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, 2010

Date of reporting period: September 30, 2010

 
 
 

ITEM 1.   SCHEDULE OF INVESTMENTS

Eagle Capital Growth Fund, Inc.
Portfolio of Investments (as of September 30, 2010) (unaudited)

Common Stock (98.6% of total investments)
                        
Industry
                        
Consumer
  
Shares
    
Cost
    
Market Value
    
% Total Inv.
  
Colgate-Palmolive Co.
     12,000       417,940       922,320        
PepsiCo Inc.
     10,000       168,296       664,400        
Procter & Gamble Co.
     7,000       420,996       419,790        
                    $ 2,006,510       (9.0 %)
Data Processing
                                
Automatic Data Processing, Inc.
     34,000       1,278,025       1,429,020          
Paychex Inc.
     34,000       907,967       934,660          
Total Systems Services, Inc.
     13,065       177,851       199,111          
                    $ 2,562,791       (11.4 %)
Drug/Medical Device
                                
Abbott Laboratories Inc.
     20,000       1,034,350       1,044,800          
Baxter International
     8,000       402,596       381,680          
Johnson & Johnson
     15,000       614,274       929,400          
Pfizer Inc.
     38,737       522,042       665,114          
Medtronic, Inc.
     34,000       1,417,397       1,141,720          
Stryker Corp.
     22,000       180,012       1,101,100          
                    $ 5,263,814       (23.5 %)
Industrial
                                
General Electric Co.
     35,000       401,458       568,750          
Graco Inc.
     13,750       349,686       436,288          
Manitowoc Company Inc.
     75,000       462,150       908,250          
Sigma Aldrich Corp.
     16,000       498,184       966,080          
Waters Corp.*
     6,000       302,341       424,680          
                    $ 3,304,048       (14.8 %)
Mutual Fund Managers
                                
Eaton Vance Corp.
     22,000       483,869       638,880          
Federated Investors, Inc.
     40,000       909,365       910,400          
Franklin Resources, Inc.
     8,000       743,747       855,200          
T. Rowe Price
     12,500       562,209       625,813          
                    $ 3,030,293       (13.5 %)
Insurance
                                
AFLAC Inc.
     16,500       79,484       853,215          
The Chubb Corporation
     16,000       819,772       911,840          
                    $ 1,765,055       (7.9 %)
Retail/Distribution
                                
The Home Depot, Inc.
     29,500       815,741       934,560          
Lowe's Companies Inc.
     35,000       708,771       780,150          
Sysco Corp.
     27,000       309,199       770,040          
Hillenbrand, Inc.
     22,000       446,356       473,220          
                    $ 2,957,970       (13.2 %)
Closed-End Funds
                                
Claymore Dividend Income Fund
     83,000       1,133,654       1,177,770          
                    $ 1,177,770       (5.3 %)
                                 
Total common stock investments
                   $ 22,068,251          
                                 
Cash and cash equivalents (1.4% of total investments)
                     322,066          
                                 
Total investments
                   $ 22,390,317          
                                 
All other assets less liabilities
                     32,831          
                                 
Total net assets
                   $ 22,423,148          
                                 
*Non-dividend paying security
                                

 
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Footnote:

The following information is based upon federal income tax cost of portfolio investments as of September 30, 2010:

Gross unrealized appreciation
   $ 5,888,396  
Gross unrealized depreciation
     (387,876 )
Net unrealized appreciation
   $ 5,500,520  
         
Federal income tax basis
   $ 16,567,731  

ITEM 2.  VALUATION HIERARCHY

Valuation Hierarchy

The standard 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 or 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.

All of the Fund’s common stock investments of $22,068,251 and cash equivalents of $322,066 are classified within the Level 1 of the valuation hierarchy as quoted prices are available in an active market.

 
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ITEM 3. CONTROLS AND PROCEDURES.

(i)  As of October 1, 2010, 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.

 
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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.

 
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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 13, 2010

 
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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 15, 2010

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

Dated: October 13, 2010
 
 
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