N-Q 1 file1.htm FORM N-Q

 
 

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: 811-07683

 

Morgan Stanley Special Value Fund

(Exact name of registrant as specified in charter)

 

522 Fifth Avenue, New York, New York
(Address of principal executive offices)

 

10036
(Zip code)

 

Ronald E. Robison

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 212-296-6990

Date of fiscal year end: July 31, 2008

Date of reporting period: October 31, 2007

 
 

 

 


Item 1. Schedule of Investments.

The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

   

Morgan Stanley Special Value Fund

Portfolio of Investments October 31, 2007 (unaudited)

 

NUMBER OF
SHARES

 

 

 

 

 

VALUE

 

 

 

COMMON STOCKS (94.9%)

 

 

 

 

 

 

 

Aerospace & Defense (5.6%)

 

 

 

 

 

241,780

 

AAR Corp. *

 

 

$

7,749,049

 

307,800

 

DRS Technologies, Inc.

 

 

 

17,680,032

 

166,000

 

Moog Inc. (Class A) *

 

 

 

7,660,900

 

 

 

 

 

 

 

33,089,981

 

 

 

Agricultural Commodities/Milling (1.5%)

 

 

 

 

 

215,200

 

Corn Products International, Inc.

 

 

 

9,154,608

 
               

 

 

Air Freight/Couriers (1.5%)

 

 

 

 

 

128,700

 

Forward Air Corp.

 

 

 

4,199,481

 

320,300

 

Pacer International, Inc.

 

 

 

4,721,222

 

 

 

 

 

 

 

8,920,703

 

 

 

Apparel/Footwear (0.9%)

 

 

 

 

 

361,135

 

Maidenform Brands, Inc. *

 

 

 

5,362,855

 
               

 

 

Apparel/Footwear Retail (2.3%)

 

 

 

 

 

338,750

 

Stage Stores, Inc.

 

 

 

6,354,950

 

237,100

 

Tween Brands Inc. *

 

 

 

7,278,970

 

 

 

 

 

 

 

13,633,920

 

 

 

Broadcasting (1.4%)

 

 

 

 

 

159,500

 

Lin TV Corp. (Class A) *

 

 

 

2,323,915

 

489,800

 

Sinclair Broadcast Group, Inc. (Class A)

 

 

 

5,897,192

 

 

 

 

 

 

 

8,221,107

 

 

 

Chemicals: Major Diversified (1.4%)

 

 

 

 

 

427,213

 

Hercules Inc.

 

 

 

8,035,877

 
               

 

 

Chemicals: Specialty (1.8%)

 

 

 

 

 

128,200

 

Cytec Industries Inc.

 

 

 

8,552,222

 

149,100

 

Zep Inc.

 

 

 

2,385,600

 

 

 

 

 

 

 

10,937,822

 

 

 

Commercial Printing/Forms (4.3%)

 

 

 

 

 

554,300

 

Cenveo Inc. *

 

 

 

12,516,094

 

202,300

 

Consolidated Graphics, Inc. *

 

 

 

12,943,154

 

 

 

 

 

 

 

25,459,248

 

 

 

Computer Peripherals (2.0%)

 

 

 

 

 

506,300

 

Electronics for Imaging, Inc. *

 

 

 

11,543,640

 
               

 

 

Construction Materials (0.5%)

 

 

 

 

 

336,800

 

Dayton Superior Corp. *

 

 

 

2,711,240

 
               

 

 

Consumer Sundries (0.3%)

 

 

 

 

 

225,400

 

Central Garden & Pet Co. *

 

 

 

1,868,566

 
               

 

 

Containers/Packaging (2.6%)

 

 

 

 

 

338,342

 

Rock-Tenn Co. (Class A)

 

 

 

9,866,053

 

106,500

 

Silgan Holdings Inc.

 

 

 

5,811,705

 

 

 

 

 

 

 

15,677,758

 

 

 

Electric Utilities (1.8%)

 

 

 

 

 

289,000

 

Avista Corp.

 

 

 

6,372,450

 

169,250

 

PNM Resources Inc.

 

 

 

4,232,942

 

 

 

 

 

 

 

10,605,392

 

 

 

Electrical Products (4.2%)

 

 

 

 

 

180,600

 

Acuity Brands, Inc.

 

 

 

8,632,680

 

279,007

 

Belden Inc.

 

 

 

16,257,738

 

 

 

 

 

 

 

24,890,418

 

 

 

Electronic Production Equipment (0.9%)

 

 

 

 

 

312,400

 

Cognex Corp.

 

 

 

5,616,952

 

 

 

 


 

 

 

Engineering & Construction (2.2%)

  

 

 

 

 

131,800

 

Aecom Technology Corp. *

  

 

 

4,450,886

 

218,000

 

Stantec Inc. (Canada) *

  

 

 

8,488,920

 

 

 

 

  

 

 

12,939,806

 

 

 

Finance/Rental/Leasing (3.0%)

  

 

 

 

 

247,500

 

AerCap Holdings NV (Netherlands) *

  

 

 

6,239,475

 

176,400

 

Dollar Thrifty Automotive Group, Inc. *

  

 

 

6,085,800

 

237,623

 

TAL International Group, Inc.

 

 

 

5,610,279

 

 

 

 

  

 

 

17,935,554

 

 

 

Financial Conglomerates (2.6%)

  

 

 

 

 

634,000

 

Conseco, Inc. *

  

 

 

10,010,860

 

102,300

 

National Financial Partners Corp.

  

 

 

5,592,741

 

 

 

 

  

 

 

15,603,601

 

 

 

Gas Distributors (0.7%)

  

 

 

 

 

158,000

 

UGI Corp.

  

 

 

4,205,960

 
               

 

 

Industrial Machinery (2.3%)

  

 

 

 

 

103,300

 

Actuant Corp. (Class A)

  

 

 

7,125,634

 

125,765

 

CIRCOR International, Inc.

  

 

 

6,317,176

 

 

 

 

  

 

 

13,442,810

 

 

 

Information Technology Services (1.3%)

  

 

 

 

 

297,739

 

MTC Technologies, Inc. *

  

 

 

5,445,646

 

190,400

 

Ness Technologies Inc. *

  

 

 

2,227,680

 

 

 

 

  

 

 

7,673,326

 

 

 

Medical Specialties (1.6%)

  

 

 

 

 

100,540

 

Bio-Rad Laboratories, Inc. (Class A) *

  

 

 

9,710,153

 
               

 

 

Medical/Nursing Services (2.1%)

  

 

 

 

 

351,750

 

Apria Healthcare Group Inc. *

  

 

 

8,501,797

 

263,100

 

PharMerica Corp. *

  

 

 

4,196,445

 

 

 

 

  

 

 

12,698,242

 

 

 

Metal Fabrications (1.0%)

  

 

 

 

 

80,330

 

General Cable Corp. *

  

 

 

5,782,957

 
               

 

 

Miscellaneous Commercial Services (10.5%)

  

 

 

 

 

169,800

 

Brink’s Co. (The)

  

 

 

10,637,970

 

305,000

 

Gartner, Inc. *

  

 

 

6,679,500

 

163,516

 

Geo Group Inc. (The) *

  

 

 

5,172,011

 

784,900

 

IKON Office Solutions, Inc.

  

 

 

10,360,680

 

502,310

 

MAXIMUS, Inc.

  

 

 

24,070,695

 

141,300

 

Viad Corp.

  

 

 

5,007,672

 

 

 

 

  

 

 

61,928,528

 

 

 

Miscellaneous Manufacturing (0.7%)

  

 

 

 

 

117,400

 

Smith (A.O.) Corp.

  

 

 

4,389,586

 
               

 

 

Multi-Line Insurance (1.6%)

  

 

 

 

 

330,600

 

Max Capital Group Ltd. (Bermuda)

  

 

 

9,352,674

 
               

 

 

Office Equipment/Supplies (3.3%)

  

 

 

 

 

920,263

 

Acco Brands Corp. *

  

 

 

19,730,439

 
               

 

 

Oil & Gas Production (2.0%)

  

 

 

 

 

76,400

 

Denbury Resources Inc. *

  

 

 

4,324,240

 

178,980

 

St. Mary Land & Exploration Co.

  

 

 

7,581,593

 

 

 

 

  

 

 

11,905,833

 

 

 

Oilfield Services/Equipment (1.8%)

  

 

 

 

 

66,572

 

Exterran Holdings Inc. *

  

 

 

5,605,362

 

139,270

 

Superior Energy Services, Inc. *

  

 

 

5,164,132

 

 

 

 

  

 

 

10,769,494

 

 

 

Packaged Software (1.5%)

  

 

 

 

 

659,728

 

MSC. Software Corp. *

  

 

 

9,104,246

 
               

 

 

Pharmaceuticals: Generic Drugs (1.0%)

  

 

 

 

 

401,300

 

Valeant Pharmaceuticals International *

  

 

 

5,838,915

 

 

 

 


 

 

Pharmaceuticals: Other (5.2%)

 

  

 

 

 

335,820

 

Perrigo Co.

 

  

 

7,962,292

 

414,000

 

PRA International *

 

  

 

12,498,660

 

401,600

 

Sciele Pharma, Inc. *

 

  

 

10,216,704

 

 

 

 

 

  

 

30,677,656

 

 

 

Property - Casualty Insurers (3.8%)

 

  

 

 

 

250,300

 

AmTrust Financial Services, Inc.

 

  

 

3,491,685

 

302,600

 

Employers Holdings, Inc.

 

  

 

5,797,816

 

205,800

 

Platinum Underwriters Holdings, Ltd. (ADR) (Bermuda)

 

  

 

7,408,800

 

253,624

 

United America Indemnity, Ltd. (Class A) (Cayman Islands) *

 

  

 

5,592,409

 

 

 

 

 

  

 

22,290,710

 

 

 

Publishing: Books/Magazines (0.7%)

 

  

 

 

 

154,600

 

Dolan Media Co.

 

  

 

4,174,200

 
               

 

 

Real Estate Investment Trusts (1.6%)

 

  

 

 

 

398,400

 

Anthracite Capital, Inc.

 

  

 

3,314,688

 

146,100

 

LaSalle Hotel Properties

 

  

 

6,036,852

 

 

 

 

 

  

 

9,351,540

 

 

 

Regional Banks (1.1%)

 

  

 

 

 

143,872

 

Integra Bank Corp.

 

  

 

2,478,915

 

335,130

 

Provident New York Bancorp

 

  

 

4,259,502

 

 

 

 

 

  

 

6,738,417

 

 

 

Restaurants (2.5%)

 

  

 

 

 

474,100

 

AFC Enterprises, Inc. *

 

  

 

6,329,235

 

1,705,580

 

Denny’s Corp. *

 

  

 

8,220,896

 

 

 

 

 

  

 

14,550,131

 

 

 

Savings Banks (0.8%)

 

  

 

 

 

143,804

 

MB Financial, Inc.

 

  

 

4,794,425

 
               

 

 

Semiconductors (0.9%)

 

  

 

 

 

269,427

 

Cirrus Logic, Inc. *

 

  

 

1,656,976

 

140,200

 

Microsemi Corp. *

 

  

 

3,730,722

 

 

 

 

 

  

 

5,387,698

 

 

 

Specialty Insurance (1.8%)

 

  

 

 

 

97,390

 

NYMAGIC, Inc.

 

  

 

2,808,728

 

140,186

 

ProAssurance Corp. *

 

  

 

7,729,856

 

 

 

 

 

  

 

10,538,584

 

 

 

Specialty Telecommunications (1.0%)

 

  

 

 

 

362,686

 

Syniverse Holdings Inc. *

 

  

 

6,053,229

 
               

 

 

Telecommunication Equipment (1.3%)

 

  

 

 

 

561,000

 

Tekelec *

 

  

 

7,405,200

 
               

 

 

Textiles (1.2%)

 

  

 

 

 

191,700

 

Albany International Corp. (Class A)

 

  

 

7,188,750

 
               

 

 

Wireless Telecommunications (0.8%)

 

  

 

 

 

182,200

 

Cellcom Israel Ltd. (Israel)

 

  

 

4,833,766

 
               

 

 

TOTAL COMMON STOCKS

 

  

 

 

 

 

 

(Cost $415,172,332)

 

  

 

562,726,517

 

 

NUMBER OF
SHARES (000)

 

Short-Term Investment (a) (6.0%)

 

 

 

 

 

 

 

Investment Company

 

 

 

 

 

35,284

 

Morgan Stanley Institutional Liquidity Money Market

 

 

 

 

 

 

 

Portfolio - Institutional Class (Cost $35,284,408)

 

 

 

35,284,408

 

 

 

TOTAL INVESTMENTS

 

 

 

 

 

 

 

(Cost $450,456,740) (b)

 

100.9%

 

598,010,925

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS

 

(0.9)

 

(5,059,468

)

 

 

NET ASSETS

 

100.0%

 

$592,951,457

 

 

*

Non-income producing security.

(a)

The Fund invests in Morgan Stanley Institutional Liquidity Money Market Portfolio - Intitutional Class, an open-end management investment company managed by the Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class. Income distributions earned by the Fund totaled $393,308 for the period ended October 31, 2007.

(b)

The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.

 

 


Item 2. Controls and Procedures.

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

 

 

2

 


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.

Morgan Stanley Special Value Fund

 

/s/ Ronald E. Robison

 

 

 

Ronald E. Robison
Principal Executive Officer
December 20, 2007

 

 

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

 

/s/ Ronald E. Robison

 

 

 

Ronald E. Robison
Principal Executive Officer
December 20, 2007

 

 

 

 

/s/ Francis Smith

 

 

 

Francis Smith
Principal Financial Officer
December 20, 2007

 

 

 

 

 

3

 


Exhibit 3 A1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Ronald E. Robison, certify that:

1.

I have reviewed this report on Form N-Q of Morgan Stanley Special Value Fund;

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) 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)

Omitted;

 

(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 second fiscal quarter of the period covered by this report 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: December 20, 2007

 

 

 

 

 


/s/ Ronald E. Robison

 

 

 

Ronald E. Robison
Principal Executive Officer

 

 

4

 


Exhibit 3 A2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Francis Smith, certify that:

1.

I have reviewed this report on Form N-Q of Morgan Stanley Special Value Fund;

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) 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)

Omitted;

 

(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: December 20, 2007

 

 

 

 

 


/s/ Francis Smith

 

 

 

Francis Smith
Principal Financial Officer

 

 

4