formnq.htm
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: 811-05807
  
 
Eagle Capital Growth Fund, Inc.
  
 
(Exact name of registrant as specified in charter)
  
     
 
205 E. Wisconsin Ave, Suite 120, Milwaukee, WI 53202
  
 
(Address of principal executive offices) (zip code)
  
 
Luke E. Sims, President
  
 
Eagle Capital Growth Fund, Inc.
  
 
205 E. Wisconsin Ave
  
 
Suite 120
  
 
Milwaukee, WI 53202
  
 
(414) 765-1107
  
 
(Name and address of agent for service)
  
 
Registrant's telephone number, including area code:
  
 
(414) 765-1107
  

Date of fiscal year end: December 31, 2009

Date of reporting period: September 30, 2009
 
 
 
 

ITEM 1.   SCHEDULE OF INVESTMENTS

Eagle Capital Growth Fund, Inc.
Portfolio of Investments (as of September 30, 2009) (unaudited)

Industry
                        
Common Stock (87.3% of Total Investments)
                    
   
Shares
    
Cost
    
Market Value
        
Consumer
                        
Colgate-Palmolive Co.
     13,000     $ 322,390     $ 991,640        
Johnson Outdoors
     21,158       125,640       190,422        
PepsiCo Inc.
     10,000       168,296       586,600        
                    $ 1,768,662       (8.9 %)
Data Processing
                                
Automatic Data Processing, Inc.
     15,000       522,202       589,500          
Paychex Inc.
     29,000       796,569       842,450          
Total Systems Services, Inc.
     13,065       177,851       210,477          
                    $ 1,642,427       (8.3 %)
Drug/Medical Device
                                
Johnson & Johnson
     17,000       731,295       1,035,130          
Medtronic, Inc.
     17,000       850,214       625,600          
Pfizer Inc.
     21,500       220,137       355,825          
Stryker Corp.
     22,000       180,012       999,460          
Teleflex Inc.
     16,000       545,608       772,960          
Wyeth
     17,500       786,924       850,150          
Zimmer Holdings Inc.*
     1,000       81,859       53,450          
                    $ 4,692,575       (23.7 %)
Bank
                                
Citigroup Inc.*
     17,000       140,100       82,280          
Marshall & Ilsley Corp.
     5,000       167,716       40,350          
                    $ 122,630       (0.6 %)
Industrial
                                
Emerson Electric Co.
     20,000       335,278       801,600          
General Electric Co.
     35,000       677,544       574,700          
Graco Inc.
     28,750       1,061,832       801,263          
Manitowoc Company Inc.
     130,000       1,682,558       1,231,100          
Sigma Aldrich Corp.
     7,000       58,094       377,860          
Waters Corp.*
     6,000       302,341       335,160          
                    $ 4,121,683       (20.8 %)
Mutual Fund Managers
                                
Eaton Vance Corp.
     25,000       601,064       699,750          
Franklin Resources Inc.
     8,000       709,459       804,800          
T. Rowe Price
     2,000       59,476       91,400          
                    $ 1,595,950       (8.1 %)
Insurance
                                
AFLAC Inc.
     16,500       79,484       705,210          
Berkshire Hathaway Inc ("B" Share)*
     250       897,745       830,750          
                    $ 1,535,960       (7.8 %)
Retail/Distribution
                                
The Home Depot, Inc.
     26,500       1,039,592       705,960          
Lowe's Companies Inc.
     20,000       454,858       418,800          
Sysco Corp.
     27,000       309,199       670,950          
                    $ 1,795,710       (9.1 %)
                                 
Total common stock investments
                   $ 17,275,597          
                                 
Cash and cash equivalents (12.7% of total investments)
       2,507,338          
                                 
Total investments
                   $ 19,782,935          
                                 
All other assets less liabilities
                     1,085          
                                 
Total net assets
                   $ 19,784,020          
                                 
*Non-dividend paying security
                                

 
 
 

Footnote:

The following information is based upon federal income tax cost of portfolio investments as of September 30, 2009:

Gross unrealized appreciation
   $ 5,503,235  
Gross unrealized depreciation
     (2,312,974 )
Net unrealized appreciation
   $ 3,190,261  
         
Federal income tax basis
   $ 14,085,336  

ITEM 2.  VALUATION HIERARCHY

SFAS 157 establishes a three-level valuation hierarchy for disclosure of fair value measurements.  The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The three levels are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets in which the Fund can participate.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset of liability, either directly or indirectly, for substantially the full term of the financial instrument.

 
 
 

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement, and include inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
 
The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Assets

Common Stock Investments

All of the Fund’s common stock investments are classified within Level 1 of the valuation hierarchy as quoted prices are available in an active market.

The following table presents the financial instruments carried at fair value as of September 30, 2009, as identified in Item 1., Schedule of Investments and by the SFAS 157 hierarchy (as described above):

Assets measure at fair value on a recurring basis as of September 30, 2009:

   
Quoted Prices in
Active Markets
for Identical
Assets
Level 1
    
Significant
Other
Observable
Inputs
Level 2
    
Significant
Unobservable
Inputs
Level 3
    
Balance at
September 30,
2009
  
                         
Common Stock
                        
Investments
   $ 17,275,597     $ ---     $ ---     $ 17,275,597  


ITEM 3. CONTROLS AND PROCEDURES.

(i)  As of October 1, 2009, an evaluation of the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) was performed by management with the participation of the registrant's President and Chief Executive Officer (who is the principal executive officer of the registrant) and the registrant’s Chief Financial Officer (who is the principal financial officer of the registrant).  Based on that evaluation, the registrant's President and Chief Executive Officer and Chief Financial Officer concluded that the registrant's disclosure controls and procedures are effectively designed to ensure that information required to be disclosed by the registrant is recorded, processed, summarized and reported within the time periods specified by the Commission's rules and forms, and that information required to be disclosed by the registrant has been accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.

 
 
 

(ii)  There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the last 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.


ITEM 3. EXHIBITS

99.1 Certification of principal executive officer as required by Rule 30a-2(a) under the Act.

99.2 Certification of principal financial officer as required by Rule 30a-2(a) under the Act.


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.

EAGLE CAPITAL GROWTH FUND, INC.

By:
/s/  Luke E. Sims
  
 
Luke E. Sims
  
 
President and Chief Executive Officer

Dated:  October 5, 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:
/s/ Luke E. Sims
  
 
Luke E. Sims
  
 
President and Chief Executive Officer (Principal Executive Officer)

Dated: October 5, 2009

By:
/s/ David C. Sims
  
 
David C. Sims
  
 
Chief Financial Officer (Principal Financial Officer)

Date: October 5, 2009