — 0.3%

 

 

 

 

 

Pegasus Solutions, Inc. — 3.875% 2023

 

$

2,000,000

 

$

1,725,000

 

TOTAL CONVERTIBLE BONDS & DEBENTURES — 1.3% (Cost $7,690,000)

 

 

 

$

7,667,500

 

 



 

NON-CONVERTIBLE BONDS AND DEBENTURES

 

 

 

 

 

CORPORATE — 3.8%

 

 

 

 

 

Central Garden & Pet Company — 9.125% 2013

 

$

2,000,000

 

$

2,135,000

 

HMH Properties, Inc. — 7.875% 2008

 

1,338,000

 

1,369,777

 

Host Marriott Corporation — 9.25% 2007

 

2,000,000

 

2,150,000

 

Manitowoc Company, Inc., The — 10.5% 2012

 

1,300,000

 

1,469,000

 

Metaldyne Corporation — 11% 2012

 

2,000,000

 

1,330,000

 

OM Group, Inc. — 9.25% 2011

 

4,000,000

 

4,080,000

 

Orbital Sciences Corporation — 9% 2011

 

3,000,000

 

3,270,000

 

PolyOne Corporation — 10.625% 2010

 

950,000

 

995,125

 

Realty Income Corporation — 8.25% 2008

 

2,000,000

 

2,168,000

 

Unisys Corporation — 7.875% 2008

 

1,500,000

 

1,522,500

 

Windmere Durable Holdings Inc. — 10% 2008

 

3,000,000

 

2,895,000

 

 

 

 

 

$

23,384,402

 

U.S. GOVERNMENT AND AGENCIES — 0.1%

 

 

 

 

 

Federal Home Loan Mortgage Corporation

 

 

 

 

 

— 6.5% 2023 (Interest Only)

 

$

63,263

 

$

4,033

 

— 10.15% 2006 (REMIC)

 

27

 

27

 

Government National Mortgage Association (Mobile Home)

 

 

 

 

 

— 9.75% 2010

 

292,795

 

293,736

 

 

 

 

 

$

297,796

 

TOTAL NON-CONVERTIBLE BONDS AND DEBENTURES — 3.9% (Cost $23,584,683)

 

 

 

$

23,682,198

 

TOTAL INVESTMENT SECURITIES — 97.7% (Cost $374,503,938)

 

 

 

$

596,920,701

 

 

 

 

 

 

 

SHORT-TERM INVESTMENT — 1.2% (Cost $7,523,382)

 

 

 

 

 

Short-term Corporate Note:

 

 

 

 

 

Rabobank USA Financial Corporation — 3.87% 10/3/05

 

$

7,525,000

 

$

7,523,382

 

 

 

 

 

 

 

TOTAL INVESTMENTS — 98.9% (Cost $382,027,320)(A)

 

 

 

$

604,444,083

 

Other assets and liabilities, net — 1.1%

 

 

 

6,422,899

 

TOTAL NET ASSETS — 100%

 

 

 

$

610,866,982

 

 


*Non-income producing security

 

(A)      The cost stated also approximates the aggregate cost for Federal income tax purposes. Net unrealized appreciation consists of:

 

 

 

$

226,724,754

 

Gross unrealized appreciation:

 

 

 

$

4,307,991

 

Gross unrealized depreciation:

 

 

 

 

 

Net unrealized appreciation:

 

 

 

$

222,416,763

 

 



 

ITEM 2. CONTROLS AND PROCEDURES.

 

(a)                                  The principal executive officer and principal financial officer of the registrant have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.

 

(b)                                 There have been no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

 

ITEM 3. EXHIBITS.

 

(a)                                  Separate certification for the registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940. Attached hereto.

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SOURCE CAPITAL, INC.

 

 

By:

/s/ ERIC S. ENDE

 

Eric S. Ende, President

 

Date:

November 18, 2005

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SOURCE CAPITAL, INC.

 

 

By:

/s/ J. RICHARD ATWOOD

 

J. Richard Atwood, Treasurer

 

Date:

November 18, 2005