N-Q 1 fi_nq.htm N-Q Unassociated Document
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: 811-00032



Fundamental Investors, Inc.
(Exact name of registrant as specified in charter)

P.O. Box 7650, One Market, Steuart Tower,
San Francisco, California 94120
(Address of principal executive offices)




Registrant's telephone number, including area code: (415) 421-9360

Date of fiscal year end: December 31

Date of reporting period: March 31, 2007





Patrick F. Quan
Capital Research and Management Company
P.O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Name and address of agent for service)


Copies to:
Michael Glazer
Paul, Hastings, Janofsky & Walker LLP
515 South Flower Street
Los Angeles, California 90071
(Counsel for the registrant)

 
 
 

ITEM 1 - Schedule of Investments
 
[logo - American Funds®]



Fundamental InvestorsSM
Investment portfolio

March 31, 2007
   
unaudited
     
   
Market value
Common stocks — 95.21%
Shares
(000)
     
ENERGY — 14.01%
    
Suncor Energy Inc.
17,922,637
$1,365,927
Norsk Hydro ASA
10,840,000
360,278
Norsk Hydro ASA (ADR)
3,500,000
114,870
Royal Dutch Shell PLC, Class A (ADR)
6,370,000
422,331
Chevron Corp.
5,285,674
390,928
CONSOL Energy Inc.1
7,400,000
289,562
Baker Hughes Inc.
4,193,000
277,283
OAO LUKOIL (ADR)
3,200,000
276,800
Murphy Oil Corp.
4,343,636
231,950
Exxon Mobil Corp.
3,000,000
226,350
Occidental Petroleum Corp.
4,334,244
213,722
Devon Energy Corp.
3,000,000
207,660
EnCana Corp.
4,000,000
202,655
Smith International, Inc.
3,825,000
183,791
Halliburton Co.
4,460,000
141,560
Schlumberger Ltd.
2,000,000
138,200
Imperial Oil Ltd.
3,608,739
133,993
Quicksilver Resources Inc.2
2,555,000
101,612
Shell Canada Ltd.
2,538,600
98,994
Marathon Oil Corp.
875,000
86,476
ConocoPhillips
1,153,413
78,836
Petro-Canada
2,000,000
78,338
Oil & Natural Gas Corp. Ltd.
3,637,500
74,337
Spectra Energy Corp
2,007,000
52,724
Massey Energy Co.
2,011,700
48,261
Cameco Corp.
1,000,000
41,034
CNX Gas Corp.1,2
287,500
8,145
   
5,846,617
     
INDUSTRIALS — 13.06%
    
Deere & Co.
5,660,000
614,902
Union Pacific Corp.
4,200,000
426,510
Boeing Co.
4,500,000
400,095
Caterpillar Inc.
5,400,000
361,962
General Electric Co.
8,850,000
312,936
Northrop Grumman Corp.
4,166,243
309,219
Deutsche Post AG
8,945,000
271,062
General Dynamics Corp.
3,545,800
270,899
Parker Hannifin Corp.
2,800,000
241,668
Emerson Electric Co.
4,400,000
189,596
Finmeccanica SpA
6,000,000
180,776
Mitsubishi Corp.
7,245,800
168,471
Mitsubishi Heavy Industries, Ltd.
23,388,000
151,506
American Standard Inc.
2,832,300
150,169
Raytheon Co.
2,832,732
148,605
AMR Corp.2
4,850,000
147,682
Tyco International Ltd.
4,500,000
141,975
Grafton Group PLC, units
7,500,000
112,835
Joy Global Inc.
2,500,000
107,250
Illinois Tool Works Inc.
1,976,000
101,962
United Technologies Corp.
1,500,000
97,500
Waste Management, Inc.
2,800,000
96,348
Kingspan Group PLC
3,500,000
92,909
United Parcel Service, Inc., Class B
1,200,000
84,120
Fastenal Co.
2,200,000
77,110
Siemens AG
703,000
75,229
Avery Dennison Corp.
966,400
62,101
Allied Waste Industries, Inc.2
2,500,000
31,475
Lockheed Martin Corp.
248,200
24,080
   
5,450,952
     
INFORMATION TECHNOLOGY — 11.98%
    
Microsoft Corp.
28,200,000
785,934
Nokia Corp.
18,900,000
435,488
Nokia Corp. (ADR)
11,237,000
257,552
Oracle Corp.2
26,500,000
480,445
Texas Instruments Inc.
15,083,024
453,999
International Business Machines Corp.
3,000,000
282,780
Comverse Technology, Inc.2,3
13,130,000
280,326
Yahoo! Inc.2
7,000,000
219,030
Agilent Technologies, Inc.2 
6,425,000
216,458
Motorola, Inc.
9,256,080
163,555
Kyocera Corp.
1,725,000
162,924
Sun Microsystems, Inc.2 
24,000,000
144,240
Google Inc., Class A2
300,000
137,448
Linear Technology Corp.
3,900,000
123,201
Advanced Micro Devices, Inc.2
6,750,000
88,155
Xilinx, Inc.
3,100,000
79,763
Sabre Holdings Corp., Class A
2,345,304
76,809
Paychex, Inc.
2,000,000
75,740
Microchip Technology Inc.
2,097,222
74,514
EMC Corp.2
5,200,000
72,020
Nortel Networks Corp.2
2,800,000
67,213
Ceridian Corp.2
1,900,000
66,196
ASML Holding NV2
2,500,000
61,817
Intersil Corp., Class A
2,000,000
52,980
Hewlett-Packard Co.
1,000,000
40,140
Corning Inc.2
1,520,000
34,565
CDW Corp.
545,000
33,479
Murata Manufacturing Co., Ltd.
300,000
21,933
Konica Minolta Holdings, Inc.
937,500
12,337
   
5,001,041
     
     
FINANCIALS — 11.12%
    
Fannie Mae
8,167,800
$ 445,799
Citigroup Inc.
8,505,000
436,647
Allied Irish Banks, PLC
13,800,000
409,695
Freddie Mac
6,465,000
384,603
Washington Mutual, Inc.
8,580,000
346,460
Bank of Ireland
11,903,097
257,076
AMP Ltd.
25,000,202
210,451
Irish Life & Permanent PLC
7,000,000
192,371
Crédit Agricole SA
4,000,000
156,143
Marsh & McLennan Companies, Inc.
5,095,000
149,232
XL Capital Ltd., Class A
1,980,000
138,521
CapitalSource Inc.
5,400,954
135,726
Wells Fargo & Co.
3,940,000
135,654
Equity Residential, shares of beneficial interest
2,500,000
120,575
AFLAC Inc.
2,400,000
112,944
Berkshire Hathaway Inc., Class A2
1,000
108,990
Wachovia Corp.
1,524,900
83,946
Commerzbank U.S. Finance, Inc.
1,770,000
78,396
St. George Bank Ltd.
2,450,279
69,542
Suruga Bank Ltd.
5,310,000
69,337
Marshall & Ilsley Corp.
1,490,000
69,002
Willis Group Holdings Ltd.
1,742,142
68,954
Aon Corp.
1,767,400
67,090
Sompo Japan Insurance Inc.
5,305,000
66,250
Old Republic International Corp.
2,914,000
64,458
American International Group, Inc.
950,000
63,859
T. Rowe Price Group, Inc.
1,200,000
56,628
Zions Bancorporation
650,000
54,938
Mellon Financial Corp.
1,000,000
43,140
City National Corp.
460,000
33,856
Cathay Financial Holding Co., Ltd. (GDR)
491,632
10,103
   
4,640,386
     
HEALTH CARE — 10.09%
    
Roche Holding AG
3,575,000
633,970
Merck & Co., Inc.
12,659,700
559,179
Eli Lilly and Co.
7,470,000
401,214
Abbott Laboratories
6,310,000
352,098
Bristol-Myers Squibb Co.
9,350,000
259,556
Schering-Plough Corp.
10,000,000
255,100
Shire PLC (ADR)
3,500,000
216,650
Medtronic, Inc.
3,525,200
172,946
Sanofi-Aventis
1,900,000
165,411
Wyeth
3,000,000
150,090
WellPoint, Inc.2
1,634,953
132,595
McKesson Corp.
2,100,000
122,934
CIGNA Corp.
725,000
103,428
Patterson Companies, Inc.2
2,892,100
102,641
Forest Laboratories, Inc.2
1,700,000
87,448
Aetna Inc.
1,960,000
85,828
Amgen Inc.2
1,350,000
75,438
MedImmune, Inc.2
2,000,000
72,780
Novo Nordisk A/S, Class B
640,000
58,492
UCB SA
811,450
47,280
Sepracor Inc.2
1,000,000
46,630
Medco Health Solutions, Inc.2
463,000
33,581
Stryker Corp.
443,200
29,393
AstraZeneca PLC (ADR)
500,000
26,825
C. R. Bard, Inc.
250,900
19,949
   
4,211,456
     
MATERIALS — 9.75%
    
Alcoa Inc.
10,173,800
344,892
Rohm and Haas Co.
6,000,000
310,320
Syngenta AG2
1,592,750
305,439
Mosaic Co.2
10,500,000
279,930
Weyerhaeuser Co.
3,583,000
267,793
Bayer AG
3,788,000
242,343
International Paper Co.
6,516,000
237,182
E.I. du Pont de Nemours and Co.
4,500,000
222,435
Potash Corp. of Saskatchewan Inc.
1,379,700
220,655
Vulcan Materials Co.
1,800,000
209,664
PPG Industries, Inc.
2,500,000
175,775
Rio Tinto PLC
3,066,709
175,215
Sealed Air Corp.
4,882,000
154,271
Freeport-McMoRan Copper & Gold Inc.
2,000,000
132,380
BHP Billiton Ltd.
4,675,000
113,214
Newmont Mining Corp.
2,500,000
104,975
Dow Chemical Co.
2,000,000
91,720
Temple-Inland Inc.
1,500,000
89,610
Barrick Gold Corp.
3,001,495
85,693
CRH PLC
1,947,274
83,331
RPM International, Inc.
3,320,000
76,692
USX Corp.
650,000
64,461
Lyondell Chemical Co.
1,450,000
43,457
UPM-Kymmene Corp. (ADR)
1,400,000
35,742
   
4,067,189
     
CONSUMER DISCRETIONARY — 8.45%
    
Lowe’s Companies, Inc.
17,010,000
535,645
Target Corp.
7,490,000
443,857
Limited Brands, Inc.
10,815,980
281,865
Johnson Controls, Inc.
2,500,000
236,550
Fortune Brands Inc.
3,000,000
236,460
Toyota Motor Corp.
3,000,000
192,553
Federated Department Stores, Inc.
4,000,000
180,200
Time Warner Inc.
9,000,000
177,480
Best Buy Co., Inc.
3,633,000
177,000
Carnival Corp., units
3,600,000
168,696
Sony Corp.
3,000,000
152,767
Starbucks Corp.2
4,869,300
152,701
CBS Corp., Class B
4,000,000
122,360
Magna International Inc., Class A
1,474,300
110,735
McDonald’s Corp.
2,100,000
94,605
Nikon Corp.
3,977,000
84,016
Virgin Media Inc.2
2,900,000
73,225
News Corp., Class A
2,400,000
55,488
Yue Yuen Industrial (Holdings) Ltd.
15,221,000
51,625
   
3,527,828
     
     
CONSUMER STAPLES — 6.48%
    
Altria Group, Inc.
10,474,800
$ 919,792
Coca-Cola Co.
6,300,000
302,400
Diageo PLC
11,239,200
227,805
Diageo PLC (ADR)
15,200
1,230
PepsiCo, Inc.
3,100,000
197,036
Procter & Gamble Co.
2,829,000
178,680
C&C Group PLC
11,252,418
171,094
Bunge Ltd.
1,932,000
158,849
SYSCO Corp.
4,000,000
135,320
Avon Products, Inc.
2,280,000
84,953
Wm. Wrigley Jr. Co.
1,400,000
71,302
Tesco PLC
7,565,000
66,167
Goodman Fielder Ltd.
31,711,000
62,689
Kirin Brewery Co., Ltd.
3,966,000
57,384
ConAgra Foods, Inc.
2,000,000
49,820
General Mills, Inc.
311,500
18,136
   
2,702,657
     
TELECOMMUNICATION SERVICES — 5.13%
    
AT&T Inc.
16,931,036
667,591
KDDI Corp.
69,028
552,201
Verizon Communications Inc.
6,500,000
246,480
Sprint Nextel Corp., Series 1
11,800,000
223,728
Vodafone Group PLC
67,783,000
180,826
Vodafone Group PLC (ADR)
221,700
5,955
Qwest Communications International Inc.2
20,500,000
184,295
Inmarsat PLC
8,585,000
64,904
Embarq Corp.
270,000
15,214
   
2,141,194
     
UTILITIES — 3.66%
    
Questar Corp.
3,000,000
267,630
Dominion Resources, Inc.
2,790,000
247,669
Exelon Corp.
3,545,000
243,577
SUEZ SA
2,915,400
153,923
Veolia Environnement
2,000,000
148,868
Electricité de France SA
1,334,000
111,961
E.ON AG
800,000
108,888
Public Service Enterprise Group Inc.
1,000,000
83,040
Duke Energy Corp.
4,014,000
81,444
FPL Group, Inc.
1,050,000
64,229
Entergy Corp.
150,000
15,738
   
1,526,967
     
MISCELLANEOUS — 1.48%
    
Other common stocks in initial period of acquisition
  
617,789
     
     
Total common stocks (cost: $28,683,360,000)
  
39,734,076
     
     
     
 
Principal amount
Market value
Convertible securities — 0.03%
(000)
(000)
     
INFORMATION TECHNOLOGY — 0.03%
    
ASML Holding NV 5.50% convertible notes 2010
€6,000
$ 11,173
     
     
Total convertible securities (cost: $7,011,000)
  
11,173
     
     
     
     
     
Short-term securities — 4.65%
    
     
Bank of America Corp. 5.22%-5.24% due 4/9-6/15/2007
$192,151
191,495
Ranger Funding Co. LLC 5.25% due 4/18/20071
11,900
11,869
Procter & Gamble International Funding S.C.A. 5.21%-5.23% due 4/9-6/18/20071 
163,600
162,704
International Lease Finance Corp. 5.205%-5.22% due 4/2-5/18/2007
81,200
80,979
American General Finance Corp. 5.22% due 5/17/2007
50,000
49,659
AIG Funding, Inc. 5.20% due 4/23/2007
25,000
24,917
IBM Corp. 5.22%-5.225% due 5/4-6/22/20071
103,200
102,397
IBM Capital Inc. 5.195% due 6/18/20071
50,000
49,437
Wal-Mart Stores Inc. 5.21%-5.22% due 5/8-6/12/20071
135,775
134,559
Variable Funding Capital Corp. 5.235%-5.25% due 4/3-5/3/20071
126,400
126,126
Coca-Cola Co. 5.18%-5.21% due 4/16-6/25/20071 
108,500
107,710
Atlantic Industries 5.21% due 4/26/20071 
12,000
11,955
Johnson & Johnson 5.18% due 4/9-6/7/20071
117,525
117,008
Jupiter Securitization Co., LLC 5.22%-5.26% due 4/12-5/2/20071
50,437
50,352
J.P. Morgan Chase & Co. 5.23% due 4/11-5/14/2007
45,100
44,934
Park Avenue Receivables Co., LLC 5.22% due 5/10/20071
10,000
9,944
Federal Home Loan Bank 5.13%-5.17% due 4/20-5/9/2007
99,493
99,060
3M Co. 5.18%-5.20% due 5/21-6/8/2007
91,100
90,335
General Electric Capital Corp. 5.22% due 4/19/2007
50,000
49,872
Edison Asset Securitizaton LLC 5.23% due 4/3/20071 
23,600
23,590
NetJets Inc. 5.19%-5.22% due 4/11-5/1/20071
70,682
70,452
Clipper Receivables Co., LLC 5.23%-5.24% due 4/13-4/26/20071 
66,100
65,944
Abbott Laboratories 5.21% due 5/1/20071
52,000
51,767
Anheuser-Busch Cos. Inc. 5.18%-5.20% due 4/18-5/21/20071
41,515
41,366
Wm. Wrigley Jr. Co. 5.20% due 4/20-5/15/20071
35,000
34,863
Caterpillar Financial Services Corp. 5.23% due 6/7/2007
30,400
30,095
Freddie Mac 5.16% due 5/31/2007
26,900
26,661
Hershey Co. 5.19% due 5/2/20071
20,000
19,908
Fannie Mae 5.155% due 5/2/2007
16,150
16,076
Harvard University 5.18% due 4/11/2007
15,000
14,976
Merck & Co. Inc. 5.20% due 4/27/2007
12,400
12,351
Becton, Dickinson and Co. 5.20% due 4/5/2007
12,000
11,992
McCormick & Co., Inc. 5.19% due 5/14/20071
5,000
4,968
     
     
Total short-term securities (cost: $1,940,190,000)
  
1,940,321
     
Total investment securities (cost: $30,630,561,000)
  
41,685,570
Other assets less liabilities
  
47,709
     
Net assets
  
$41,733,279


“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.


1Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $1,494,626,000, which represented 3.58% of the net assets of the fund.
2Security did not produce income during the last 12 months.
3The fund owns 5% or more of the outstanding voting shares of this company. See table below for additional information.

ADR = American Depositary Receipts
GDR = Global Depositary Receipts


Investments in affiliates
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or more of the outstanding voting shares of that company. Further details on these holdings and related transactions during the three months ended March 31, 2007, appear below.
           
Market value
         
Dividend
of affiliates
         
income
at 3/31/07
Company
Beginning shares
Purchases
Sales
Ending shares
(000)
(000)
             
Comverse Technology, Inc.2
—
13,130,000
—
13,130,000
$—
$280,326




Federal income tax information
(dollars in thousands)
 
$11,385,817
Gross unrealized appreciation on investment securities
(339,537)
Gross unrealized depreciation on investment securities
11,046,280
Net unrealized appreciation on investment securities
30,639,290
Cost of investment securities for federal income tax purposes
  



Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.
 
MFGEFP-910-0507-S6887

ITEM 2 - Controls and Procedures

The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.

There were no changes in the Registrant’s internal control 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 control over financial reporting.


ITEM 3 - Exhibits

The certifications required by Rule 30a-2 of the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits 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.

 
FUNDAMENTAL INVESTORS, INC.
   
 
By /s/ Paul G. Haaga, Jr.
 
Paul G. Haaga, Jr., Executive Vice President and
Principal Executive Officer
   
 
Date: May 29, 2007



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 /s/ Paul G. Haaga, Jr.
Paul G. Haaga, Jr., Executive Vice President and
Principal Executive Officer
 
Date: May 29, 2007



By /s/ Jeffrey P. Regal
Jeffrey P. Regal, Treasurer and
Principal Financial Officer
 
Date: May 29, 2007