N-Q 1 dnq.htm LEGG MASON SPECIAL INVESTMENT TRUST, INC. Legg Mason Special Investment Trust, 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:   811-04451

 

 

Legg Mason Special Investment Trust, Inc.

Name of Fund:

 

100 Light Street

Baltimore, MD 21202

Fund Address:

 

 

Richard M. Wachterman, Esq.

Legg Mason & Co., LLC

100 Light Street

Baltimore, MD 21202

Name and address of agent for service:

 

Registrant’s telephone number, including area code: (410) 539-0000

 

Date of fiscal year end: 3/31/2008

 

Date of reporting period: 12/31/2007

 

 

 

Item 1 – Schedule of Investments

 

Page 2 of 4

10   Quarterly Report to Shareholders

 

Portfolio of Investments

Legg Mason Special Investment Trust, Inc.

December 31, 2007 (Unaudited)

(Amounts in Thousands)

 

     Shares    Value  

Common Stocks and Equity Interests 98.9%

      

Consumer Discretionary — 14.1%

      

Household Durables — 2.2%

      

Lennar Corp.

    3,700    $ 66,193  
           

Internet and Catalog Retail — 5.9%

      

Amazon.com Inc.

    800      74,112 A

Expedia Inc.

    3,150      99,603 A
           
        173,715  
           

Multiline Retail — 1.9%

      

Sears Holdings Corp.

    535      54,604 A
           

Specialty Retail — 4.1%

      

Collective Brands Inc.

    3,600      62,604 A,B

Urban Outfitters Inc.

    2,150      58,609 A
           
        121,213  
           

Financials — 14.7%

      

Insurance — 8.8%

      

Ambac Financial Group Inc.

    4,000      103,080  

Montpelier Re Holdings Ltd.

    3,800      64,638  

Security Capital Assurance Ltd.

    6,200      24,118 B

XL Capital Ltd.

    1,300      65,403  
           
        257,239  
           

Real Estate Investment Trusts (REITs) — 4.1%

      

Chimera Investment Corp.

    2,400      42,912 B

Hatteras Financial Corp.

    2,508      50,152 A,C

Thornburg Mortgage Inc.

    3,100      28,644  
           
        121,708  
           

Thrifts and Mortgage Finance — 1.8%

      

Downey Financial Corp.

    1,700      52,887 B
           

 

Quarterly Report to Shareholders    11

 

     Shares    Value  

Health Care — 12.8%

      

Biotechnology — 4.2%

      

Alkermes Inc.

    4,500    $ 70,155 A

Cell Genesys Inc.

    4,500      10,350 A,B

Medarex Inc.

    4,300      44,806 A
           
        125,311  
           

Health Care Providers and Services — 3.9%

      

WellPoint Inc.

    1,300      114,049 A
           

Life Sciences Tools and Services — 2.3%

      

Affymetrix Inc.

    2,928      67,742 A
           

Pharmaceuticals — 2.4%

      

Medicis Pharmaceutical Corp.

    2,700      70,119  
           

Industrials — 13.1%

      

Commercial Services and Supplies — 2.4%

      

Corporate Executive Board Co.

    1,200      72,120  
           

Construction and Engineering — 2.0%

      

Quanta Services Inc.

    2,200      57,728 A
           

Electrical Equipment — 8.7%

      

Energy Conversion Devices Inc.

    2,700      90,855 A,B

Evergreen Solar Inc.

    5,700      98,439 A,B

SunPower Corp.

    500      65,195 A
           
        254,489  
           

Information Technology — 32.7%

      

Computers and Peripherals — 3.3%

Lenovo Group Ltd.

    108,367      97,285  
           

 

12   Quarterly Report to Shareholders

 

Portfolio of Investments — Continued

Legg Mason Special Investment Trust, Inc. — Continued

 

     Shares    Value  

Information Technology — Continued

      

Electronic Equipment and Instruments — 2.9%

      

Jabil Circuit Inc.

    5,500    $ 83,985  
           

Internet Software and Services — 3.3%

      

CNET Networks Inc.

    10,500      95,970 A,B
           

IT Services — 6.1%

      

Accenture Ltd.

    2,500      90,075  

DST Systems Inc.

    1,100      90,805 A
           
        180,880  
           

Semiconductors and Semiconductor Equipment — 5.2%

      

Analog Devices Inc.

    2,800      88,760  

National Semiconductor Corp.

    2,800      63,392  
           
        152,152  
           

Software — 11.9%

      

Amdocs Ltd.

    1,600      55,152 A

Electronic Arts Inc. (EA)

    1,400      81,774 A

Red Hat Inc.

    4,500      93,780 A

Take-Two Interactive Software Inc.

    6,500      119,925 A,B
           
        350,631  
           

Materials — 4.4%

      

Chemicals — 2.8%

      

Nalco Holding Co.

    3,400      82,212  
           

Metals and Mining — 1.6%

      

United States Steel Corp.

    400      48,364  
           

Telecommunication Services — 7.1%

      

Diversified Telecommunication Services — 3.4%

      

Level 3 Communications Inc.

    33,000      100,320 A
           

Quarterly Report to Shareholders    13

 

     Shares    Value  

Wireless Telecommunication Services — 3.7%

      

NII Holdings Inc.

    1,275    $ 61,608 A

Sprint Nextel Corp.

    3,500      45,955  
           
        107,563  
           

Total Common Stocks and Equity Interests

      

(Cost — $2,541,830)

         2,908,479  
           

Preferred Stocks — 1.4%

      

Thornburg Mortgage Inc.

    1,741      41,777  
           

Total Preferred Stocks (Cost — $42,486)

         41,777  
           

Total Investments — 100.3% (Cost — $2,584,316)D

         2,950,256  

Other Assets Less Liabilities — (0.3)%

         (7,498 )
           

Net Assets — 100.0%

       $ 2,942,758  
           

Net Asset Value Per Share:

      

Primary Class

       $ 32.58  
           

Class R

       $ 41.05  
           

Financial Intermediary Class

       $ 41.17  
           

Institutional Class

       $ 41.71  
           

 

A

Non-income producing.

B

As defined in the Investment Company Act of 1940, an “Affiliated Company” represents Fund ownership of at least 5% of the outstanding voting securities of an issuer. At December 31, 2007, the total market value of Affiliated Companies was $598,060, and the cost was $631,442.

C

Rule 144a Security — A security purchased pursuant to Rule 144a under the Securities Act of 1933, which may not be resold subject to that rule except to qualified institutional buyers. These securities, which the Fund’s investment adviser has determined to be liquid, represent 1.70% of net assets.

D

Aggregate cost for federal income tax purposes is substantially the same as book cost. At December 31, 2007, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes was substantially as follows:

 

Gross unrealized appreciation

    $ 723,035  

Gross unrealized depreciation

      (357,095 )
        

Net unrealized appreciation

    $ 365,940  
        

Transactions in Affiliated Companies:

An “Affiliated Company,” as defined in the 1940 Act, is a company in which a fund owns 5% or more of the company’s outstanding voting securities at any time during the period. The following transactions were effected in shares of such companies for the year ended December 31, 2007:

 

     

Affiliate

Value at

    Purchased    Sold    Dividend    Shares at    Value at    Realized  
     12/31/07    Cost    Shares    Cost    Shares    Income    12/31/07    12/31/07    Gain/(Loss)  

Cell Genesys Inc.

    $ 14,700    $ 4,290    1,000    $ —      —      $ —      4,500    $ 10,350    $ —    

Chimera Investment Corp.A

      —        35,875    2,400      0    —        60    2,400      42,912      —    

CNET Networks Inc.

      101,472      0    —        12,446    1,150      —      10,500      95,970      (3,610 )

Collective Brands Inc.A

      —        73,480    3,600      —      —        —      3,600      62,604      —    

Downey Financial Corp.A

      —        63,197    1,700      —      —        —      1,700      52,887      —    

Energy Conversion Devices Inc.A

      —        86,138    2,700      —      —        —      2,700      90,855      —    

Evergreen Solar Inc.A

      —        36,466    3,800      —      —        —      5,700      98,439      —    

Medicis Pharmaceutical CorporationB

      151,018      —      —        68,512    2,200      330    —        —        (5,054 )

Meritage Homes CorporationB

      61,028      —      —        106,300    1,900      —      —        —        (72,571 )

Security Capital Assurance Ltd.A

      —        83,253    4,400      —      —        253    6,200      24,118      —    

Take-Two Interactive Software Inc.

      90,630      43,136    2,800      15,903    800      —      6,500      119,925      (1,942 )

Thornburg Mortgage Inc. - PreferredA

      —        42,486    1,741      —      —        —      1,741      41,777      —    

UAP Holdings Corp.B

      69,795      —      —        55,190    2,700      1,737    —        —        46,770  
                                                    
   $ 488,643    $ 468,321       $ 258,351       $ 2,380       $ 639,837    $ (36,407 )
                                                    

 

A

This security did not have affiliated status at March 31, 2007 because the Fund owned less than 5% of the company’s voting shares. Shared purchased during the period ended December 31, 2007 have resulted in its recognition as an affiliated company.

B

This security is no longer an affiliated company.

Security Valuation

Equity securities traded on national securities exchanges are valued at the last quoted sales price, except securities traded on the Nasdaq Stock Market, Inc. (“NASDAQ”) which are valued in accordance with the NASDAQ Official Closing Price. Over the counter securities are valued at the mean between the latest bid and asked prices as furnished by dealers who make markets in such securities or by an independent pricing service. Fixed income securities for which market quotations are readily available are valued at current market value.

The Fund’s securities are valued on the basis of readily available market quotations or, lacking such quotations, at fair value as determined under policies approved by and under the general oversight of the Board of Directors. In determining fair value, all relevant qualitative and quantitative factors known to the Fund are considered. These factors are subject to change over time and are reviewed periodically. The Fund may use fair value pricing instead of market quotations to value one or more securities if the Fund believes that, because of special circumstances, doing so would more accurately reflect the prices the Fund would expect to realize on the current sale of those securities. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from quoted or published values or from the values that would have been used had a ready market for the investments existed, and the differences could be material. All fair valued securities are identified in the portfolio of investments.

Other information regarding the Fund is available in the Fund’s 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) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-Q is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

 

  (b) There were no changes in the Registrant’s internal control over financial reporting during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

Item 3 – Exhibits

Certifications as required by Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto.

 

Page 3 of 4

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.

 

Legg Mason Special Investment Trust, Inc.
By:  

/s/ Mark R. Fetting

  Mark R. Fetting
  President, Legg Mason Special Investment Trust, Inc.
Date:  

February 22, 2008

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/ Mark R. Fetting

  Mark R. Fetting
  President, Legg Mason Special Investment Trust, Inc.

Date:

  

February 22, 2008

By:  

/s/ Marie K. Karpinski

  Marie K. Karpinski
  Vice President and Chief Financial Officer, Legg Mason Special Investment Trust, Inc.
Date:  

February 21, 2008

 

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