N-Q 1 nq0106.txt TILSON INVESTMENT TRUST 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 811-21606 --------- Tilson Investment Trust ----------------------- (Exact name of registrant as specified in charter) 145 East 57th Street, Suite 1100, New York, New York 10022 ---------------------------------------------------------- (Address of principal executive offices) (Zip code) Julian G. Winters 116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 252-972-9922 ------------ Date of fiscal year end: October 31 ---------- Date of reporting period: January 31, 2006 ---------------- ITEM 1. SCHEDULE OF INVESTMENTS TILSON FOCUS FUND Schedule of Investments (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ Market Value Market Value Shares (Note 1) Shares (Note 1) ------------------------------------------------------------------ --------------------------------------------------------------- COMMON STOCKS - 70.59% Software - 7.04% Microsoft Corporation 20,000 $ 563,000 Auto Parts & Equipment - 6.97% ------------ Lear Corporation 22,000 $ 557,700 ------------ Telecommunications - 0.32% * Intrado, Inc. 1,000 25,440 Beverages - 1.50% ------------ Anheuser-Busch Companies 2,900 120,176 ------------ Total Common Stocks (Cost $5,452,716) 5,647,620 ------------ Coal - 1.89% * International Coal Group, Inc. 15,000 151,800 CALL OPTIONS PURCHASED - 14.53% ------------ * Anheuser-Busch Co. Inc., 01/20/2007 Diversified Financial Services - 1.65% Strike $45.00 4,000 6,400 American Express Company 2,000 104,900 * Anheuser-Busch Co. Inc., 01/20/2007 Freddie Mac 400 27,144 Strike $50.00 7,000 3,850 ------------ * Anheuser-Busch Co. Inc., 01/19/2008 132,044 Strike $35.00 12,500 108,750 ------------ * Costco Wholesale Corp., 01/20/2007 Holding Company - Diversified - 4.73% Strike $35.00 6,000 97,200 Resource America, Inc. 21,000 378,210 * Foot Locker, Inc., 01/19/2008 ------------ Strike $20.00 1,500 8,250 * Freddie Mac, 01/20/2007 Home Furnishings - 1.26% Strike $65.00 3,000 24,000 Whirlpool Corporation 1,250 100,850 * Laboratory Corp., 01/20/2007 ------------ Strike $40.00 1,000 20,300 * Lear Corporation, 01/20/2007 Insurance - 7.88% Strike $20.00 10,000 99,000 * Berkshire Hathaway Inc. 215 630,380 * Lear Corporation, 01/20/2007 ------------ Strike $25.00 1,000 7,300 * McDonald's Corp., 03/21/2006 Metals - Diversified - 0.36% Strike $30.00 27,500 143,000 * Universal Stainless Alloy * McDonald's Corp., 01/20/2007 Products, Inc. 1,500 28,665 Strike $25.00 3,000 33,600 ------------ * McDonald's Corp., 01/20/2007 Strike $30.00 4,000 29,200 Oil & Gas - 1.00% * Microsoft Corp., 01/19/2008 Crosstex Energy, Inc. 1,000 80,220 Strike $25.00 40,000 228,000 ------------ * Wal-Mart Stores Inc., 01/20/2007 Strike $45.00 16,700 81,830 Pharmaceuticals - 0.45% * Wal-Mart Stores Inc., 01/20/2007 Pfizer, Inc. 1,400 35,952 Strike $50.00 7,000 17,500 ------------ * Wendy's International Inc., 01/20/2007 Strike $35.00 7,000 172,900 Real Estate Investment Trust - 0.09% * Wendy's International Inc., 01/20/2007 * Winthrop Realty Trust, Inc. 1,300 7,280 Strike $40.00 3,800 76,760 ------------ Retail - 35.45% CKE Restaurants, Inc. 19,000 297,350 Costco Wholesale Corp. 6,400 319,296 Foot Locker Inc. 11,500 261,280 McDonald's Corporation 27,800 973,278 * Sears Holdings Corporation 2,900 352,176 Wal-Mart Stores, Inc. 11,800 544,098 Wendy's International, Inc. 1,500 88,425 ------------ 2,835,903 ------------ (Continued)
TILSON FOCUS FUND Schedule of Investments (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ Market Value Shares (Note 1) ------------------------------------------------------------------ --------------------------------------------------------------- CALL OPTIONS PURCHASED - CONTINUED Note 1 - Investment Valuation * Whirlpool Corporation, 01/20/2007 The Fund's investments in securities are carried at value. Strike $60.00 200 $ 4,640 Securities listed on an exchange or quoted on a national ------------ market system are valued at the last sales price as of 4:00 p.m. Eastern Time. Securities traded in the NASDAQ Total Call Options Purchased over-the-counter market are generally valued at the NASDAQ (Cost $998,100) 1,162,480 Official Closing Price. Other securities, including options ------------ purchased, traded in the over-the-counter market and listed securities for which no sale was reported on that date are INVESTMENT COMPANIES - 9.68% valued at the most recent bid price. Securities and assets for which representative market quotations are not readily Evergreen Institutional available (e.g., if the exchange on which the portfolio Money Market Fund 387,312 387,312 security is principally traded closes early or if the trading Merrimac Cash Series of the particular portfolio security is halted during the day Nottingham Shares 387,312 387,312 and does not resume prior to the Fund's net asset value ------------ calculation) or which cannot be accurately valued using the Fund's normal pricing procedures are valued at fair value as Total Investment Companies determined in good faith under policies approved by the (Cost $774,624) 774,624 Trustees. A portfolio security's "fair value" price may ------------ differ from the price next available for that portfolio security using the Fund's normal pricing procedures. Total Investments (Cost $7,225,440) - 94.80% $ 7,584,724 Investment companies are valued at net asset value. Other Assets less Liabilities - 5.20% 415,930 Instruments with maturities of 60 days or less are valued at ------------ amortized cost, which approximates market value. Net Assets - 100.00% $ 8,000,654 ------------ Summary of Investments by Industry % of Net * Non-income producing investment. Industry Assets Value --------------------------------------------------------------- Aggregate cost for financial reporting and federal income tax Auto Parts & Equipment 8.30% $ 664,000 purposes is the same. Unrealized appreciation/(depreciation) of Beverages 2.99% 239,176 investments for federal income tax purposes is as follows: Coal 1.89% 151,800 Diversified Financial Services 1.95% 156,044 Holding Company - Diversified 4.73% 378,210 Aggregate gross unrealized appreciation $ 627,410 Home Furnishings 1.32% 105,490 Aggregate gross unrealized depreciation (268,126) Insurance 7.88% 630,380 ------------ Investment Companies 9.68% 774,624 Net unrealized appreciation $ 359,284 Medical 0.25% 20,300 ============ Metals - Diversified 0.36% 28,665 Oil & Gas 1.00% 80,220 Pharmaceuticals 0.45% 35,952 Real Estate Investment Trust 0.09% 7,280 Retail 43.70% 3,496,143 Software 9.89% 791,000 Telecommunications 0.32% 25,440 --------------------------------------------------------------- Total 94.80% $ 7,584,724
Tilson Dividend Fund Schedule of Investments (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ Market Value Market Value Shares (Note 1) Shares (Note 1) ------------------------------------------------------------------ --------------------------------------------------------------- COMMON STOCKS - 76.12% Telecommunications - 7.21% Atlantic Tele-Network, Inc. 3,100 $ 120,900 Auto Parts & Equipment - 5.11% * Netgear, Inc. + 12,000 217,440 ------------ Bandag, Incorporated 3,800 $ 145,920 338,340 ------------ MileMarker International, Inc. 26,000 93,600 ------------ 239,520 Total Common Stocks (Cost $3,139,448) 3,569,726 ------------ ------------ Electronics - 2.46% Mesa Laboratories, Inc. 7,200 115,128 LIMITED PURPOSE TRUST - 5.17% ------------ a Sleep Country Canada Income Fund (note 2) Food - 7.70% (Cost $187,892) 12,600 242,465 u Industrias Bachoco S.A. 8,600 146,200 ------------ u Tesco plc 12,500 215,000 ------------ 361,200 INVESTMENT COMPANIES - 9.40% ------------ Healthcare - Services - 4.13% Evergreen Institutional Money Market * Laboratory Corporation of America Fund 220,438 220,438 Holdings + 3,300 193,545 Merrimac Cash Series Nottingham ------------ Shares 220,437 220,437 ------------ Internet - 5.05% * Netflix Inc. + 8,600 236,930 ------------ Total Investment Companies (Cost $440,875) 440,875 Mining - 9.23% ------------ u Aber Diamond Corporation 3,700 154,845 Newmont Mining Corporation + 4,500 278,100 Total Investments (Cost $3,768,215) - 90.69% $ 4,253,066 ------------ Other Assets less Liabilities - 9.31% 436,368 432,945 ------------ ------------ Oil & Gas - 11.09% Net Assets - 100.00% $ 4,689,434 Exxon Mobil Corporation 3,300 207,075 ============ u Precision Drilling Trust 5,000 167,650 * The Meridian Resource Aggregate cost for financial reporting and federal income tax Corporation + 29,000 145,290 purposes is the same. Unrealized appreciation/(depreciation) ------------ of investments for financial reporting and federal income tax 520,015 purposes is as follows: ------------ Pharmaceuticals - 2.56% *u QLT Inc. + 19,900 119,798 Aggregate gross unrealized appreciation $ 518,683 ------------ Aggregate gross unrealized depreciation (33,832) ------------ Retail - 9.84% Net unrealized appreciation $ 484,851 Ark Restaurants Corp. 5,600 151,256 ============ Barnes & Noble, Inc. + 3,200 135,744 Costco Wholesale Corporation + 3,500 174,615 ------------ * Non-income producing investment. 461,615 u ADR's. ------------ a Canadian. Semiconductors - 2.34% + Portion of the security is pledged as collateral for call * Cree, Inc. + 4,200 109,746 options written. ------------ Software - 9.40% * Intuit Inc. + 3,800 198,854 Microsoft Corporation 8,600 242,090 ------------ 440,944 ------------ (Continued)
Tilson Dividend Fund Schedule of Investments (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------ ---------------------------------------------------------------
The following acronyms and abbreviations are used in this portfolio: ADR - American Depositary Receipt. PLC - Public Limited Company. SA - Sociedad Anonima (Mexican). See Notes to Financial Statements Tilson Dividend Fund Call Options Written (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------ ---------------------------------------------------------------
Shares Subject to Market Value Call (Note 3) ----------------------------------------------------------------- Common Stocks, Expiration Date, Exercise Price * Laboratory Corporation of America Holdings, 2/18/2006 Strike $50.00 600 $ 4,920 * Cree, Inc., 3/18/2006 Strike $25.00 4,200 8,610 * Netflix Inc., 3/18/2006 Strike $25.00 1,800 6,120 Strike $27.50 1,500 2,850 Strike $30.00 5,300 4,505 * Newmont Mining Corporation, 3/18/2006 Strike $50.00 1,000 12,600 * Costco Wholesale Corporation, 4/22/2006 Strike $50.00 900 1,890 * The Meridian Resource Corporation, 4/22/2006 Strike $5.00 23,500 11,750 * Netgear, Inc., 6/17/2006 Strike $20.00 3,000 4,500 Strike $22.50 5,000 3,250 * Newmont Mining Corporation, 6/17/2006 Strike $50.00 1,000 14,000 Strike $60.00 2,500 17,500 * QLT Inc., 6/17/2006 Strike $7.50 19,900 8,955 * Barnes & Noble, Inc., 7/22/2006 Strike $45.00 1,600 3,520 * Costco Wholesale Corporation, 7/22/2006 Strike $5.20 800 1,600 * Intuit Inc., 7/22/2006 Strike $55.00 1,000 2,850 * The Meridian Resource Corporation, 7/22/2006 Strike $5.00 5,500 4,125 * Netgear, Inc., 9/16/2006 Strike $20.00 4,000 8,400 ------------ Total (Premiums Received $104,531) $ 121,945 ============ * Non-income producing investment. See Notes to Financial Statements Tilson Dividend Fund Notes to Financial Statements (Unaudited) As of January 31, 2006 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------ --------------------------------------------------------------- Note 1 - Investment Valuation Note 3 - Option Writing The Fund's investments in securities are carried at value. When the Fund writes an option, an amount equal to the Securities listed on an exchange or quoted on a national market premium received by the Fund is recorded as a liability and system are valued at the last sales price as of 4:00 p.m. Eastern is subsequently adjusted to the current fair value of the Time. Securities traded in the NASDAQ over-the-counter market are option written. Premiums received from writing options that generally valued at the NASDAQ Official Closing Price. Other expire unexercised are treated by the Fund on the expiration securities traded in the over-the-counter market and listed date as realized gains from investments. The difference securities for which no sale was reported on that date are valued between the premium and the amount paid on effecting a at the most recent bid price. Securities and assets for which closing purchase transaction, include brokerage commissions, representative market quotations are not readily available (e.g., is also treated as a realized gain or loss (depending on if if the exchange on which the portfolio security is principally the premium is less than the amount paid for the closing traded closes early or if trading of the particular portfolio purchase transaction). If a call option is exercised, the security is halted during the day and does not resume prior to premium is added to the proceeds from the sale of the the Fund's net asset value calculation) or which cannot be underlying security or currency in determining whether the accurately valued using the Fund's normal pricing procedures are Fund has realized a gain or loss. If a put option is valued at fair value as determined in good faith under policies exercised, the premium reduces the cost basis of the approved by the Trustees. A portfolio security's "fair value" securities purchased by the Fund. The Fund, as the writer of price may differ from the price next available for that portfolio an option, bear the market risk of an unfavorable change in security using the Fund's normal pricing procedures. Investment the price of the security underlying the written option. companies are valued at net asset value. Instruments with maturities of 60 days or less are valued at amortized cost, which Summary of Investments by Industry approximates market value. % of Net Industry Assets Value Note 2 - Foreign Currency Translation ------------------------------------------------------------- Auto Parts & Equipment 5.11% $ 239,520 Portfolio securities and other assets and liabilities denominated Electronics 2.46% 115,128 in foreign currencies are translated into U.S. dollars based on Food 7.70% 361,200 the exchange rate of such currencies against U.S. dollars on the Healthcare - Services 4.13% 193,545 date of valuation. Purchases and sales of securities and income Internet 5.05% 236,930 items denominated in foreign currencies are translated into U.S. Investment Companies 9.40% 440,875 dollars at the exchange rate in effect on the transaction date. Limited Purpose Trust 5.17% 242,465 Mining 9.23% 432,945 The Fund does not separately report the effect of changes in Oil & Gas 11.09% 520,015 foreign exchange rates from changes in market prices on Pharmaceuticals 2.56% 119,798 securities held. Such changes are included in net realized and Retail 9.84% 461,615 unrealized gain or loss from investments. Semiconductors 2.34% 109,746 Software 9.40% 440,944 Realized foreign exchange gains or losses arise from sales of Telecommunications 7.21% 338,340 foreign currencies, currency gains or losses realized between the ------------------------------------------------------------- trade and settlement dates on securities transactions and the Total 90.69% $ 4,253,066 difference between the recorded amounts of dividends, interest, and foreign withholding taxes, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
ITEM 2. CONTROLS AND PROCEDURES (a) The Principal Executive Officer and the Principal Financial Officer have concluded that the registrant's disclosure controls and procedures are effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 as of a date within 90 days of the filing of this report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 3. EXHIBITS Certifications required pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 are filed herewith as Exhibit A. 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. Tilson Investment Trust By: (Signature and Title) /s/ Whitney R. Tilson _____________________________________ Whitney R. Tilson Trustee, President, and Principal Executive Officer Date: March 17, 2006 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/ Whitney R. Tilson _____________________________________ Whitney R. Tilson Trustee, President, and Principal Executive Officer Tilson Investment Trust Date: March 17, 2006 By: (Signature and Title) /s/ Glenn H. Tongue _____________________________________ Glenn H. Tongue Vice President, Treasurer, and Principal Financial Officer Tilson Investment Trust Date: March 20, 2006