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Form N-Q PRUDENTIAL SECTOR FUNDS, For: Feb 28

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April 25, 2018 5:24 PM EDT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:    811-03175
Exact name of registrant as specified in charter:    Prudential Sector Funds, Inc.
Address of principal executive offices:    655 Broad Street, 17th Floor,
   Newark, New Jersey 07102
Name and address of agent for service:    Deborah A. Docs
   655 Broad Street, 17th Floor,
   Newark, New Jersey 07102
Registrant’s telephone number, including area code:    973-367-7521
Date of fiscal year end:    11/30/2018
Date of reporting period:    2/28/2018

 

Item 1. Schedule of Investments

Prudential Jennison Financial Services Fund

Schedule of Investments

as of February 28, 2018 (unaudited)

 

                   Shares      Value  

LONG-TERM INVESTMENTS — 98.0%

            

COMMON STOCKS

            

Asset Management & Custody Banks — 6.8%

            

Affiliated Managers Group, Inc.

            22,766      $ 4,310,970  

OM Asset Management PLC

            87,356        1,339,168  

St. James’s Place PLC (United Kingdom)

            488,329        7,718,962  
           

 

 

  
              13,369,100  
           

 

 

  

Consumer Finance — 5.1%

            

Capital One Financial Corp.

            52,700        5,160,911  

SLM Corp.*

            438,104        4,779,715  
           

 

 

  
              9,940,626  
           

 

 

  

Data Processing & Outsourced Services — 21.0%

            

FleetCor Technologies, Inc.*

            67,700        13,535,261  

Mastercard, Inc. (Class A Stock)

            49,907        8,771,654  

PayPal Holdings, Inc.*

            60,039        4,767,697  

Square, Inc. (Class A Stock)*

            20,795        957,610  

Visa, Inc. (Class A Stock)

            65,500        8,052,570  

Wirecard AG (Germany)

            26,239        3,122,160  

Worldpay, Inc. (Class A Stock)*

            25,552        2,076,866  
           

 

 

  
              41,283,818  
           

 

 

  

Diversified Banks — 16.0%

            

Bank of America Corp.

            334,634        10,741,751  

Citigroup, Inc.

            135,440        10,224,366  

JPMorgan Chase & Co.

            90,344        10,434,732  
           

 

 

  
              31,400,849  
           

 

 

  

Internet Software & Services — 0.1%

            

Cardlytics, Inc.*

            12,248        222,791  
           

 

 

  

Investment Banking & Brokerage — 10.6%

            

Goldman Sachs Group, Inc. (The)

            29,400        7,730,142  

Lazard Ltd. (Class A Stock)

            33,323        1,798,442  

Moelis & Co. (Class A Stock)

            45,233        2,295,575  

Morgan Stanley

            73,000        4,089,460  

TD Ameritrade Holding Corp.

            83,081        4,777,157  
           

 

 

  
              20,690,776  
           

 

 

  

Life & Health Insurance — 4.4%

            

MetLife, Inc.

            188,498        8,706,723  
           

 

 

  

Mortgage REITs — 1.2%

            

Starwood Property Trust, Inc.

            119,600        2,421,900  
           

 

 

  

Property & Casualty Insurance — 4.3%

            

Chubb Ltd.

            58,957        8,367,177  
           

 

 

  

Regional Banks — 25.3%

            

BankUnited, Inc.

            102,732        4,131,881  

BB&T Corp.

            118,665        6,449,443  

Brookline Bancorp, Inc.

            217,136        3,441,605  

Eagle Bancorp, Inc.*

            97,195        5,933,755  

East West Bancorp, Inc.

            127,800        8,377,290  

Metro Bank PLC (United Kingdom)*

            75,603        4,095,279  

Pinnacle Financial Partners, Inc.

            117,223        7,566,745  

PNC Financial Services Group, Inc. (The)

            40,980        6,460,907  

Seacoast Banking Corp. of Florida*

            119,800        3,141,156  
           

 

 

  
                   49,598,061  
           

 

 

  

Reinsurance — 1.2%

            

RenaissanceRe Holdings Ltd. (Bermuda)

            18,038        2,313,915  
           

 

 

  

Thrifts & Mortgage Finance — 2.0%

            

Sterling Bancorp, Inc.

            284,969        3,989,566  
           

 

 

  

TOTAL LONG-TERM INVESTMENTS
(cost $162,257,046)

               192,305,302  
           

 

 

  

SHORT-TERM INVESTMENT — 2.2%

            

AFFILIATED MUTUAL FUND

            

Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund(w)

            4,281,584        4,281,584  
           

 

 

  

TOTAL INVESTMENTS — 100.2%
(cost $166,538,630)

               196,586,886  

Liabilities in excess of other assets — (0.2)%

               (393,394 ) 
           

 

 

  

NET ASSETS — 100.0%

             $     196,193,492  
           

 

 

  

 

See Glossary for abbreviations used in the quarterly schedule of portfolio holdings:

 

* Non-income producing security.
(w) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund.

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - unadjusted quoted prices generally in active markets for identical securities.

Level 2 - quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3 - unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of February 28, 2018 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

         

Common Stocks

         

Asset Management & Custody Banks

    $ 5,650,138      $ 7,718,962      $ —    

Consumer Finance

      9,940,626        —          —    

Data Processing & Outsourced Services

      38,161,658        3,122,160        —    

Diversified Banks

      31,400,849        —          —    

Internet Software & Services

      222,791        —          —    

Investment Banking & Brokerage

      20,690,776        —          —    

Life & Health Insurance

      8,706,723        —          —    

Mortgage REITs

      2,421,900        —          —    

Property & Casualty Insurance

      8,367,177        —          —    

Regional Banks

      45,502,782        4,095,279        —    

Reinsurance

      2,313,915        —          —    

Thrifts & Mortgage Finance

      3,989,566        —          —    

Affiliated Mutual Fund

      4,281,584        —          —    
  

 

 

     

 

 

     

 

 

  

Total

    $ 181,650,485      $ 14,936,401      $ —    
  

 

 

     

 

 

     

 

 

  

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Industry Classification:

 

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of February 28, 2018 were as follows:  

Regional Banks

     25.3 % 

Data Processing & Outsourced Services

     21.0  

Diversified Banks

     16.0  

Investment Banking & Brokerage

     10.6  

Asset Management & Custody Banks

     6.8  

Consumer Finance

     5.1  

Life & Health Insurance

     4.4  

Property & Casualty Insurance

     4.3  

Affiliated Mutual Funds

     2.2  

Thrifts & Mortgage Finance

     2.0  

Mortgage REITs

     1.2  

Reinsurance

     1.2  

Internet Software & Services

     0.1  
 

 

 

  
    100.2  

Liabilities in excess of other assets

     (0.2 ) 
 

 

 

  
    100.0 % 
 

 

 

  

Prudential Jennison Health Sciences Fund

Schedule of Investments

as of February 28, 2018 (unaudited)

 

                   Shares      Value  

LONG-TERM INVESTMENTS — 99.4%

            

COMMON STOCKS — 99.2%

            

Biotechnology — 50.4%

            

AbbVie, Inc.

            396,085      $ 45,878,525  

Aeglea BioTherapeutics, Inc.*

            602,772        4,370,097  

Agios Pharmaceuticals, Inc.*(a)

            124,493        10,007,992  

Aileron Therapeutics, Inc.*

            205,051        1,683,469  

Aimmune Therapeutics, Inc.*(a)

            291,205        9,464,162  

Alexion Pharmaceuticals, Inc.*

            423,297        49,716,233  

Amicus Therapeutics, Inc.*(a)

            3,473,903        47,800,905  

Apellis Pharmaceuticals, Inc.*(a)

            396,821        7,273,729  

Argenx SE (Netherlands), ADR*

            205,132        15,719,265  

ARMO BioSciences, Inc.*

            294,006        13,362,573  

Audentes Therapeutics, Inc.*(a)

            687,019        23,145,670  

Avexis, Inc.*

            143,931        17,808,583  

BioCryst Pharmaceuticals, Inc.*(a)

            2,202,138        10,944,626  

Biogen, Inc.*

            98,078        28,343,561  

BioMarin Pharmaceutical, Inc.*

            1,465,668        118,968,271  

Bluebird Bio, Inc.*(a)

            368,493        74,067,093  

Blueprint Medicines Corp.*(a)

            140,870        12,193,707  

Celgene Corp.*

            521,791        45,458,432  

Clovis Oncology, Inc.*

            468,017        27,177,747  

DBV Technologies SA (France), ADR*(a)

            787,292        16,816,557  

Eiger BioPharmaceuticals, Inc.*

            306,730        2,837,252  

Epizyme, Inc.*(a)

            1,410,186        24,960,292  

Exact Sciences Corp.*(a)

            672,737        30,010,798  

Exelixis, Inc.*

            1,917,566        49,473,203  

FibroGen, Inc.*(a)

            230,691        12,711,074  

Foundation Medicine, Inc.*

            95,117        7,870,932  

GlycoMimetics, Inc.*(a)

            1,106,962        25,471,196  

Immunomedics, Inc.*(a)

            1,355,747        22,925,682  

Incyte Corp.*

            446,335        38,009,889  

InflaRx NV (Germany)*(a)

            84,735        2,210,736  

La Jolla Pharmaceutical Co.*(a)

            730,984        22,704,363  

Madrigal Pharmaceuticals, Inc.*

            132,517        16,702,443  

Mirati Therapeutics, Inc.*(a)

            256,805        6,972,256  

Natera, Inc.*

            1,428,165        12,853,485  

Neurocrine Biosciences, Inc.*

            306,692        25,894,006  

Ovid Therapeutics, Inc.*

            380,730        2,509,011  

ProQR Therapeutics NV (Netherlands)*

            1,725,935        5,781,882  

Proteostasis Therapeutics, Inc.*(a)

            2,271,706        6,792,401  

Prothena Corp. PLC (Ireland)*(a)

            392,856        13,235,319  

Puma Biotechnology, Inc.*(a)

            140,782        9,200,104  

Regeneron Pharmaceuticals, Inc.*

            62,946        20,170,416  

Retrophin, Inc.*

            565,062        14,137,851  

Sage Therapeutics, Inc.*(a)

            549,523        88,671,031  

Sarepta Therapeutics, Inc.*(a)

            892,365        56,013,751  

Savara, Inc.*

            412,610        4,588,223  

Solid Biosciences, Inc.*

            122,799        3,561,171  

TESARO, Inc.*(a)

            256,004        14,139,101  

Vertex Pharmaceuticals, Inc.*

            257,492        42,751,397  
           

 

 

  
                 1,163,360,462  
           

 

 

  

Health Care Equipment — 7.0%

            

Abbott Laboratories

            401,473        24,220,866  

Boston Scientific Corp.*

            1,407,344        38,364,197  

DexCom, Inc.*(a)

            592,504        33,263,175  

Edwards Lifesciences Corp.*

            129,820        17,353,039  

IDEXX Laboratories, Inc.*

            40,055        7,499,498  

iRhythm Technologies, Inc.*

            71,707        4,456,590  

Nevro Corp.*

            434,814        35,272,112  
           

 

 

  
              160,429,477  
           

 

 

  

Health Care Supplies — 1.1%

            

Align Technology, Inc.*

            97,397        25,568,660  
           

 

 

  

Health Care Technology — 0.6%

            

Tabula Rasa HealthCare, Inc.*

            209,374        6,764,874  

Teladoc, Inc.*(a)

            204,357        8,194,716  
           

 

 

  
              14,959,590  
           

 

 

  

Life Sciences Tools & Services — 3.5%

            

Illumina, Inc.*

            334,250        76,215,685  

Quanterix Corp.*

            240,511        5,024,275  
           

 

 

  
              81,239,960  
           

 

 

  

Managed Health Care — 17.8%

            

Aetna, Inc.

            186,191        32,966,978  

Centene Corp.*

            477,180        48,395,596  

Cigna Corp.

            390,239        76,443,918  

Humana, Inc.

            339,466        92,273,648  

UnitedHealth Group, Inc.

            705,778        159,618,752  
           

 

 

  
              409,698,892  
           

 

 

  

Pharmaceuticals — 18.8%

            

Aerie Pharmaceuticals, Inc.*

            927,466        47,439,886  

Allergan PLC

            434,319        66,980,676  

Assembly Biosciences, Inc.*

            1,579,048        89,595,184  

Bristol-Myers Squibb Co.

            1,203,561        79,675,738  

Cassiopea SpA (Italy)*

            67,672        2,738,722  

Cassiopea SpA (Italy), 144A*

            230,363        9,322,913  

Dermira, Inc.*(a)

            283,514        7,289,145  

Eli Lilly & Co.

            301,618        23,230,618  

GW Pharmaceuticals PLC (United Kingdom), ADR*(a)

            272,483        30,964,968  

Marinus Pharmaceuticals, Inc.*

            846,082        4,357,322  

Mylan NV*

            301,080        12,139,546  

Nektar Therapeutics*

            238,184        20,617,207  

Ocular Therapeutix, Inc.*(a)

            1,431,743        7,488,016  

Pacira Pharmaceuticals, Inc.*

            313,669        9,817,840  

resTORbio, Inc.*

            440,933        8,598,193  

Revance Therapeutics, Inc.*(a)

            454,424        14,064,423  
           

 

 

  
              434,320,397  
           

 

 

  

TOTAL COMMON STOCKS
(cost $1,359,416,275)

               2,289,577,438  
           

 

 

  

PREFERRED STOCK — 0.2%

            

Health Care Equipment

            

ControlRad Systems, Inc., Private Placement, Reg D, Series A
(original cost $2,400,000; purchased 8/31/12)*(f)^

            4,084,064        3,471,454  
           

 

 

  

TOTAL LONG-TERM INVESTMENTS
(cost $1,361,816,275)

                  2,293,048,892  
           

 

 

  

SHORT-TERM INVESTMENTS — 16.1%

            

AFFILIATED MUTUAL FUNDS

            

Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund(w)

 

      13,255,612        13,255,612  

Prudential Investment Portfolios 2 — Prudential Institutional Money Market Fund
(cost $358,780,055; includes $358,329,121 of cash collateral for securities on
loan)(b)(w)

 

      358,780,851        358,780,851  
           

 

 

  

TOTAL SHORT-TERM INVESTMENTS
(cost $372,035,667)

               372,036,463  
           

 

 

  

TOTAL INVESTMENTS — 115.5%
(cost $1,733,851,942)

               2,665,085,355  

Liabilities in excess of other assets — (15.5)%

               (357,833,739 ) 
           

 

 

  

NET ASSETS — 100.0%

             $ 2,307,251,616  
           

 

 

  

 

See the Glossary for abbreviations used in the quarterly schedule of portfolio holdings:

 

* Non-income producing security.
^ Indicates a Level 3 security. The aggregate value of Level 3 securities is $3,471,454 and 0.2% of net assets.
(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $342,817,101; cash collateral of $358,329,121 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.
(b) Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment.
(f) Indicates a restricted security; the aggregate original cost of the restricted securities is $2,400,000. The aggregate value of $3,471,454 is approximately 0.2% of net assets.
(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund and Prudential Institutional Money Market Fund.

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - unadjusted quoted prices generally in active markets for identical securities.

Level 2 - quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3 - unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of February 28, 2018 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

         

Common Stocks

         

Biotechnology

    $ 1,163,360,462      $ —        $ —    

Health Care Equipment

      160,429,477        —          —    

Health Care Supplies

      25,568,660        —          —    

Health Care Technology

      14,959,590        —          —    

Life Sciences Tools & Services

      81,239,960        —          —    

Managed Health Care

      409,698,892        —          —    

Pharmaceuticals

      422,258,762        12,061,635        —    

Preferred Stock

         

Health Care Equipment

      —          —          3,471,454  

Affiliated Mutual Funds

      372,036,463        —          —    
  

 

 

     

 

 

     

 

 

  

Total

    $ 2,649,552,266      $ 12,061,635      $ 3,471,454  
  

 

 

     

 

 

     

 

 

  

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Prudential Jennison Utility Fund

Schedule of Investments

as of February 28, 2018 (unaudited)

 

                   Shares      Value  

LONG-TERM INVESTMENTS — 98.6%

            

COMMON STOCKS

            

Cable & Satellite — 1.5%

            

Charter Communications, Inc. (Class A Stock)*

            124,915      $ 42,712,186  
           

 

 

  

Diversified Banks — 1.0%

            

CFE Capital S de RL de CV (Mexico)*

            5,610,396        5,869,135  

CFE Capital S de RL de CV (Mexico), 144A*

            22,099,195        23,118,361  
           

 

 

  
              28,987,496  
           

 

 

  

Electric Utilities — 37.2%

            

Alliant Energy Corp.

            1,978,265        76,459,942  

Alupar Investimento SA (Brazil)

            514,135        2,878,738  

Alupar Investimento SA (Brazil), 144A

            2,444,818        13,688,993  

American Electric Power Co., Inc.

            2,016,356        132,232,626  

Avangrid, Inc.

            817,523        39,666,216  

El Paso Electric Co.

            436,094        21,194,168  

Emera, Inc. (Canada)

            870,658        28,096,904  

Enel SpA (Italy)

            13,826,334        80,258,844  

Entergy Corp.

            204,919        15,536,959  

Exelon Corp.

            3,706,801        137,299,909  

FirstEnergy Corp.

            1,358,938        43,934,466  

Fortis, Inc. (Canada)

            900,532        29,425,894  

Great Plains Energy, Inc.

            3,004,564        87,583,041  

Iberdrola SA (Spain)

            1,996,254        14,691,116  

NextEra Energy, Inc.

            1,122,543        170,794,918  

Pinnacle West Capital Corp.

            766,163        58,963,904  

PPL Corp.

            1,311,197        37,565,794  

Southern Co. (The)

            686,775        29,572,532  

Xcel Energy, Inc.

            1,732,966        75,002,768  
           

 

 

  
                 1,094,847,732  
           

 

 

  

Gas Utilities — 4.4%

            

Atmos Energy Corp.

            982,687        79,096,477  

Infraestructura Energetica Nova SAB de CV (Mexico), 144A

            2,815,921        13,294,872  

Italgas SpA (Italy)

            7,029,145        37,665,710  
           

 

 

  
              130,057,059  
           

 

 

  

Independent Power Producers & Energy Traders — 3.9%

            

NRG Energy, Inc.

            3,653,858        94,488,768  

NRG Yield, Inc. (Class C Stock)

            1,296,045        20,283,104  
           

 

 

  
              114,771,872  
           

 

 

  

Multi-Utilities — 21.9%

            

Ameren Corp.

            1,814,430        98,523,549  

CMS Energy Corp.

            2,760,367        117,177,579  

Dominion Energy, Inc.

            759,077        56,224,833  

DTE Energy Co.

            1,344,914        135,540,433  

NiSource, Inc.

            3,248,775        75,144,166  

Public Service Enterprise Group, Inc.

            1,271,875        61,596,906  

Sempra Energy(a)

            902,971        98,405,780  
           

 

 

  
              642,613,246  
           

 

 

  

Oil & Gas Storage & Transportation — 14.5%

            

Cheniere Energy, Inc.*

            842,515        44,248,888  

Cheniere Energy Partners LP Holdings LLC

            2,496,502        67,130,939  

EQT GP Holdings LP

            620,919        14,635,061  

ONEOK, Inc.

            799,654        45,044,510  

Pembina Pipeline Corp. (Canada)

            1,350,801        43,401,236  

Targa Resources Corp.

            969,664        43,295,498  

TransCanada Corp. (Canada)

            1,622,323        70,167,492  

Williams Cos., Inc. (The)

            3,569,436        99,087,543  
           

 

 

  
              427,011,167  
           

 

 

  

Renewable Electricity — 2.3%

            

NextEra Energy Partners LP

            1,744,077        68,437,581  
           

 

 

  

Specialized REITs — 8.8%

            

American Tower Corp.

            582,500        81,159,725  

CyrusOne, Inc.

            1,033,228        51,558,077  

Equinix, Inc.

            142,364        55,820,924  

SBA Communications Corp.*

            442,639        69,613,836  
           

 

 

  
              258,152,562  
           

 

 

  

Water Utilities — 3.1%

            

American Water Works Co., Inc.

            1,147,629        91,075,837  
           

 

 

  

TOTAL LONG-TERM INVESTMENTS
(cost $2,233,323,864)

               2,898,666,738  
           

 

 

  

SHORT-TERM INVESTMENTS — 2.6%

            

AFFILIATED MUTUAL FUNDS

            

Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund(w)

 

         28,125,063        28,125,063  

Prudential Investment Portfolios 2 — Prudential Institutional Money Market Fund
(cost $48,382,370; includes $48,285,838 of cash collateral for securities on
loan)(b)(w)

 

      48,382,370        48,382,370  
           

 

 

  

TOTAL SHORT-TERM INVESTMENTS
(cost $76,507,433)

               76,507,433  
           

 

 

  

TOTAL INVESTMENTS — 101.2%
(cost $2,309,831,297)

               2,975,174,171  

Liabilities in excess of other assets — (1.2)%

               (34,515,534 ) 
           

 

 

  

NET ASSETS — 100.0%

             $ 2,940,658,637  
           

 

 

  

 

See the Glossary for abbreviations used in the quarterly schedule of portfolio holdings:

 

* Non-income producing security.
(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $46,588,950; cash collateral of $48,285,838 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.
(b) Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment.
(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Ultra Short Bond Fund and Prudential Institutional Money Market Fund.

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - unadjusted quoted prices generally in active markets for identical securities.

Level 2 - quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3 - unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of February 28, 2018 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

         

Common Stocks

         

Cable & Satellite

    $ 42,712,186      $ —        $ —    

Diversified Banks

      5,869,135        23,118,361        —    

Electric Utilities

      986,208,779        108,638,953        —    

Gas Utilities

      79,096,477        50,960,582        —    

Independent Power Producers & Energy Traders

      114,771,872        —          —    

Multi-Utilities

      642,613,246        —          —    

Oil & Gas Storage & Transportation

      427,011,167        —          —    

Renewable Electricity

      68,437,581        —          —    

Specialized REITs

      258,152,562        —          —    

Water Utilities

      91,075,837        —          —    

Affiliated Mutual Funds

      76,507,433        —          —    
  

 

 

     

 

 

     

 

 

  

Total

    $ 2,792,456,275      $ 182,717,896      $ —    
  

 

 

     

 

 

     

 

 

  

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Glossary:

The following abbreviations are used in the quarterly schedule of portfolio holdings:

 

144A    Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
ADR    American Depositary Receipt
LIBOR    London Interbank Offered Rate
REIT(s)    Real Estate Investment Trust(s)
Reg D    Security was purchased pursuant to Regulation D under the Securities Act of 1933, providing exemption from the registration requirements. Unless otherwise noted, Regulation D securities are deemed to be Liquid.

Notes to Schedules of Investments (unaudited)

Securities Valuation: Each Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Funds to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.

Various inputs determine how each Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.

Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

Each Fund may invest up to 15% of its net assets in illiquid securities, including those that are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above.

Each Fund may invest their overnight sweep cash in the Prudential Core Ultra Short Bond Fund and their securities lending cash collateral in the Prudential Institutional Money Market Fund, each a series of the Prudential Investment Portfolios 2, registered under the Investment Company Act of 1940, as amended, and managed by PGIM Investments.

Other information regarding the Funds is available in each Funds’ most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov)

Item 2. Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 3. Exhibits

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – Attached hereto.

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.

(Registrant) Prudential Sector Funds, Inc.

 

By (Signature and Title)*

     

/s/ Deborah A. Docs

    

Deborah A. Docs

    

Secretary of the Fund

Date     April 18, 2018

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/ Stuart S. Parker

    

Stuart S. Parker

    

President and Principal Executive Officer

Date     April 18, 2018

 

By (Signature and Title)*

     

/s/ M. Sadiq Peshimam

    

M. Sadiq Peshimam

    

Treasurer and Principal Financial and Accounting Officer

Date     April 18, 2018

 

* Print the name and title of each signing officer under his or her signature.

CERTIFICATIONS

I, Stuart S. Parker, certify that:

 

1. I have reviewed this report on Form N-Q of Prudential Sector Funds, Inc.;

 

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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (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: April 18, 2018      /s/ Stuart S. Parker
       Stuart S. Parker
       President and Principal
       Executive Officer

CERTIFICATIONS

I, M. Sadiq Peshimam, certify that:

 

1. I have reviewed this report on Form N-Q of Prudential Sector Funds, Inc.;

 

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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (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: April 18, 2018      /s/ M. Sadiq Peshimam
       M. Sadiq Peshimam
       Treasurer and Principal
       Financial and Accounting Officer

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