-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RSDsdL+swC0UCNthiolcPE83SQErlzlUAmuSP9ANTnJv4qtxbu0UQHu91ot/OKWA NreoNCmMCvphgwJbjX4L3w== 0001193125-09-218454.txt : 20091030 0001193125-09-218454.hdr.sgml : 20091030 20091030113503 ACCESSION NUMBER: 0001193125-09-218454 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090831 FILED AS OF DATE: 20091030 DATE AS OF CHANGE: 20091030 EFFECTIVENESS DATE: 20091030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL SECTOR FUNDS INC d/b/a JENNISONDRYDEN SECTOR FUNDS CENTRAL INDEX KEY: 0000352665 IRS NUMBER: 133071974 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-03175 FILM NUMBER: 091146782 BUSINESS ADDRESS: STREET 1: GATEWAY CENTER THREE, 4TH FLOOR STREET 2: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 973-802-6469 MAIL ADDRESS: STREET 1: GATEWAY CENTER THREE, 4TH FLOOR STREET 2: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL SECTOR FUNDS INC DATE OF NAME CHANGE: 20080902 FORMER COMPANY: FORMER CONFORMED NAME: JENNISON SECTOR FUNDS INC DATE OF NAME CHANGE: 20030716 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL SECTOR FUNDS INC DATE OF NAME CHANGE: 19990519 0000352665 S000004379 Prudential Financial Services Fund d/b/a Dryden Financial Services Fund C000012117 Class A PFSAX C000012118 Class B PUFBX C000012119 Class C PUFCX C000012120 Class Z PFSZX 0000352665 S000004380 Prudential Health Sciences Fund d/b/a Jennison Health Sciences Fund C000012121 Class A PHLAX C000012122 Class B PHLBX C000012123 Class C PHLCX C000012124 Class Z PHSZX C000018112 Class L C000018113 Class M C000018114 Class X C000018115 Class New X 0000352665 S000004382 Prudential Utility Fund d/b/a Jennison Utility Fund C000012129 Class A PRUAX C000012130 Class B PRUTX C000012131 Class C PCUFX C000012132 Class Z PRUZX C000036071 Class R N-Q 1 dnq.htm PRUDENTIAL SECTOR FUNDS, INC. Prudential Sector Funds, Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

 

 

Investment Company Act file number:   811-03175
Exact name of registrant as specified in charter:  

Prudential Sector Funds, Inc.

(d/b/a JennisonDryden Sector Funds)

Address of principal executive offices:  

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Name and address of agent for service:  

Deborah A. Docs

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Registrant’s telephone number, including area code:   800-225-1852
Date of fiscal year end:   11/30/2009
Date of reporting period:   8/31/2009

 

 

 


Item 1. Schedule of Investments


Dryden Financial Services Fund

Schedule of Investments

as of August 31, 2009 (Unaudited)

 

Shares

  

Description

  

Value

LONG-TERM INVESTMENTS 90.3%

  

COMMON STOCKS 87.6%

  

Capital Markets 10.3%

  
183,700   

Ameriprise Financial, Inc.

   $ 5,516,511
27,600   

Goldman Sachs Group, Inc. (The)

     4,566,696
246,425   

UBS AG (Switzerland)

     4,536,543
         
        14,619,750
         

Commercial Banks 48.8%

  
69,200   

Banco Latinoamericano de Comercio Exterior SA (Panama)

     983,332
1,244,600   

Bangkok Bank PCL (Thailand)

     4,043,761
150,900   

Bank of Nova Scotia (Canada)

     6,321,328
46,547   

BNP Paribas (France)

     3,753,194
160,700   

Comerica, Inc.

     4,285,869
4,645,600   

Dah Sing Banking Group Ltd. (Hong Kong)

     5,334,638
726,800   

DnB NOR ASA (Norway)

     7,461,873
10,399   

Gronlandsbanken (Denmark)

     802,089
302,060   

Itau Unibanco Holding SA (Brazil), ADR

     5,059,505
298,931   

Nordea Bank AB (Sweden)

     3,135,454
705,100   

Popular, Inc.(a)

     1,515,965
166,563   

Republic First Bancorp, Inc.(a)

     1,029,359
4,946   

Ringkjoebing Landbobank A/S (Denmark)

     600,751
51,433   

Societe Generale (France)

     4,157,338
191,040   

Sparebanken Rogaland (Norway)

     1,152,326
236,578   

Standard Chartered PLC (United Kingdom)

     5,339,921
141,023   

Svenska Handelsbanken AB (Sweden) (Class A Stock)

     3,706,179
93,000   

Toronto-Dominion Bank (The) (Canada)

     5,749,477
32,500   

Webster Financial Corp.

     424,775
165,000   

Wells Fargo & Co.(b)

     4,540,800
         
        69,397,934
         

Consumer Finance 3.1%

  
324,900   

Discover Financial Services

     4,467,375
         

Diversified Financial Services 10.0%

  
335,500   

Bank of America Corp.

     5,901,445
51,599   

Deutsche Boerse AG (Germany)

     3,925,074
203,600   

NASDAQ OMX Group, Inc. (The)(a)

     4,469,020
         
        14,295,539
         

Insurance 13.0%

  
92,800   

ACE Ltd.

     4,842,304
237,500   

Hartford Financial Services Group, Inc.

     5,633,500
133,258   

Hilltop Holdings, Inc.(a)

     1,636,408
58,200   

Platinum Underwriters Holdings Ltd.

     2,109,750
7,600   

Transatlantic Holdings, Inc.

     371,336
171,600   

Unum Group(b)

     3,866,148
         
        18,459,446
         


IT Services 0.1%

  
24,200   

Companhia Brasileira de Meios de Pagamento (Brazil)

     205,829   
           

Thrifts & Mortgage Finance 2.3%

  
365,757   

Beneficial Mutual Bancorp, Inc.(a)

     3,251,580   
           
  

Total common stocks
(cost $85,423,633)

     124,697,453   
           

PREFERRED STOCK 2.7%

  

Commercial Banks

  
698,805   

Banco do Estado do Rio Grande do Sul SA (Brazil) (Class B Stock)
(cost $1,666,391)

     3,804,181   
           
  

Total long-term investments
(cost $87,090,024)

     128,501,634   
           

SHORT-TERM INVESTMENT 15.7%

  

Affiliated Money Market Mutual Fund

  
22,292,223   

Dryden Core Investment Fund - Taxable Money Market Series
(cost $22,292,223; includes $8,651,982 of cash collateral received for securities on loan)(c)(d)

     22,292,223   
           
  

Total Investments(e) 106.0%
(cost $109,382,247)(f)

     150,793,857   
  

Liabilities in excess of other assets (6.0%)

     (8,544,019
           
  

Net Assets 100.0%

   $ 142,249,838   
           

 

The following abbreviation is used in portfolio descriptions:

ADR – American Depositary Receipt

 

(a) Non-income producing security.
(b) All or a portion of a security is on loan. The aggregate market value of such securities is $8,322,879; cash collateral of $8,651,982 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.
(c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.
(d) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series.
(e) As of August 31, 2009, eleven securities representing $38,570,742 and 27.1% of net assets were fair valued in accordance with the policies adopted by the Board of Directors.
(f) The United States Federal income tax basis of the Fund’s investments and the net unrealized appreciation as of August 31, 2009 were as follows:

 

Tax Basis of

Investments

  Appreciation   Depreciation     Net Unrealized
Appreciation
$ 109,714,496   $ 42,067,903   $ (988,542   $ 41,079,361

The difference between book basis and tax basis was attributable to deferred losses on wash sales.


Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund’s assets carried at fair value:

 

     Level 1    Level 2    Level 3

Investments in Securities

        

Common Stocks

   $ 86,126,711    $ 38,570,742    $ —  

Preferred Stock

     3,804,181      —        —  

Affiliated Money Market Mutual Fund

     22,292,223      —        —  
                    
     112,223,115      38,570,742      —  

Other Financial Instruments*

     —        —        —  
                    

Total

   $ 112,223,115    $ 38,570,742    $ —  
                    

 

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of November 30, 2008 and August 31, 2009, the Fund did not use any significant unobservable inputs (Level 3) in determining the value of investments.


Jennison Health Sciences Fund

Schedule of Investments

as of August 31, 2009 (Unaudited)

 

Shares

  

Description

  

Value

LONG-TERM INVESTMENTS 97.0%

  

COMMON STOCKS 90.7%

  

Biotechnology 54.0%

  
516,056   

Acorda Therapeutics, Inc.(a)(b)

   $ 11,673,187
453,100   

Alexion Pharmaceuticals, Inc.(a)(b)

     20,452,934
2,412,100   

Allos Therapeutics, Inc.(a)(b)

     17,728,935
577,400   

AMAG Pharmaceuticals, Inc.(a)(b)

     23,696,496
225,300   

Amgen, Inc.(a)

     13,459,422
2,407,700   

Anadys Pharmaceuticals, Inc.(a)

     5,561,787
2,517,600   

Ariad Pharmaceuticals, Inc.(a)(b)

     5,513,544
1,002,200   

BioMarin Pharmaceutical, Inc.(a)(b)

     16,506,234
326,600   

Celgene Corp.(a)(b)

     17,038,722
197,000   

Cephalon, Inc.(a)(b)

     11,215,210
655,000   

Cytori Therapeutics, Inc.(a)(b)

     1,984,650
327,500   

Gilead Sciences, Inc.(a)(b)

     14,757,150
394,300   

Human Genome Sciences, Inc.(a)(b)

     7,799,254
2,266,800   

Incyte Corp. Ltd.(a)(b)

     14,938,212
2,000,000   

Ironwood Pharmaceutical (Microbia), Private Placement, Series E
(original cost $7,640,000; purchased 2/21/06)(a)(c)(d)

     26,091,760
160,000   

Ironwood Pharmaceutical (Microbia), Private Placement, Series F
(original cost $1,000,000; purchased 2/1/07)(a)(c)(d)

     2,087,341
960,512   

Merrimack Pharmaceuticals, Inc., Private Placement
(original cost $4,322,304; purchased 3/24/06)(a)(c)(d)

     5,327,382
801,700   

Orexigen Therapeutics, Inc.(a)(b)

     6,349,464
321,000   

Pharmasset, Inc.(a)

     5,925,660
355,300   

Regeneron Pharmaceuticals, Inc.(a)(b)

     8,075,969
246,600   

Targacept, Inc.(a)

     3,674,340
103,300   

United Therapeutics Corp.(a)(b)

     9,452,983
589,800   

Vertex Pharmaceuticals, Inc.(a)(b)

     22,064,418
         
        271,375,054
         

Healthcare Equipment & Supplies 7.3%

61,100   

Alcon, Inc.

     7,910,617
247,200   

Baxter International, Inc.

     14,070,625
80,500   

Beckman Coulter, Inc.

     5,451,460
1,145,493   

EnteroMedics, Inc., Private Placement
(original cost $1,317,317; purchased 2/20/09)(a)(c)(d)

     3,688,487
1,748,956   

EnteroMedics, Inc.(a)(b)

     5,631,638
4,000,000   

Lombard Medical Technologies PLC (United Kingdom)(a)

     97,677
         
        36,850,504
         

Healthcare Providers & Services 5.0%

56,600   

Air Methods Corp.(a)

     1,931,758
166,540   

AMERIGROUP Corp.(a)

     3,938,671
95,900   

CardioNet, Inc.(a)(b)

     690,480
128,000   

Emdeon, Inc. (Class A Stock)(a)

     2,232,320
42,000   

Express Scripts, Inc.(a)

     3,033,240
241,100   

Medco Health Solutions, Inc.(a)

     13,313,542
         
        25,140,011
         


Healthcare Technology

9,300   

Medidata Solutions, Inc.(a)

   147,498
         

Life Sciences Tools & Services 1.5%

56,100   

Life Technologies Corp.(a)(b)

   2,498,133
415,600   

WuXi PharmaTech Cayman, Inc. (China), ADR(a)

   4,879,144
         
      7,377,277
       

Pharmaceuticals 22.9%

626,395   

Ardea Biosciences, Inc.(a)(b)

   11,112,247
1,317,200   

ARYx Therapeutics, Inc.(a)(b)

   4,531,168
306,100   

Auxilium Pharmaceuticals, Inc.(a)(b)

   8,812,619
204,400   

Cumberland Pharmaceuticals, Inc.(a)

   3,421,656
1,312,100   

Impax Laboratories, Inc.(a)

   9,958,839
1,456,200   

Inspire Pharmaceuticals, Inc.(a)

   8,693,514
771,400   

MAP Pharmaceuticals, Inc.(a)(b)

   6,819,176
1,032,700   

Mylan, Inc.(a)(b)

   15,149,709
194,400   

Roche Holding AG (Switzerland), ADR

   7,744,896
379,700   

Shire PLC (United Kingdom), ADR

   18,817,932
144,800   

Teva Pharmaceutical Industries Ltd. (Israel), ADR

   7,457,200
684,500   

XenoPort, Inc.(a)(b)

   12,478,435
       
      114,997,391
       
  

Total common stocks
(cost $332,608,293)

   455,887,735
       

Principal
Amount (000)

         

CONVERTIBLE BOND 0.1%

Biotechnology 0.1%

$   418   

Cephalon, Inc., 2.500%, 5/01/14,
(cost $418,000)

   433,153
       

Shares

         

PREFERRED STOCKS 4.9%

Biotechnology 0.9%

1,400,000   

Chemocentryx, Inc., Private Placement, Series C
(original cost $4,900,000; purchased 6/13/06)(a)(c)(d)

   4,637,832
       

Healthcare Equipment & Supplies 0.7%

77,000   

superDimension Ltd., Private Placement, Series D-1
(original cost $1,650,110; purchased 5/23/08)(a)(c)(d)

   1,944,651
63,000   

superDimension Ltd., Private Placement, Series D-2
(original cost $1,350,090; purchased 5/23/08)(a)(c)(d)

   1,591,078
       
      3,535,729
       

Pharmaceuticals 3.3%

  2,200,000   

Eagle Pharmaceuticals, Inc., Private Placement, Series B
(original cost $4,004,000; purchased 8/11/08)(a)(c)(d)

   4,488,088

12,330

  

Mylan, Inc.

   11,959,483
       
      16,447,571
       
  

Total preferred stocks
(cost $18,957,108)

   24,621,132
       


Units

         

WARRANTS(a)(g) 1.3%

Biotechnology 0.4%

679,000   

Anadys Pharmaceuticals, Inc., expiring 6/09/14, Private Placement
(original cost $0; purchased 6/4/09)(c)(d)

   721,044
4,365,000   

ConjuChem Biotechnologies, Inc. (Canada), expiring 11/28/09, Private Placement
(original cost $382,727; purchased 11/22/06)(c)(d)

   —  
227,400   

Cytori Therapeutics, Inc., expiring 2/28/12, Private Placement
(original cost $31,836; purchased 2/23/07)(c)(d)

   61,184
222,500   

Cytori Therapeutics, Inc., expiring 8/11/13, Private Placement
(original cost $0; purchased 8/11/08)(c)(d)

   70,757
700,000   

Insmed, Inc., expiring 11/8/09, Private Placement
(original cost $0; purchased 11/8/04)(c)(d)

   55
2,850,000   

Titan Pharmaceuticals, Inc., expiring 12/21/12, Private Placement
(original cost $0; purchased 12/21/07)(c)(d)

   1,504,033
       
      2,357,073
       

Healthcare Equipment & Supplies 0.6%

1,360,825   

EnteroMedics, Inc., expiring 2/20/13, Private Placement
(original cost $170,103; purchased 2/20/09)(c)(d)

   2,876,142
600,000   

Lombard Medical Technologies (United Kingdom), Warrant A, expiring 6/15/10, Private Placement
(original cost, $0; purchased 7/10/07)(c)(d)

   —  
600,000   

Lombard Medical Technologies (United Kingdom), Warrant B, expiring 6/15/12, Private Placement
(original cost $0; purchased 7/10/07)(c)(d)

   —  
       
      2,876,142
       

Pharmaceuticals 0.3%

341,250   

Akorn, Inc., expiring 3/8/11, Private Placement
(original cost $0; purchased 3/8/06)(c)(d)

   1,333
94,275   

Ardea Biosciences, Inc., expiring 12/19/13, Private Placement
(original cost $11,784; purchased 12/19/08)(c)(d)

   811,702
357,600   

ARYx Therapeutics, Inc., expiring 11/13/13, Private Placement
(original cost $44,700; purchased 11/13/08)(c)(d)

   688,892
       
      1,501,927
       
  

Total warrants
(cost $641,150)

   6,735,142
       
  

Total long-term investments
(cost $352,624,551)

   487,677,162
       


Shares

           

SHORT-TERM INVESTMENT 30.3%

  

Affiliated Money Market Mutual Fund

  

152,603,906   

Dryden Core Investment Fund - Taxable Money Market Series
(cost $152,603,906; includes $141,338,670 of cash collateral received for securities on loan)(e)(f)

     152,603,906   
           
  

Total Investments(h) 127.3%
(cost $505,228,457)(i)

     640,281,068   
  

Liabilities in excess of other assets (27.3%)

     (137,396,795
           
  

Net Assets 100.0%

   $ 502,884,273   
           

 

The following abbreviations are used in the portfolio descriptions:

ADR – American Depositary Receipt.

 

(a) Non-income producing securities.
(b) All or a portion of security is on loan. The aggregate market value of such securities is $134,800,547; cash collateral of $141,338,670 (included in liabilities) was received with which the portfolio purchased highly liquid short-term instruments.
(c) Indicates a restricted security; the aggregate original cost of the restricted securities is $26,824,971. The aggregate value of $56,591,761 is approximately 11.3% of net assets.
(d) Indicates a security that has been deemed illiquid.
(e) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.
(f) Prudential Investments LLC, the manager of the Fund, also serves as the manager of the Dryden Core Investment Fund – Taxable Money Market Series.
(g) The amount represents fair value of derivative instruments subject to equity contracts risk exposure as of August 31, 2009.
(h) As of August 31, 2009, 19 securities representing $52,903,274 and 10.5 % of the net assets were fair valued in accordance with the policies adopted by the Board of Directors.
(i) The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of August 31, 2009 were as follows:

 

Tax Basis of
Investments

  Gross
Appreciation
  Gross
Depreciation
    Net Unrealized
Appreciation
$506,588,544   $ 145,079,070   $ (11,386,546   $ 133,692,524

The difference between the book basis and the tax basis was primarily attributable to deferred losses on wash sales.


Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund’s assets carried at fair value:

 

     Level 1    Level 2    Level 3

Investments in Securities

        

Common Stocks

   $ 422,381,252    $ —      $ 33,506,483

Convertible Bond

     —        433,153      —  

Preferred Stocks

     11,959,483      —        12,661,649

Warrants

     —        —        6,735,142

Affiliated Money Market Mutual Fund

     152,603,906      —        —  
                    
   $ 586,944,641    $ 433,153    $ 52,903,274

Other Financial Instruments*

     —        —        —  
                    

Total

   $ 586,944,641    $ 433,153    $ 52,903,274
                    

 

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     Common Stocks     Preferred Stocks    Warrants

Balance as of 11/30/08

   $ 48,994,396      $ 11,274,200    $ 528,254

Realized gain (loss)

     —          —        —  

Change in unrealized appreciation (depreciation)

     2,687,872        1,387,449      6,025,001

Net purchases (sales)

     —          —        181,887

Transfers in and/or out of Level 3

     (18,175,785     —     
                     

Balance as of 8/31/09

   $ 33,506,483      $ 12,661,649    $ 6,735,142
                     


Jennison Utility Fund

Schedule of Investments

as of August 31, 2009 (Unaudited)

 

Shares

  

Description

  

Value

LONG-TERM INVESTMENTS 97.4%

  

COMMON STOCKS 93.3%

  

Commercial Services & Supplies 1.1%

  
3,039,500   

EnergySolutions, Inc.

   $ 26,990,760
         

Construction & Engineering 1.0%

  
1,578,900   

Chicago Bridge & Iron Co., NV(b)

     24,851,886
         

Diversified Telecommunication Services 5.9%

  
3,823,800   

Alaska Communications Systems Group, Inc.

     30,475,686
3,669,527   

Chungwa Telecom Co. Ltd., ADR (Taiwan)(b)

     62,748,918
1,667,700   

Consolidated Communications Holdings, Inc.

     23,514,570
1,871,700   

Koninklijke KPN NV (Netherlands)

     28,808,432
1,706,000   

Maxcom Telecomunicacione SAB De CV, ADR (Mexico)(a)

     5,561,560
         
        151,109,166
         

Electric Utilities 25.0%

  
2,134,200   

Allegheny Energy, Inc.(b)

     56,364,222
1,426,600   

American Electric Power Co., Inc.(b)

     44,838,038
559,100   

CEZ AS (Czech Republic)

     29,258,198
1,880,250   

Cia Energetica de Minas Gerais, ADR (Brazil)

     27,470,453
2,026,200   

Cleco Corp.

     49,479,804
679,500   

CPFL Energia SA (Brazil)

     11,944,520
725,300   

CPFL Energia SA 144A (Brazil)
(original cost $11,395,643; purchased 5/19/09)(e)(f)

     12,749,609
863,600   

Edison International

     28,852,876
956,229   

Entergy Corp.

     75,542,090
658,900   

Exelon Corp.

     32,958,178
1,335,789   

Great Plains Energy, Inc.

     23,403,023
3,649,936   

Iberdrola SA (Spain)

     33,889,327
2,957,600   

NV Energy, Inc.

     35,668,656
1,439,600   

Pepco Holdings, Inc.

     20,629,468
1,264,400   

Portland General Electric Co.

     24,681,088
1,309,800   

PPL Corp.(b)

     38,508,120
983,000   

Progress Energy, Inc.(b)

     38,857,990
1,667,500   

Southern Co. (The)

     52,026,000
         
        637,121,660
         

Electrical Equipment 0.6%

  
117,000   

First Solar, Inc.(a)(b)

     14,224,860
         

Electronic Equipment & Instruments 0.2%

  
110,700   

Itron, Inc.(a)(b)

     6,065,253
         

Gas Utilities 7.0%

  
1,601,712   

Enagas (Spain)

     31,660,740
826,960   

Energen Corp.

     34,724,050
1,012,300   

EQT Corp.(b)

     40,157,941
1,496,400   

ONEOK, Inc.

     50,698,032
633,700   

Questar Corp.

     21,393,712
         
        178,634,475
         


Independent Power Producers & Energy Traders 11.7%

  
3,614,200   

AES Corp. (The)(a)(b)

   49,406,114
2,392,735   

Constellation Energy Group, Inc.

   75,730,063
2,300,000   

MPX Energia SA (Brazil), 144A
(original cost $65,214,608, purchased 12/13/07)(e)(f)

   20,990,078
4,376,200   

NRG Energy, Inc.(a)(b)

   117,500,970
1,731,100   

TransAlta Corp. (Canada)

   33,712,767
       
      297,339,992
       

Media 1.5%

  
1,033,478   

Time Warner Cable, Inc.

   38,156,008
       

Multi-Utilities 16.7%

  
3,268,400   

Centerpoint Energy, Inc.

   40,528,160
10,362,400   

Centrica PLC (United Kingdom)

   42,349,501
4,226,000   

CMS Energy Corp.(b)

   56,670,660
720,900   

Dominion Resources, Inc.

   23,847,372
4,189,300   

NiSource, Inc.

   55,340,653
1,267,600   

PG&E Corp.(b)

   51,451,884
1,363,100   

Public Service Enterprise Group, Inc.

   43,169,377
1,707,600   

Sempra Energy

   85,670,292
1,338,800   

Xcel Energy, Inc.

   26,441,300
       
      425,469,199
       

Oil, Gas & Consumable Fuels 8.6%

  
70,460   

Alpha Natural Resources, Inc.(a)(b)

   2,276,563
1,874,953   

Copano Energy LLC

   29,118,020
421,000   

Copano Energy LLC – D Units, Private Placement
(cost $11,051,250; purchased 3/14/08)(e)(f)

   6,068,039
447,300   

Crescent Point Energy Corp.

   14,995,122
1,791,200   

Energy Transfer Equity LP

   48,165,367
3,749,970   

OPTI Canada, Inc. (Canada)(a)

   5,788,947
921,800   

Petrohawk Energy Corp.(a)

   19,846,354
1,354,849   

Regency Energy Partners LP(b)

   22,056,942
2,345,594   

Trident Resources Corp. (Canada), Private Placement
(cost $34,626,921; purchased 12/4/03-3/9/06)(a)(e)(f)(i)

   —  
1,369,000   

Williams Cos., Inc. (The)

   22,506,360
1,060,019   

Williams Partners LP(b)

   21,041,377
693,000   

XTO Energy, Inc.

   26,749,800
       
      218,612,891
       

Real Estate Investment Trust (REIT) 0.8%

  
480,200   

Digital Realty Trust, Inc.(b)

   20,927,116
       

Road & Rail 1.0%

  
421,000   

Union Pacific Corp.

   25,180,010
       

Transportation Infrastructure 1.3%

750,500   

Aegean Marine Petroleum Network, Inc.

   15,445,290
736,500   

Atlantia SpA (Italy)

   16,439,898
       
      31,885,188
       


Water Utilities 0.8%

  
1,012,100   

American Water Works Co., Inc.

   20,343,210
       

Wireless Telecommunication Services 10.1%

  
1,581,600   

American Tower Corp. (Class A Stock)(a)

   50,057,640
1,726,900   

Centennial Communications Corp.(a)(b)

   13,072,633
2,191,501   

Crown Castle International Corp.(a)(b)

   58,863,717
1,202,948   

Leap Wireless International, Inc.(a)(b)

   19,836,613
4,016,920   

MetroPCS Communications, Inc.(a)(b)

   31,974,683
2,484,000   

NII Holdings, Inc.(a)

   58,895,640
1,101,748   

Vivo Participacoes S.A., ADR (Brazil)(b)

   25,075,784
       
      257,776,710
       
  

Total common stocks
(cost $2,467,639,799)

   2,374,688,384
       

Principal
Amount (000)

          

CONVERTIBLE BOND 1.7%

  

Wireless Telecommunication Services

  
51,166   

NII Holdings, Inc., 3.125%, expiring 6/15/12
(cost $29,938,930)

   43,363,185
       

CORPORATE BOND

  

Oil, Gas & Consumable Fuels

  
CAD   10,886   

Trident Resources Corp., (Canada) Sub. Unsec’d Note, Private Placement, PIK,
due 8/12/12
(cost $10,220,777; purchased 8/20/07-8/31/09)(a)(e)(f)(i)

   —  
         

Shares

          

PREFERRED STOCKS 2.4%

  

Electric Utilities 2.4%

  

30,435

  

China Hydroelectric Corp., 144A, Private Placement
(original cost $30,000,000; purchased 1/24/08)(a)(e)(f)

   31,447,755
16,000   

China Hydroelectric Corp., Series B, Private Placement
(original cost $16,000,000; purchased 7/24/08)(a)(e)(f)

   16,532,416
226,100   

Great Plains Energy, Inc.

   13,792,100
       
      61,772,271
       

Oil, Gas & Consumable Fuels

  
160,000   

Trident Resources Corp. (Canada), Series B, Private Placement,
(original cost $10,000,000; purchased 7/7/06)(a)(e)(f)(i)

   —  
       
  

Total preferred stocks
(cost $67,305,000)

   61,772,271
       


Units

           

WARRANTS

  

Oil, Gas & Consumable Fuels

  
732,600   

Rentech, Inc. expiring 04/20/12, Private Placement
(cost $0; purchased 4/23/07)(a)(e)(f)

     324,933   
879,216   

Trident Resources Corp. (Canada), Private Placement, expiring 1/01/15
(cost $0; purchased 8/20/07)(a)(e)(f)(i)

     —     
           
        324,933   
           
  

Total warrants(h)
(cost $0)

     324,933   
           
  

Total long-term investments
(cost $2,575,104,506)

     2,480,148,773   
           

Shares

           

SHORT-TERM INVESTMENT 15.3%

  

Affiliated Money Market Mutual Fund

  
389,527,108   

Dryden Core Investment Fund - Taxable Money Market Series
(cost $389,527,108; includes $326,708,981 of cash collateral received for securities
on loan)(c)(g)

     389,527,108   
           
  

Total Investments(d) 112.7%
(cost $2,964,631,614)(j)

     2,869,675,881   
  

Liabilities in excess of other assets (12.7%)

     (323,155,911
           
  

Net Assets 100.0%

   $ 2,546,519,970   
           

 

The following abbreviations are used in the portfolio descriptions:

ADR – American Depositary Receipt.

CAD – Canadian Dollars

PIK – Payment In Kind

144A – Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

 

(a) Non-income producing security.
(b) All or a portion of security is on loan. The aggregate market value of such securities is $308,402,274; cash collateral of $326,708,981 (included in liabilities) was received with which the portfolio purchased highly liquid short-term investments.
(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.
(d) As of August 31, 2009, 14 securities representing $236,779,239 and 9.3% of net assets were fair valued in accordance with the policies adopted by the Board of Directors.
(e) Indicates security is restricted to resale. The aggregate cost of such securities is $188,509,199. The aggregate market value of $88,112,830 is approximately 3.5% of net assets.
(f) Indicates a security that has been deemed illiquid.
(g) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Dryden Core Investment Fund – Taxable Money Market Series.
(h) The amount represents fair value of derivative instruments subject to equity contracts risk exposure as of August 31, 2009.
(i) The issuer has since filed for bankruptcy and has defaulted in the payment of interest on debt security. The security has been fair valued at zero.
(j) The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of August 31, 2009 were as follows:

 

Tax Basis of

Investments

  Appreciation   Depreciation     Net Unrealized
Depreciation
 
$ 2,966,399,783   $ 372,265,588   $ (468,989,490   $ (96,723,902


Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund’s assets carried at fair value:

 

     Level 1    Level 2    Level 3  

Investments in Securities

        

Common Stocks

   $ 2,186,214,249    $ 182,406,096    $ 6,068,039   

Convertible Bond

     —        43,363,185      —     

Corporate Bond

     —        —        —   (a) 

Preferred Stocks

     13,792,100      —        47,980,171   

Warrants

     —        —        324,933   

Affiliated Money Market Mutual Fund

     389,527,108      —        —     
                      
     2,589,533,457      225,769,281      54,373,143   

Other Financial Instruments*

     —        —        —     
                      

Total

   $ 2,589,533,457    $ 225,769,281    $ 54,373,143   
                      

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     Common Stocks     Corporate Bond     Preferred Stocks     Warrants

Balance as of 11/30/08

   $ 22,999,965      $ 3,842,134      $ 48,435,000      $ 111,841

Realized gain (loss)

     —          —          —          —  

Change in unrealized appreciation (depreciation)

     (16,931,926     (4,321,504     (454,829     213,092

Earned amortization/accretion

     —          65        —          —  

Net purchases (sales)

     —          479,305        —          —  

Transfers in and/or out of Level 3

     —          —          —          —  
                              

Balance as of 8/31/09

   $ 6,068,039      $ —   (a)    $ 47,980,171      $ 324,933
                              

 

 

(a) As of August 31, 2009, the Fund held one corporate bond in the portfolio, which is fair valued at zero.
* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


Notes to Schedule of Investments (Unaudited)

Securities Valuation: Securities listed on a securities exchange (other than options on securities and indices) are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the NASDAQ official closing price (“NOCP”) on the day of valuation, or if there was no NOCP, at the last sale price. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”), in consultation with the subadvisor, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker.

Securities for which market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Fund’s normal pricing time, are valued at fair value in accordance with the Board of Directors’ approved fair valuation procedures. When determining the fair value of securities some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

Health Sciences Fund and Utility Fund held illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). The restricted securities held by the Funds as of August 31, 2009 may include registration rights. Restricted securities, sometimes referred to as private placements, are valued pursuant to the valuation procedures noted above.

Market value of investments traded in a foreign currency are translated into U.S. dollars at the current rates of exchange.

Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange or at the last bid price in the absence of an asked price.

Investments in mutual funds are valued at the net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities which mature in sixty days or less are valued at amortized cost, which approximates fair value. The amortized cost method includes valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term debt securities which mature in more than sixty days, are valued at current market quotations.

The Funds invest in the Taxable Money Market Series (the “Portfolio”), a portfolio of Dryden Core Investment Fund. The Portfolio is a money market mutual fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Other information regarding the Funds is available in the Funds’ most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov).


Item 2. Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Item 3. Exhibits

Certifications pursuant to 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.

(Registrant) Prudential Sector Funds, Inc.

 

By (Signature and Title)*   /S/    DEBORAH A. DOCS            
  Deborah A. Docs    
  Secretary of the Fund    

Date October 22, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*   /S/    JUDY A. RICE            
  Judy A. Rice    
  President and Principal Executive Officer    

Date October 22, 2009

 

By (Signature and Title)*   /S/    GRACE C. TORRES            
  Grace C. Torres    
  Treasurer and Principal Financial Officer    

Date October 22, 2009

 

* Print the name and title of each signing officer under his or her signature.
EX-99.CERT 2 dex99cert.htm CERTIFICATIONS Certifications

CERTIFICATIONS

I, Judy A. Rice, certify that:

 

1. I have reviewed this report on Form N-Q of Prudential Sector Funds, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 22, 2009    

/s/ Judy A. Rice

    Judy A. Rice
    President and Principal Executive Officer

 


CERTIFICATIONS

I, Grace C. Torres, certify that:

 

1. I have reviewed this report on Form N-Q of Prudential Sector Funds, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 22, 2009    

/s/ Grace C. Torres

    Grace C. Torres
    Treasurer and Principal Financial Officer
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