**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC  20549**

**FORM N-Q**

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANANGEMENT INVESTMENT COMPANY

 

**Investment Company Act file number 811-02679**

**DAVIS SERIES, INC.**

(Exact name of registrant as specified in charter)

2949 East Elvira Road, Suite 101

Tucson, AZ  85706

(Address of principal executive offices)

 

Thomas D. Tays

Davis Selected Advisers, L.P.

2949 East Elvira Road, Suite 101

Tucson, AZ  85706

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 520-806-7600

**Date of fiscal year end: December 31, 2006**

 

**Date of reporting period: September 30, 2006**

 

 

**ITEM 1.  SCHEDULE OF INVESTMENTS**

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS OPPORTUNITY FUND**

 

 

 

**Shares**

 

**Security**

**Value**

 

**COMMON STOCK – (95.71%)**

 

**ADVERTISING – (1.23%)**

 

 

 

 

955,000

 

WPP Group PLC (United Kingdom)

$

11,837,188

 

**AUTOMOBILES & COMPONENTS – (2.93%)**

 

 

 

 

448,700

 

Harley-Davidson, Inc. 

 

28,155,925

 

**AUTOMOTIVE RETAIL – (1.55%)**

 

 

 

 

452,500

 

Advance Auto Parts, Inc. 

 

14,905,350

 

**BROADCASTING & CABLE TV – (3.36%)**

 

 

 

 

720,600

 

DIRECTV Group, Inc.*

 

14,181,408

 

 

712,310

 

NTL Inc. 

 

18,103,359

 

 

 

 

 

 

32,284,767

 

**CAPITAL GOODS – (3.95%)**

 

 

 

 

304,000

 

American Standard Cos, Inc. 

 

12,758,880

 

 

195,500

 

Franklin Electric Co., Inc. 

 

10,379,095

 

 

16,910

 

Tae Young Corp. (South Korea)

 

895,314

 

 

497,500

 

Tyco International Ltd. 

 

13,925,025

 

 

 

 

 

 

37,958,314

 

**CAPITAL MARKETS – (4.73%)**

 

 

 

 

1,065,500

 

E*TRADE Financial Corp.*

 

25,486,760

 

 

37,686

 

Julius Baer Holding, Ltd. AG (Switzerland)

 

3,764,230

 

 

160,600

 

Legg Mason, Inc. 

 

16,198,116

 

 

 

 

 

 

45,449,106

 

**COMMERCIAL BANKS – (3.07%)**

 

 

 

 

793,184

 

Anglo Irish Bank Corp. PLC (Ireland)

 

13,035,136

 

 

448,000

 

Commerce Bancorp, Inc. 

 

16,446,080

 

 

 

 

 

 

29,481,216

 

**COMMERCIAL SERVICES & SUPPLIES – (0.37%)**

 

 

 

 

47,500

 

D&B Corp.*

 

3,562,025

 

**COMPUTER & ELECTRONICS RETAIL – (0.09%)**

 

 

 

 

43,400

 

RadioShack Corp. 

 

837,620

 

**CONSUMER DURABLES & APPAREL – (8.62%)**

 

 

 

 

949,000

 

Blount International, Inc.*

 

9,508,980

 

 

684,600

 

Garmin Ltd. 

 

33,391,365

 

 

363,764

 

Hunter Douglas NV (Netherlands)

 

25,508,297

 

 

133,300

 

Mohawk Industries, Inc.*

 

9,924,185

 

 

158,500

 

Toll Brothers, Inc.*

 

4,450,680

 

 

 

 

 

 

82,783,507

 

**CONSUMER FINANCE – (0.45%)**

 

 

 

 

62,100

 

First Marblehead Corp. 

 

4,301,046

 

**CONSUMER SERVICES – (1.57%)**

 

 

 

 

307,000

 

Apollo Group, Inc., Class A*

 

15,104,400

 

**DEPARTMENT STORES – (1.76%)**

 

 

 

 

106,900

 

Sears Holdings Corp.*

 

16,900,356

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS OPPORTUNITY FUND – (Continued)**

 

 

 

**Shares**

 

**Security**

**Value**

 

**COMMON STOCK – (Continued)**

 

**DIVERSIFIED FINANCIAL SERVICES – (2.18%)**

 

 

 

 

216,141

 

Pargesa Holding S.A., Bearer Shares (Switzerland)

$

20,897,634

 

**ENERGY – (2.97%)**

 

 

 

 

226,500

 

Tenaris S.A., ADR (Luxembourg)

 

8,013,570

 

 

280,500

 

Transocean Inc.*

 

20,541,015

 

 

 

 

 

 

28,554,585

 

**FOOD & STAPLES RETAILING – (0.69%)**

 

 

 

 

132,900

 

Costco Wholesale Corp. 

 

6,600,479

 

**FOOD, BEVERAGE & TOBACCO – (3.65%)**

 

 

 

 

157,625

 

Heineken Holding NV (Netherlands)

 

6,194,172

 

 

7,900

 

Lotte Chilsung Beverage Co., Ltd. (South Korea)

 

10,711,440

 

 

10,960

 

Lotte Confectionery Co., Ltd. (South Korea)

 

13,366,277

 

 

56,898

 

Nong Shim Holdings Co., Ltd. (South Korea)

 

4,750,269

 

 

 

 

 

 

35,022,158

 

**GENERAL MERCHANDISE STORES – (0.51%)**

 

 

 

 

88,200

 

Target Corp. 

 

4,873,050

 

**HEALTH CARE EQUIPMENT & SERVICES – (5.59%)**

 

 

 

 

201,400

 

Cardinal Health, Inc. 

 

13,240,036

 

 

196,600

 

IDEXX Laboratories, Inc.*

 

17,908,294

 

 

333,800

 

Zimmer Holdings, Inc.*

 

22,531,500

 

 

 

 

 

 

53,679,830

 

**HOMEFURNISHING RETAIL – (0.80%)**

 

 

 

 

202,000

 

Bed Bath & Beyond Inc.*

 

7,726,500

 

**HOME IMPROVEMENT RETAIL – (0.48%)**

 

 

 

 

164,000

 

Lowe’s Cos, Inc. 

 

4,601,840

 

**HOUSEHOLD & PERSONAL PRODUCTS – (0.84%)**

 

 

 

 

14,652

 

Amorepacific Corp.* (South Korea)

 

6,813,083

 

 

8,947

 

Pacific Corp. (South Korea)

 

1,224,484

 

 

 

 

 

 

8,037,567

 

**INSURANCE BROKERS – (2.76%)**

 

 

 

 

681,000

 

Brown & Brown, Inc. 

 

20,811,360

 

 

200,800

 

Marsh & McLennan Cos, Inc. 

 

5,652,520

 

 

 

 

 

 

26,463,880

 

**INTERNET RETAIL – (5.26%)**

 

 

 

 

1,427,900

 

Expedia, Inc.*

 

22,432,309

 

 

1,234,800

 

Netflix Inc.*

 

28,079,352

 

 

 

 

 

 

50,511,661

 

**LIFE & HEALTH INSURANCE – (2.10%)**

 

 

 

 

97,000

 

AFLAC Inc. 

 

4,438,720

 

 

551,900

 

Power Corp. of Canada (Canada) 

 

15,716,374

 

 

 

 

 

 

20,155,094

 

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS OPPORTUNITY FUND – (Continued)**

 

 

 

**Shares**

 

**Security**

**Value**

 

**COMMON STOCK – (Continued)**

 

**MATERIALS – (2.36%)**

 

 

 

 

113,000

 

Sealed Air Corp. 

$

6,115,560

 

 

218,500

 

Sigma-Aldrich Corp. 

 

16,532,803

 

 

 

 

 

 

22,648,363

 

**PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES – (1.01%)**

 

 

 

 

123,400

 

Fisher Scientific International, Inc.*

 

9,654,816

 

**PROPERTY & CASUALTY INSURANCE – (7.15%)**

 

 

 

 

266,000

 

Ambac Financial Group, Inc. 

 

22,011,500

 

 

78,150

 

Cincinnati Financial Corp. 

 

3,758,234

 

 

50,000

 

FPIC Insurance Group, Inc.*

 

1,980,250

 

 

76,915

 

Markel Corp.*

 

31,585,914

 

 

152,300

 

MBIA Inc. 

 

9,357,312

 

 

 

 

 

 

68,693,210

 

**PUBLISHING – (2.70%)**

 

 

 

 

359,000

 

Lagardere S.C.A. (France)

 

25,902,598

 

**REINSURANCE – (2.10%)**

 

 

 

 

48,500

 

Everest Re Group, Ltd. 

 

4,730,205

 

 

86,000

 

RenaissanceRe Holdings Ltd. 

 

4,781,600

 

 

176,025

 

Transatlantic Holdings, Inc. 

 

10,633,670

 

 

 

 

 

 

20,145,475

 

**SOFTWARE & SERVICES – (5.92%)**

 

 

 

 

1,125,747

 

Convera Corp., Class A*

 

5,938,315

 

 

114,000

 

First Data Corp. 

 

4,788,000

 

 

289,800

 

Fiserv, Inc.*

 

13,652,478

 

 

253,700

 

Iron Mountain Inc.*

 

10,893,878

 

 

789,000

 

Microsoft Corp. 

 

21,559,425

 

 

 

 

 

 

56,832,096

 

**SPECIALTY STORES – (1.14%)**

 

 

 

 

276,000

 

Office Depot, Inc.*

 

10,957,200

 

**TECHNOLOGY HARDWARE & EQUIPMENT – (5.82%)**

 

 

 

 

450,900

 

Agilent Technologies, Inc.*

 

14,739,921

 

 

209,000

 

Lexmark International, Inc., Class A*

 

12,050,940

 

 

884,300

 

Molex Inc., Class A

 

29,084,627

 

 

 

 

 

 

55,875,488

 

**TELECOMMUNICATION SERVICES – (3.97%)**

 

 

 

 

203,000

 

American Tower Corp., Class A*

 

7,409,500

 

 

3,261,700

 

Covad Communications Group, Inc.*

 

4,859,933

 

 

343,300

 

SK Telecom Co., Ltd., ADR (South Korea)

 

8,112,179

 

 

1,033,500

 

Sprint Nextel Corp. 

 

17,724,525

 

 

 

 

 

 

38,106,137

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS OPPORTUNITY FUND  – (Continued)**

 

 

 

**Shares/Principal**

 

**Security**

**Value**

 

**COMMON STOCK – (Continued)**

 

**THRIFT & MORTGAGE FINANCE – (2.03%)**

 

 

 

 

252,000

 

Golden West Financial Corp. 

$

19,467,000

 

 

 

 

 

Total Common Stock – (identified cost $727,855,196)

 

918,967,481

 

 

**CONVERTIBLE BONDS – (1.04%)**

 

**TELECOMMUNICATION SERVICES – (1.04%)**

 

 

 

$

5,600,000

 

Level 3 Communications, Inc., Conv. Sr. Notes, 10.00%, 05/01/11

 

 

 

 

 

 

(identified cost $5,600,000)

 

9,996,000

 

 

**SHORT TERM INVESTMENTS – (4.34%)**

 

 

7,234,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $7,237,225

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled 

 

 

 

 

 

 

cash account, 5.00%, 05/01/35-07/01/35, total market 

 

 

 

 

 

 

value $7,378,680)

 

7,234,000

 

 

8,138,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $8,141,662

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages

 

 

 

 

 

 

in a pooled cash account, 0.00%-6.00%, 03/15/13-10/25/36, 

 

 

 

 

 

 

total market value $8,300,760)

 

8,138,000

 

 

9,042,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $9,046,031

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations in a pooled 

 

 

 

 

 

 

cash account, 0.00%, 10/15/13-01/15/21, total market

 

 

 

 

 

 

value $9,222,840)

 

9,042,000

 

 

9,042,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $9,046,046

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and 

 

 

 

 

 

 

obligations in a pooled cash account, 5.25%-6.599%, 04/18/16-09/01/36, 

 

 

 

 

 

 

total market value $9,222,840)

 

9,042,000

 

 

8,259,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $8,262,682

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled 

 

 

 

 

 

 

cash account, 4.50%-8.00%, 12/01/07-08/01/36, total market

 

 

 

 

 

 

value $8,424,180)

 

8,259,000

 

 

 

 

 

Total Short Term Investments – (identified cost $41,715,000)

 

41,715,000

 

 

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS OPPORTUNITY FUND  – (Continued)**

 

 

 

 

 

 

 

 

 

 

Total Investments – (101.09%) – (identified cost $775,170,196) – (a)

$

970,678,481

 

 

 

 

Liabilities Less Other Assets – (1.09%)

 

(10,476,371

)

 

 

 

Net Assets – (100.00%)

$

960,202,110

 

 

*Non-Income Producing Security.

 

ADR:  American Depository Receipt

 

(a)    Aggregate cost for Federal Income Tax purposes is $781,600,338.  At September 30, 2006 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:

 

 

 

 

Unrealized appreciation

$

207,352,325

 

 

 

 

Unrealized depreciation

 

(18,274,182

)

 

 

 

Net unrealized appreciation

$

189,078,143

 

 

(b)    Affiliated Company.  Represents ownership of at least 5% of the voting securities of the issuer and is an affiliate, as defined in the Investment Company Act of 1940, at or during the nine months ended September 30, 2006.  The Fund did not hold any affiliated companies as of September 30, 2006.

 

Transactions during the period in which the issuers were affiliates are as follows:

 

Security

Shares

December 31, 2005

Gross

Additions

Gross

Reductions

Shares

September 30, 2006

 

 

Dividend

Income

 

Robbins & Myers, 

Inc. (c)

 

 

754,500

 

–

 

754,500

 

–

 

 

$

 

41,498

 

 

(c)

Not an affiliate as of September 30, 2006.

 

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS GOVERNMENT BOND FUND**

 
 
 

 

 

 

 

 
**Principal**

 

**Security**

**Value**

 

 
**MORTGAGES – (58.50%)**

 
 
 

 

 

 

 
**COLLATERALIZED MORTGAGE OBLIGATIONS – (5.79%)**

 

 

 

 
$

915,908

 

Fannie Mae, 3.50%, 03/25/16

$

892,348

 

 
 

791,191

 

Fannie Mae, 4.00%, 10/25/23

 

782,994

 

 
 

1,039,004

 

Freddie Mac, 5.00%, 06/15/16

 

1,034,439

 

 
 

 

 

 

 

 

 

 
 

 

 

Total collateralized mortgage obligations –

 

 

 

 
 

 

 

(identified cost $2,715,906)

 

2,709,781

 

 

**FANNIE MAE POOLS – (20.51%)**

 

 

 

 

403,927

 

6.12%, 10/01/08 Pool No. 380999

 

406,306

 

 

5,002,463

 

6.00%, 09/01/17 Pool No. 665776

 

5,082,658

 

 

503,594

 

4.685%, 01/01/33 Pool No. 681153 (b)

 

502,766

 

 

1,690,753

 

4.743%, 05/01/35 Pool No. 826242 (b)

 

1,655,280

 

 

1,981,968

 

5.029%, 01/01/36 Pool No. 848973 (b)

 

1,957,013

 

 

 

 

 

 

 

 

 

 

 

Total Fannie Mae Pools – (identified cost $9,772,035)

 

9,604,023

 

 

**FREDDIE MAC POOLS – (32.20%)**

 

 

 

 

46,228

 

5.50%, 10/01/06 Pool No. M90680

 

46,228

 

 

3,764,928

 

4.00%, 03/01/08 Pool No. M90802

 

3,706,957

 

 

2,739,080

 

4.50%, 03/01/08 Pool No. M90803

 

2,715,094

 

 

179,291

 

4.00%, 07/01/08 Pool No. M90826

 

176,021

 

 

1,356,057

 

3.50%, 08/01/08 Pool No. M90830

 

1,322,063

 

 

1,817,663

 

3.00%, 04/01/10 Pool No. M90982

 

1,722,804

 

 

740,032

 

3.00%, 10/01/10 Pool No. M91001

 

697,527

 

 

991,221

 

3.50%, 04/01/11 Pool No. M91016

 

941,103

 

 

973,618

 

3.50%, 04/01/12 Pool No. M80974

 

920,069

 

 

929,335

 

6.00%, 10/01/16 Pool No. E01054

 

943,420

 

 

1,944,490

 

4.732%, 04/01/35 Pool No. 782528 (b)

 

1,885,610

 

 

 

 

 

 

 

 

 

 

 

Total Freddie Mac Pools – (identified cost $15,230,577)

 

15,076,896

 

 

 

 

 

 

 

 

 

 

 

Total Mortgages – (identified cost $27,718,518)

 

27,390,700

 

 

**GOVERNMENT AGENCY NOTES – (37.45%)**

 

 

 

 

5,000,000

 

Fannie Mae, 7.125%, 03/15/07

 

5,041,519

 

 

575,000

 

Fannie Mae, 4.75%, 12/28/07 (c)

 

573,802

 

 

2,000,000

 

Fannie Mae, 6.00%, 05/15/08

 

2,030,624

 

 

3,000,000

 

Fannie Mae, 5.40%, 04/13/09

 

3,000,013

 

 

1,900,000

 

Federal Home Loan Bank, 3.875%, 09/14/07

 

1,877,784

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS GOVERNMENT BOND FUND – (Continued)**

 
 
 

 

 

 

 

 
**Principal**

 

**Security**

**Value**

 

 
**GOVERNMENT AGENCY NOTES – (Continued)**

 

 

 

 
$

1,000,000

 

Federal Home Loan Bank, 4.00%, 06/13/08

$

983,073

 

 
 

3,000,000

 

Federal Home Loan Bank, 0.01%, 07/17/08 (b)

 

2,734,119

 

 
 

300,000

 

Federal Home Loan Bank, 5.37%, 07/12/11

 

298,284

 

 
 

1,000,000

 

Freddie Mac, 3.00%, 11/17/06

 

997,208

 

 
 

 

 
 
 

 

 

Total Government Agency Notes – (identified cost $17,645,119)

 

17,536,426

 

 

**SHORT TERM INVESTMENTS – (3.64%)**

 

 

296,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $296,132

 

 

 

 

 

 

(collateralized by: U.S. Government agencymortgages 

 

 

 

 

 

 

in a pooled cash account, 5.00%, 05/01/35-07/01/35,

 

 

 

 

 

 

total market value $301,920)

 

296,000

 

 

333,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $333,150

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages

 

 

 

 

 

 

in a pooled cash account, 0.00%-6.00%, 03/15/13-10/25/36, 

 

 

 

 

 

 

total market value $339,660)

 

333,000

 

 

370,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $370,165

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations 

 

 

 

 

 

 

in a pooled cash account, 0.00%, 10/15/13-01/15/21, 

 

 

 

 

 

 

total market value $377,400)

 

370,000

 

 

370,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $370,166

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and obligations 

 

 

 

 

 

 

in a pooledcash account, 5.25%-6.599%, 04/18/16-09/01/36, 

 

 

 

 

 

 

total market value $377,400)

 

370,000

 

 

337,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $337,150

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages 

 

 

 

 

 

 

in a pooled cash account, 4.50%-8.00%, 12/01/07-08/01/36, 

 

 

 

 

 

 

total market value $343,740)

 

337,000

 

 

 

 

 

Total Short Term Investments – (identified cost $1,706,000)

 

1,706,000

 

 

 

 

 

Total Investments – (99.59%) – (identified cost $47,069,637) – (a)

 

46,633,126

 

 

 

 

Other Assets Less Liabilities – (0.41%)

 

193,719

 

 

 

 

Net Assets – (100.00%)

$

46,826,845

 

 

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS GOVERNMENT BOND FUND – (Continued)**

 
 
 

 

 

 

 

 
 

 

 

 

 

 

(a)    Aggregate cost for Federal Income Tax purposes is $47,069,637. At September 30, 2006 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:

 

 

 

 

Unrealized appreciation

$

34,003

 

 

 

 

Unrealized depreciation

 

(470,514

)

 

 

 

Net unrealized depreciation

$

(436,511

)

 

(b)    The interest rates on adjustable rate securities, shown as of September 30, 2006, may change daily or less frequently and are based on indices of market interests rates.

 

(c)    Represents a step-up bond: a bond that pays one coupon rate for an initial period followed by a higher coupon rate.

 

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 (*Unaudited*)

**DAVIS GOVERNMENT MONEY MARKET FUND**

 

 

 

 

 

**Principal**

 

**Security**

**Value**

 

**FANNIE MAE – (7.29%)**

 
$

1,000,000

 

3.01%, 11/17/06

$

997,451

 

 

2,500,000

 

2.41%, 11/28/06

 

2,488,924

 

 

2,000,000

 

2.20%, 12/04/06

 

1,988,607

 

 

10,500,000

 

4.00%, 12/20/06 (c)

 

10,465,713

 

 

2,000,000

 

2.125%, 12/29/06

 

1,986,653

 

 

5,000,000

 

3.48%, 12/29/06 (c)

 

4,976,690

 

 

5,500,000

 

3.51%, 1/05/07

 

5,480,938

 

 

3,190,000

 

2.625%, 1/19/07

 

3,162,859

 

 

1,500,000

 

2.50%, 1/30/07

 

1,485,512

 

 

1,800,000

 

3.55%, 01/30/07

 

1,788,597

 

 

3,900,000

 

2.375%, 02/15/07

 

3,857,127

 

 

100,000

 

4.10%, 04/18/07

 

99,324

 

 

800,000

 

4.15%, 07/13/07

 

793,027

 

 

 

 

 

 

 

 

 

 

 

Total FANNIE MAE – (identified cost $39,571,422)

 

39,571,422

 

 

**FEDERAL FARM CREDIT BANK – (3.82%)**

 
 

20,000,000

 

5.18%, 11/13/06 (b)

 

19,999,641

 

 

750,000

 

2.25%, 06/28/07

 

733,558

 

 

 

 

 

 

 

 

 

 

 

Total Federal Farm Credit Bank – (identified cost $20,733,199)

 

20,733,199

 

 

**FEDERAL HOME LOAN BANK – (23.12%)**

 
 

7,150,000

 

4.30%, 10/30/06

 

7,146,580

 

 

30,000,000

 

4.99%, 11/09/06 (b)

 

30,000,000

 

 

2,500,000

 

2.75%, 11/15/06

 

2,492,389

 

 

1,175,000

 

4.875%, 11/15/06

 

1,173,989

 

 

4,000,000

 

3.05%, 11/27/06

 

3,988,103

 

 

1,000,000

 

3.015%, 12/08/06

 

995,479

 

 

2,000,000

 

2.29%, 12/11/06

 

1,990,003

 

 

4,900,000

 

5.27%, 12/13/06 (b)

 

4,899,263

 

 

3,425,000

 

3.375%, 12/14/06

 

3,411,903

 

 

2,000,000

 

2.20%, 12/26/06

 

1,988,153

 

 

1,000,000

 

2.28%, 12/26/06

 

992,505

 

 

1,225,000

 

3.50%, 12/28/06

 

1,219,757

 

 

1,550,000

 

3.50%, 12/28/06

 

1,543,366

 

 

1,500,000

 

2.04%, 12/29/06

 

1,487,747

 

 

1,675,000

 

3.40%, 12/29/06

 

1,667,356

 

 

1,000,000

 

4.12%, 12/29/06

 

996,500

 

 

1,040,000

 

2.52%, 01/29/07

 

1,030,417

 

 

4,625,000

 

5.25%, 02/01/07

 

4,624,572

 

 

3,400,000

 

3.375%, 02/15/07

 

3,372,213

 

 

4,000,000

 

4.80%, 02/26/07

 

3,996,806

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS GOVERNMENT MONEY MARKET FUND – (Continued)**

 

 

 

 

 

**Principal**

 

**Security**

**Value**

 

**FEDERAL HOME LOAN BANK – (Continued)**

 
$

3,000,000

 

2.50%, 04/05/07

$

2,954,094

 

 

500,000

 

2.59%, 04/05/07

 

493,174

 

 

600,000

 

4.25%, 04/16/07

 

596,583

 

 

1,000,000

 

2.40%, 04/20/07

 

983,221

 

 

500,000

 

3.50%, 05/15/07

 

494,522

 

 

4,300,000

 

3.125%, 05/21/07

 

4,241,690

 

 

1,000,000

 

5.25%, 06/08/07 (b)

 

999,728

 

 

28,000,000

 

5.065%, 07/05/07 (b)

 

28,000,000

 

 

1,525,000

 

3.15%, 08/13/07

 

1,497,907

 

 

1,000,000

 

5.50%, 08/17/07

 

1,001,898

 

 

2,000,000

 

3.70%, 08/24/07

 

1,972,868

 

 

800,000

 

4.325%, 08/24/07

 

793,300

 

 

1,000,000

 

4.50%, 09/28/07

 

991,630

 

 

1,450,000

 

4.40%, 10/12/07 (c)

 

1,443,400

 

 

 

 

 

 

 

 

 

 

 

Total Federal Home Loan Bank – (identified cost $125,481,116)

 

125,481,116

 

 

**FREDDIE MAC – (12.79%)**

 
 

750,000

 

2.75%, 10/06/06

 

749,750

 

 

8,000,000

 

2.75%, 10/15/06

 

7,992,822

 

 

2,000,000

 

3.00%, 11/17/06

 

1,994,265

 

 

1,000,000

 

2.45%, 12/11/06

 

995,619

 

 

500,000

 

2.15%, 12/13/06

 

496,637

 

 

4,000,000

 

4.72%, 01/12/07

 

3,994,454

 

 

17,000,000

 

2.375%, 02/15/07

 

16,800,170

 

 

10,000,000

 

5.05%, 03/15/07

 

9,985,259

 

 

700,000

 

6.80%, 03/19/07

 

704,714

 

 

9,370,000

 

4.125%, 04/02/07

 

9,315,137

 

 

13,250,000

 

4.50%, 04/18/07

 

13,191,966

 

 

1,712,000

 

3.75%, 08/03/07

 

1,690,744

 

 

1,500,000

 

3.10%, 09/17/07

 

1,470,180

 

 

 

 

 

 

 

 

 

 

 

Total FREDDIE MAC – (identified cost $69,381,717)

 

69,381,717

 

 

**PRIVATE EXPORT FUNDING – (0.56%)**

 
 

3,000,000

 

6.49%, 07/15/07 (identified cost $3,026,289)

 

3,026,289

 

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS GOVERNMENT MONEY MARKET FUND – (Continued)**

 

 

 

 

 

**Principal**

 

**Security**

**Value**

 

**REPURCHASE AGREEMENTS – (52.48%)**

 
 

$

49,392,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $49,414,021

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled 

 

 

 

 

 

 

cash account, 5.00%, 05/01/35-07/01/35, total market 

 

 

 

 

 

 

value $50,379,840)

$

49,392,000

 

 

55,566,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $55,591,005

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages 

 

 

 

 

 

 

in a pooled cash account, 0.00%-6.00%, 03/15/13-10/25/36, 

 

 

 

 

 

 

total market value $56,677,320)

 

55,566,000

 

 

61,740,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $61,767,526

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations in a pooled 

 

 

 

 

 

 

cash account, 0.00%, 10/15/13-01/15/21, total market

 

 

 

 

 

 

value $62,974,800)

 

61,740,000

 

 

61,740,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $61,767,629

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and 

 

 

 

 

 

 

obligations in a pooled cash account, 5.25%-6.599%, 04/18/16-09/01/36, 

 

 

 

 

 

 

total market value $62,974,800)

 

61,740,000

 

 

56,396,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $56,421,143

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled 

 

 

 

 

 

 

cash account, 4.50%-8.00%, 12/01/07-08/01/36, total market

 

 

 

 

 

 

value $57,523,920)

 

56,396,000

 

 

 

 

 

Total Repurchase Agreements – (identified cost $284,834,000)

 

284,834,000

 

 

 

 

 

Total Investments – (100.06%) – (identified cost $543,027,743) – (a)

 

543,027,743

 

 

 

 

Liabilities Less Other Assets – (0.06%)

 

(301,709

)

 

 

 

Net Assets – (100%)

$

542,726,034

 

 

(a)

Aggregate cost for Federal Income Tax Purposes is $543,027,743.

(b)    The interest rates on floating rate securities, shown as of September 30, 2006, may change daily or less frequently and are based on indices of market interests rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities’ variable rates. 

(c)    Represents a step-up bond: a bond that pays one coupon rate for an initial period followed by a higher coupon rate.

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS FINANCIAL FUND**

 

 

 

 

 

**Shares**

 

**Security**

**Value**

 

**COMMON STOCK – (99.44%)**

 
 

**CAPITAL GOODS – (7.45%)**

 

 

 

 

2,450,000

 

Tyco International Ltd. 

$

68,575,500

 

**CAPITAL MARKETS – (3.37%)**

 

 

 

 

660,300

 

Ameriprise Financial, Inc. 

 

30,968,070

 

**COMMERCIAL BANKS – (5.07%)**

 

 

 

 

1,208,000

 

Commerce Bancorp, Inc. 

 

44,345,680

 

 

75,700

 

ICICI Bank Ltd., ADR (India)

 

2,324,747

 

 

 

 

 

 

46,670,427

 

**COMMERCIAL SERVICES & SUPPLIES – (7.20%)**

 

 

 

 

883,750

 

D&B Corp.*

 

66,272,412

 

**CONSUMER FINANCE – (18.01%)**

 

 

 

 

1,949,000

 

American Express Co. 

 

109,299,920

 

 

815,000

 

First Marblehead Corp. 

 

56,446,900

 

 

 

 

 

 

165,746,820

 

**CONSUMER SERVICES – (1.87%)**

 

 

 

 

791,000

 

H&R Block, Inc. 

 

17,196,340

 

**DIVERSIFIED FINANCIAL SERVICES – (11.41%)**

 

 

 

 

1,019,560

 

JPMorgan Chase & Co. 

 

47,878,538

 

 

872,600

 

Moody’s Corp. 

 

57,050,588

 

 

 

 

 

 

104,929,126

 

**FOOD, BEVERAGE & TOBACCO – (2.87%)**

 

 

 

 

345,000

 

Altria Group, Inc. 

 

26,409,750

 

**LIFE & HEALTH INSURANCE – (1.77%)**

 

 

 

 

208,700

 

China Life Insurance Co., Ltd., ADR (China)

 

16,311,992

 

**MATERIALS – (2.70%)**

 

 

 

 

459,000

 

Sealed Air Corp. 

 

24,841,080

 

**MULTI-LINE INSURANCE – (12.01%)**

 

 

 

 

826,796

 

American International Group, Inc. 

 

54,783,503

 

 

1,470,600

 

Loews Corp. 

 

55,735,740

 

 

 

 

 

 

110,519,243

 

**PROPERTY & CASUALTY INSURANCE – (8.71%)**

 

 

 

 

337,300

 

FPIC Insurance Group, Inc.*

 

13,358,766

 

 

88,200

 

Markel Corp.*

 

36,220,212

 

 

1,244,000

 

Progressive Corp. (Ohio)

 

30,527,760

 

 

 

 

 

 

80,106,738

 

**REINSURANCE – (11.76%)**

 

 

 

 

225,000

 

Everest Re Group, Ltd. 

 

21,944,250

 

 

1,428,187

 

Transatlantic Holdings, Inc. 

 

86,276,777

 

 

 

 

 

 

108,221,027

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS FINANCIAL FUND – (Continued)**

 
 
 

 

 

 

 

 
**Shares/Principal**

 

**Security**

**Value**

 

 
**COMMON STOCK – (Continued)**

 
 

**THRIFT & MORTGAGE FINANCE – (5.24%)**

 

 

 

 

624,100

 

Golden West Financial Corp. 

$

48,211,725

 

 

 

 

 

Total Common Stock – (identified cost $417,919,881)

 

914,980,250

 

 

**SHORT TERM INVESTMENTS – (0.62%)**

 

$

993,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $993,443

 

 

 

 

 

 

(collateralized by: U.S. Government agencymortgages 

 

 

 

 

 

 

in a pooled cash account, 5.00%, 05/01/35-07/01/35,

 

 

 

 

 

 

total market value $1,012,860)

 

993,000

 

 

1,117,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $1,117,503

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages

 

 

 

 

 

 

in a pooled cash account, 0.00%-6.00%, 03/15/13-10/25/36, 

 

 

 

 

 

 

total market value $1,139,340)

 

1,117,000

 

 

1,242,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $1,242,554

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations 

 

 

 

 

 

 

in a pooled cash account, 0.00%, 10/15/13-01/15/21, 

 

 

 

 

 

 

total market value $1,266,840)

 

1,242,000

 

 

1,242,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $1,242,556

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and obligations 

 

 

 

 

 

 

in a pooledcash account, 5.25%-6.599%, 04/18/16-09/01/36, 

 

 

 

 

 

 

total market value $1,266,840)

 

1,242,000

 

 

1,134,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $1,134,506

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages 

 

 

 

 

 

 

in a pooled cash account, 4.50%-8.00%, 12/01/07-08/01/36, 

 

 

 

 

 

 

total market value $1,156,680)

 

1,134,000

 

 

 

 

 

Total Short Term Investments – (identified cost $5,728,000)

 

5,728,000

 

 

 

 

 

Total Investments – (100.06%) – (identified cost $423,647,881) – (a)

 

920,708,250

 

 

 

 

Liabilities Less Other Assets – (0.06%)

 

(546,139

)

 

 

 

Net Assets – (100%)

$

920,162,111

 

 

 

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS FINANCIAL FUND – (Continued)**

 
 
 

 

 

 

 

 
 

 

 

 

 

 

*Non-Income Producing Security.

 

ADR: American Depository Receipt 

 

(a)    Aggregate cost for Federal Income Tax purposes is $423,647,881.  At September 30, 2006 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:

 

 

 

 

Unrealized appreciation

$

497,060,369

 

 

 

 

Unrealized depreciation

 

–

 

 

 

 

Net unrealized appreciation

$

497,060,369

 

 

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS APPRECIATION & INCOME FUND**

 

 

 

 

**Shares/Principal**

**Security**

**Value**

 

**CONVERTIBLE PREFERRED STOCK – (5.37%)**

 
 

**CAPITAL GOODS – (1.12%)**

 

 

 

 

119,297

 

United Rentals Trust I, 6.50%, 08/01/28, Conv. Pfd. 

$

5,606,959

 

**PROPERTY & CASUALTY INSURANCE – (0.95%)**

 

 

 

 

192,920

 

Travelers Property Casualty Corp., 4.50%, 04/15/32, Conv. Pfd. 

 

4,749,690

 

**TRANSPORTATION – (1.13%)**

 

 

 

 

161,300

 

Continental Airlines Finance Trust II, 6.00%, 11/15/30, Cum. Conv. Pfd. 

 

5,665,663

 

**UTILITIES – (2.17%)**

 

 

 

 

221,310

 

AES Trust III, 6.75%, 10/15/29, Conv. Pfd. 

 

10,822,059

 

 

 

 

 

 

 

 

 

 

 

Total Convertible Preferred Stock – (identified cost $21,007,328)

 

26,844,371

 

 

**CONVERTIBLE BONDS – (35.76%)**

 

**CAPITAL GOODS – (4.43%)**

 

 

 

$

17,600,000

 

Masco Corp., Series B Conv. Sr. Notes, Zero Cpn., 2.98%,

 

 

 

 

 

 

07/20/31 (c)(d)

 

8,272,000

 

 

8,500,000

 

Quanta Services, Inc., Conv. Sub. Deb., 4.50%, 10/01/23

 

13,897,500

 

 

 

 

 

 

22,169,500

 

**COMMERCIAL SERVICES & SUPPLIES – (5.25%)**

 

 

 

 

15,710,000

 

School Specialty, Inc., Conv. Sub. Notes, 3.75%/Zero Cpn., 08/01/23 (e)

 

16,200,937

 

 

10,000,000

 

Waste Connections, Inc., Ser. 144A Conv. Sr. Notes, 3.75%, 04/01/26 (b)

 

10,050,000

 

 

 

 

 

 

26,250,937

 

**CONSUMER FINANCE – (2.26%)**

 

 

 

 

11,100,000

 

American Express Co., Conv. Sub. Notes, 1.85%/Zero Cpn., 12/01/33 (e)

 

11,280,375

 

**ENERGY – (4.02%)**

 

 

 

 

12,400,000

 

Lehman Brothers Holdings Inc., Conv. Notes, (Convertible into

 

 

 

 

 

 

Devon Energy Corp.), 0.25%, 08/23/11 (f)

 

20,105,360

 

**FOOD & STAPLES RETAILING – (0.63%)**

 

 

 

 

2,800,000

 

Costco Wholesale Corp., Conv. Sub. Notes, Zero Cpn., 1.03%,

 

 

 

 

 

 

08/19/17 (c)(d)

 

3,174,500

 

**INTERNET RETAIL – (1.37%)**

 

 

 

 

7,000,000

 

Amazon.com, Inc., Conv. Sub. Notes, 4.75%, 02/01/09

 

6,833,750

 

**MATERIALS – (2.64%)**

 

 

 

 

13,500,000

 

Sealed Air Corp., Ser. 144A Conv. Sr. Notes, 3.00%, 06/30/33 (b)

 

13,230,000

 

**MOVIES & ENTERTAINMENT – (1.86%)**

 

 

 

 

16,050,000

 

News America Inc., Conv. Notes, Zero Cpn., 3.38%, 02/28/21 (c)(d)(f)

 

9,288,295

 

**MULTI-LINE INSURANCE – (3.03%)**

 

 

 

 

2,500,000

 

American International Group, Inc., Conv. Sr. Deb., Zero Cpn., 1.76%,

 

 

 

 

 

 

11/09/31 (c)(d)

 

1,762,500

 

 

13,895,000

 

American International Group, Inc., Conv. Sr. Notes, 0.50%, 05/15/07

 

13,408,675

 

 

 

 

 

 

15,171,175

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS APPRECIATION & INCOME FUND – (Continued)**

 

 

 

 

**Principal/Shares**

**Security**

**Value**

 

**CONVERTIBLE BONDS – (Continued)**

 
 

**PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES – (0.83%)**

 

 

 

$

4,400,000

 

Valeant Pharmaceuticals International, Conv. Sub. Notes,

 

 

 

 

 

 

4.00%, 11/15/13

$

4,152,500

 

**REAL ESTATE – (2.15%)**

 

 

 

 

8,500,000

 

Vornado Realty L.P., Conv. Sr. Deb., 3.875%, 04/15/25

 

10,731,250

 

**RESIDENTIAL/COMMERCIAL BUILDING – (0.62%)**

 

 

 

 

3,100,000

 

WCI Communities, Inc., Conv. Sr. Sub. Notes, 4.00%, 08/05/23

 

3,080,625

 

**SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT – (6.67%)**

 

 

 

 

5,260,000

 

Fairchild Semiconductor Corp., Conv. Sr. Sub., 5.00%, 11/01/08

 

5,233,700

 

 

20,000,000

 

Intel Corp., Conv. Sub. Deb., 2.95%, 12/15/35

 

17,975,000

 

 

10,220,000

 

International Rectifier Corp., Conv. Sub. Notes, 4.25%, 07/15/07

 

10,143,350

 

 

 

 

 

 

33,352,050

 

 

 

 

 

 

 

 

 

 

 

Total Convertible Bonds – (identified cost $166,435,665)

 

178,820,317

 

 

**CORPORATE BONDS – (3.14%)**

 

**AUTOMOTIVE RETAIL – (0.36%)**

 

 

 

 

1,900,000

 

AutoZone, Inc., Sr. Notes, 5.50%, 11/15/15

 

1,803,873

 

**ENERGY – (0.28%)**

 

 

 

 

1,300,000

 

Occidental Petroleum Corp., Sr. Notes, 6.75%, 01/15/12

 

1,390,832

 

**FOOD, BEVERAGE & TOBACCO – (1.44%)**

 

 

 

 

7,000,000

 

Tyson Foods, Inc., Sr. Notes, 6.60%, 04/01/16

 

7,220,115

 

**HOUSEHOLD & PERSONAL PRODUCTS – (1.06%)**

 

 

 

 

6,000,000

 

Avon Products, Inc., Sr. Notes, 4.20%, 07/15/18

 

5,279,766

 

 

 

 

 

 

 

 

 

 

 

Total Corporate Bonds  – (identified cost $15,659,670)

 

15,694,586

 

 

**COMMON STOCK – (31.65%)**

 

**AUTOMOTIVE RETAIL – (1.30%)**

 

 

 

 

62,900

 

AutoZone, Inc.*

 

6,497,570

 

**CAPITAL GOODS – (1.42%)**

 

 

 

 

230,400

 

Masco Corp. 

 

6,317,568

 

 

47,700

 

Quanta Services, Inc.*

 

804,222

 

 

 

 

 

 

7,121,790

 

**COMMERCIAL BANKS – (0.89%)**

 

 

 

 

242,730

 

HSBC Holdings PLC (United Kingdom)

 

4,428,865

 

**COMMERCIAL SERVICES & SUPPLIES – (1.27%)**

 

 

 

 

168,000

 

Waste Connections, Inc.*

 

6,368,880

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS APPRECIATION & INCOME FUND – (Continued)**

 

 

 

 

**Shares**

**Security**

**Value**

 

**COMMON STOCK – (Continued)**

 
 

**DEPARTMENT STORES – (3.68%)**

 

 

 

 

140,350

 

J. C. Penney Co., Inc. 

$

9,598,537

 

 

136,000

 

Kohl’s Corp.*

 

8,829,120

 

 

 

 

 

 

18,427,657

 

**DIVERSIFIED FINANCIAL SERVICES – (1.11%)**

 

 

 

 

111,500

 

Citigroup Inc. 

 

5,538,205

 

**ENERGY – (0.28%)**

 

 

 

 

29,000

 

Occidental Petroleum Corp. 

 

1,395,190

 

**FOOD & STAPLES RETAILING – (0.64%)**

 

 

 

 

64,900

 

Costco Wholesale Corp. 

 

3,223,259

 

**FOOD, BEVERAGE & TOBACCO – (4.42%)**

 

 

 

 

275,000

 

Coca-Cola Co. 

 

12,287,000

 

 

617,300

 

Tyson Foods, Inc., Class A

 

9,802,724

 

 

 

 

 

 

22,089,724

 

**HEALTH CARE EQUIPMENT & SERVICES – (3.08%)**

 

 

 

 

256,600

 

Universal Health Services, Inc., Class B

 

15,378,038

 

**HOUSEHOLD & PERSONAL PRODUCTS – (2.08%)**

 

 

 

 

339,200

 

Avon Products, Inc. 

 

10,399,872

 

**MATERIALS – (1.08%)**

 

 

 

 

100,000

 

Sealed Air Corp. 

 

5,412,000

 

**MOVIES & ENTERTAINMENT – (0.47%)**

 

 

 

 

115,000

 

News Corp., Class B

 

2,373,600

 

**MULTI-LINE INSURANCE – (1.18%)**

 

 

 

 

89,100

 

American International Group, Inc. 

 

5,903,766

 

**REAL ESTATE – (5.36%)**

 

 

 

 

245,667

 

General Growth Properties, Inc. 

 

11,706,033

 

 

135,160

 

SL Green Realty Corp. 

 

15,097,372

 

 

 

 

 

 

26,803,405

 

**SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT– (2.37%)**

 

 

 

 

247,900

 

Fairchild Semiconductor International, Inc.*

 

4,635,730

 

 

206,700

 

International Rectifier Corp.*

 

7,201,428

 

 

 

 

 

 

11,837,158

 

**SOFTWARE & SERVICES – (1.02%)**

 

 

 

 

103,000

 

SAP AG, ADR (Germany)

 

5,098,500

 

 

 

 

 

 

 

 

 

 

 

Total Common Stock – (identified cost $112,181,812)

 

158,297,479

 

 

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS APPRECIATION & INCOME FUND – (Continued)**

 

 

 

 

**Principal**

**Security**

**Value**

 

**SHORT TERM INVESTMENTS – (22.88%)**

 
 

 

**FEDERAL HOME LOAN BANK– (4.99%)**

 

$

25,234,000

 

5.145%, 12/15/06 – (identified cost $24,959,917)(g)

$

24,959,917

 

 

**REPURCHASE AGREEMENTS – (17.89%)**

 

 

15,509,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $15,515,914

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled cash

 

 

 

 

 

 

account, 5.00%, 05/01/35-07/01/35, total market value $15,819,180)

 

15,509,000

 

 

17,448,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $17,455,852

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled

 

 

 

 

 

 

cash account, 0.00%-6.00%, 03/15/13-10/25/36, total market

 

 

 

 

 

 

value $17,796,960)

 

17,448,000

 

 

19,386,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $19,394,643

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations in a pooled

 

 

 

 

 

 

cash account, 0.00%, 10/15/13-01/15/21, total market

 

 

 

 

 

 

value $19,773,720)

 

19,386,000

 

 

19,386,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $19,394,675

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and obligations 

 

 

 

 

 

 

in a pooled cash account, 5.25%-6.599%, 04/18/16-09/01/36, total 

 

 

 

 

 

 

market value $19,773,720)

 

19,386,000

 

 

17,709,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $17,716,895

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled

 

 

 

 

 

 

cash account, 4.50%-8.00%, 12/01/07-08/01/36, total market

 

 

 

 

 

 

value $18,063,180)

 

17,709,000

 

 

 

 

 

 

 

 

 

 

 

Total Repurchase Agreements – (identified cost $89,438,000)

 

89,438,000

 

 

 

 

 

 

 

 

 

 

 

Total Short Term Investments – (identified cost $114,397,917)

 

114,397,917

 

 

 

 

 

Total Investments – (98.80%) – (identified cost $429,682,392) – (a)

 

494,054,670

 

 

 

 

Other Assets Less Liabilities – (1.20%)

 

5,979,040

 

 

 

 

Net Assets – (100.00%)

$

500,033,710

 

 

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS APPRECIATION & INCOME FUND – (Continued)**

 

 

 

 

 

 

 

 

 

 
 

*Non-Income Producing Security.

ADR:  American Depository Receipt

(a)    Aggregate cost for Federal Income Tax purposes is $429,804,408.  At September 30, 2006 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:

 

 

 

Unrealized appreciation

$

66,957,841

 

 

 

 

Unrealized depreciation

 

(2,707,579

)

 

 

 

Net unrealized appreciation

$

64,250,262

 

 

(b)    These securities are subject to Rule 144A.  The Board of Directors of the Fund has determined that there is sufficient liquidity in these securities to realize current valuations.  These securities amounted to $23,280,000, or 4.66% of the Fund’s net assets, as of September 30, 2006.

(c)    As of September 30, 2006, zero coupon bonds represented $22,497,295, or 4.50% of the Fund’s net assets. Because zero coupon bonds pay no interest their value is generally more volatile than the value of other debt securities.

(d)

Zero coupon bonds reflect effective yield on the date of purchase.

(e)    Represents a step-down bond: a bond that pays one coupon rate for an initial period followed by a lower coupon rate.

(f)    Illiquid Security – Securities may be considered illiquid if they lack a readily available market or if valuation has not changed for a certain period of time. The aggregate value of illiquid securities in Davis Appreciation & Income Fund was $29,393,655, or 5.88% of the Fund’s net assets as of September 30, 2006.

(g)    A sufficient amount of liquid assets has been designated to cover outstanding futures contracts, as follows:

 

 

Unrealized

 

 

Contracts

Appreciation

 

S&P 500 Index Futures Contract, expiring 12/14/06

 

 

 

(underlying face amount at value $25,562,600)

76

$329,071

 

 

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS REAL ESTATE FUND**

 

 

 

 

**Shares**

**Security**

**Value**

 

**COMMON STOCK – (89.56%)**

 
 

**DIVERSIFIED REITS – (5.16%)**

 

 

 

 

1,054,900

 

Spirit Finance Corp. 

$

12,247,389

 

 

258,662

 

Vornado Realty Trust

 

28,194,158

 

 

 

 

 

 

40,441,547

 

**INDUSTRIAL REITS – (8.01%)**

 

 

 

 

319,700

 

AMB Property Corp. 

 

17,618,667

 

 

234,800

 

First Potomac Realty Trust. 

 

7,095,656

 

 

666,792

 

ProLogis

 

38,047,152

 

 

 

 

 

 

62,761,475

 

**MORTGAGE REITS – (1.23%)**

 

 

 

 

384,300

 

Gramercy Capital Corp. 

 

9,688,203

 

**OFFICE REITS – (25.05%)**

 

 

 

 

419,013

 

Alexandria Real Estate Equities, Inc. 

 

39,303,420

 

 

306,242

 

Boston Properties, Inc. 

 

31,647,048

 

 

415,400

 

Columbia Equity Trust, Inc. 

 

6,916,410

 

 

729,238

 

Corporate Office Properties Trust

 

32,640,693

 

 

799,300

 

Cousins Properties, Inc. 

 

27,344,053

 

 

734,073

 

Duke Realty Corp. 

 

27,417,627

 

 

278,158

 

SL Green Realty Corp. 

 

31,070,249

 

 

 

 

 

 

196,339,500

 

**REAL ESTATE MANAGEMENT & DEVELOPMENT – (14.02%)**

 

 

 

 

1,644,983

 

Brixton PLC (United Kingdom)

 

16,293,120

 

 

371,700

 

Capital & Regional PLC (United Kingdom)

 

8,253,999

 

 

330,819

 

Derwent Valley Holdings PLC (United Kingdom)

 

11,304,217

 

 

821,884

 

Forest City Enterprises, Inc., Class A

 

44,628,301

 

 

433,100

 

Hammerson PLC (United Kingdom)

 

10,639,206

 

 

259,500

 

St. Joe Company

 

14,238,765

 

 

360,600

 

Slough Estates PLC (United Kingdom)

 

4,489,878

 

 

 

 

 

 

109,847,486

 

**RESIDENTIAL REITS – (5.48%)**

 

 

 

 

604,800

 

American Campus Communities, Inc. 

 

15,428,448

 

 

910,721

 

United Dominion Realty Trust, Inc. 

 

27,503,774

 

 

 

 

 

 

42,932,222

 

**RETAIL REITS – (23.51%)**

 

 

 

 

560,708

 

Developers Diversified Realty Corp. 

 

31,265,078

 

 

815,557

 

General Growth Properties, Inc. 

 

38,861,291

 

 

732,590

 

Kimco Realty Corp. 

 

31,406,133

 

 

190,600

 

Macerich Co. 

 

14,554,216

 

 

229,600

 

Pan Pacific Retail Properties, Inc. 

 

15,938,832

 

 

 

 

 

**DAVIS SERIES, INC.**

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS REAL ESTATE FUND – (Continued)**

 

 

 

 

**Shares**

**Security**

**Value**

 

**COMMON STOCK – (Continued)**

 
 

**RETAIL  REITS – (Continued)**

 

 

 

 

135,200

 

Pennsylvania REIT

$

5,755,464

 

 

387,978

 

Regency Centers Corp. 

 

26,677,367

 

 

218,853

 

Simon Property Group, Inc. 

 

19,832,459

 

 

 

 

 

 

184,290,840

 

**SPECIALIZED REITS – (4.38%)**

 

 

 

 

393,500

 

U-Store-It Trust

 

8,444,510

 

 

670,800

 

Ventas, Inc. 

 

25,852,632

 

 

 

 

 

 

34,297,142

 

**TRANSPORTATION – (2.72%)**

 

 

 

 

370,000

 

Alexander & Baldwin, Inc. 

 

16,416,900

 

 

85,700

 

Florida East Coast Industries, Inc. 

 

4,891,756

 

 

 

 

 

 

21,308,656

 

 

 

 

 

 

 

 

 

 

 

Total Common Stock – (identified cost $446,169,475)

 

701,907,071

 

 

**PREFERRED STOCK – (0.42%)**

 

**RESIDENTIAL REITS – (0.42%)**

 

 

 

 

43,700

 

Equity Residential, 7.00%, Series E, Cum. Conv. Pfd. 

 

2,469,050

 

 

32,000

 

Equity Residential, 8.60%, Series D, Cum. Pfd. 

 

815,680

 

 

 

 

 

 

 

 

 

 

 

Total Preferred Stock – (identified cost $1,930,717)

 

3,284,730

 

 

 

 

 

 

**DAVIS SERIES, INC.**  

SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 2006 *(Unaudited)*

**DAVIS REAL ESTATE FUND – (Continued)**

 

 

 

 

**Principal**

**Security**

**Value**

 

**SHORT TERM INVESTMENTS – (8.99%)**

 
 

$

12,211,000

 

Banc of America Securities LLC Joint Repurchase Agreement, 5.35%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $12,216,444

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled cash

 

 

 

 

 

 

account, 5.00%, 05/01/35-07/01/35, total market value $12,455,220)

$

12,211,000

 

 

13,738,000

 

Citigroup Global Markets, Inc. Joint Repurchase Agreement, 5.40%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $13,744,182

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled

 

 

 

 

 

 

cash account, 0.00%-6.00%, 03/15/13-10/25/36, total market

 

 

 

 

 

 

value $14,012,760)

 

13,738,000

 

 

15,264,000

 

Morgan Stanley & Co. Joint Repurchase Agreement, 5.35%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $15,270,805

 

 

 

 

 

 

(collateralized by: U.S. Government agency obligations in a pooled

 

 

 

 

 

 

cash account, 0.00%, 10/15/13-01/15/21, total market

 

 

 

 

 

 

value $15,569,280)

 

15,264,000

 

 

15,264,000

 

Nomura Securities International, Inc. Joint Repurchase Agreement, 5.37%,

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $15,270,831

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages and obligations 

 

 

 

 

 

 

in a pooled cash account, 5.25%-6.599%, 04/18/16-09/01/36, total 

 

 

 

 

 

 

market value $15,569,280)

 

15,264,000

 

 

13,944,000

 

UBS Securities LLC Joint Repurchase Agreement, 5.35%, 

 

 

 

 

 

 

10/02/06, dated 09/29/06, repurchase value of $13,950,217

 

 

 

 

 

 

(collateralized by: U.S. Government agency mortgages in a pooled

 

 

 

 

 

 

cash account, 4.50%-8.00%, 12/01/07-08/01/36, total market

 

 

 

 

 

 

value $14,222,880)

 

13,944,000

 

 

 

 

 

 

 

 

 

 

 

Total Short Term Investments – (identified cost $70,421,000)

 

70,421,000

 

 

 

 

 

Total Investments – (98.97%) – (identified cost $518,521,192) – (a)

 

775,612,801

 

 

 

 

Other Assets Less Liabilities– (1.03%)

 

8,064,460

 

 

 

 

Net Assets – (100.00%)

$

783,677,261

 

 

(a)    Aggregate cost for Federal Income Tax purposes is $520,043,827.  At September 30, 2006 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:

 

 

 

 

Unrealized appreciation

$

259,206,744

 

 

 

 

Unrealized depreciation

 

(3,637,770

)

 

 

 

Net unrealized appreciation

$

255,568,974

 

 

For information regarding the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual shareholder report.

 

 

 

 

 

**ITEM 2.  CONTROLS AND PROCEDURES**

 

 

(a)

The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective as of a date within 90 days of the filing date of this report.

 

 

(b)

There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls.

 

**ITEM 3.  EXHIBITS**

 

 

EX-99.CERT - Section 302 Certification

 

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.

 

DAVIS SERIES, INC.

 

By /s/ Kenneth C. Eich

Kenneth C. Eich

Principal Executive Officer

 

Date:  November 27, 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 /s/ Kenneth C. Eich

Kenneth C. Eich

Principal Executive Officer

 

Date:  November 27, 2006

 

By /s/ Douglas A. Haines

Douglas A. Haines

Principal Financial officer

 

Date:  November 27, 2006