<PAGE>
THE GABELLI VALUE FUND INC.
One Corporate Center
Rye, New York 10580-1434
FIRST QUARTER REPORT
MARCH 31, 1996
TO OUR SHAREHOLDERS:
In the first quarter of 1996, the stock market shrugged off an economy
mired in snow, the GM strike, the ongoing budget stalemate in Washington and
rising long-term interest rates to post a solid advance. Flow of funds into
mutual funds and continued merger activity at record levels provided the fuel
for an ebullient U.S. stock market. Markets around the world marched in step.
<TABLE>
INVESTMENT RESULTS(a)
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
QUARTER
------------------------------------------
1ST 2ND 3RD 4TH YEAR
--- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C>
1996: Net Asset Value ...................... $12.88 -- -- -- --
Total Return ......................... 10.9% -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
1995: Net Asset Value ...................... $11.41 $11.75 $12.81 $11.61 $11.61
Total Return ......................... 8.8% 3.0% 9.0% 0.3% 22.5%
- -----------------------------------------------------------------------------------------------------------------
1994: Net Asset Value ...................... $11.37 $11.55 $12.43 $10.49 $10.49
Total Return ......................... (6.0)% 1.6% 7.6% (2.7)% 0.0%
- -----------------------------------------------------------------------------------------------------------------
1993: Net Asset Value ...................... $11.15 $11.93 $13.92 $12.09 $12.09
Total Return ......................... 10.1% 7.0% 16.7% 1.5% 39.4%
- -----------------------------------------------------------------------------------------------------------------
1992: Net Asset Value ...................... $10.40 $ 9.84 $10.04 $10.13 $10.13
Total Return ......................... 9.7% (5.4)% 2.0% 6.4% 12.7%
- -----------------------------------------------------------------------------------------------------------------
1991: Net Asset Value ...................... $ 9.51 $ 9.50 $ 9.57 $ 9.48 $ 9.48
Total Return ......................... 11.8% (0.1)% 0.7% 2.5% 15.3%
- -----------------------------------------------------------------------------------------------------------------
1990: Net Asset Value ...................... $ 9.23 $ 9.36 $ 8.19 $ 8.51 $ 8.51
Total Return ......................... (2.4)% 1.4% (12.5)% 9.0% (5.6)%
- -----------------------------------------------------------------------------------------------------------------
1989: Net Asset Value ...................... -- -- -- $ 9.58 $ 9.58
Total Return ......................... -- -- -- 2.1%(b) 2.1%(b)
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS MARCH 31, 1996(a) Dividend History
- ---------------------------------------- ----------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
1 Year .......................... 24.9% ----------------- -------------- ------------------
.......................... 18.1%(c) December 27, 1995 $1.230 $11.56
5 Year .......................... 17.1% December 30, 1994 $1.600 $10.49
.......................... 15.8%(c) December 31, 1993 $2.036 $12.09
Life of Fund (b) ................ 14.2% December 31, 1992 $0.553 $10.13
.......................... 13.2%(c) December 31, 1991 $0.334 $ 9.48
December 31, 1990 $0.420 $ 8.51
March 19, 1990 $0.120 $ 9.21
December 29, 1989 $0.0678 $ 9.58
<FN>
(a) Total returns and average annual returns reflect changes in share price and reinvestment of dividends and
are net of expenses. The net asset value of the Fund is reduced on the ex-dividend (payment) date by the amount
of the dividend paid. Of course, returns represent past performance and do not guarantee future results.
Investment returns and the principal value of an investment will fluctuate. When shares are redeemed they may
be worth more or less than their original cost. (b) From commencement of operations on September 29, 1989.
(c) Includes the effect of the maximum 5.5% sales charge at beginning of period.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INVESTMENT PERFORMANCE
For the three months ended March 31, 1996, The Gabelli Value Fund's (the
"Fund") net asset value increased 10.9%. This compares favorably to gains of
5.4% for the unmanaged Standard & Poor's 500 Index (S&P 500), and 5.8% and 5.1%,
respectively, for the Value Line Composite and Russell 2000 Index, each of which
are unmanaged indicators of stock market performance. For the twelve months
ended March 31, 1996, the Value Fund gained 24.9% including reinvested dividends
versus 32.1% for the S&P 500, 25.0% for the Value Line Composite and 29.1% for
the Russell 2000 Index.
The Fund's total return since inception on September 29, 1989, through
March 31, 1996, was 137.3%, which reflects an average annual total return of
14.2% assuming reinvestment of all dividends and distributions. The Fund's
three- and five-year average annual returns through March 31, 1996, were 19.8%
and 17.1%, respectively. This compares with average annual returns of 15.7% and
14.7% for the S&P 500 during the respective periods. On March 31, 1996, the
Fund's shareholder base was 36,201 and total net assets were $511.5 million.
COMMENTARY
THE ECONOMY AND THE STOCK MARKET
In our year-end 1995 letter, we opined that modest economic growth, decent
corporate profits, low inflation, and higher long-term interest rates would add
up to a "decent, but much less inspiring stock market". With the exception of
the more than decent gains in equities in the first quarter, our scenario
appears to be on track. February's strong job report, while offset by weaker
than expected retail sales, still pointed to an economy that is moving forward
at a sustainable pace. Corporate profits are good, if not great, and overall
inflation remains subdued despite an anticipated (by us) increase in food and
fuel prices.
Is this backdrop likely to continue? In the second half of 1996, the
effects of an election year will provide positive psychological underpinnings to
the consumer as candidates for both political parties paint a rosy picture for
the future of the U.S. But we believe the kindling inflationary pressure on the
economy will become more evident. Higher prices for agricultural commodities,
notably food crops and feed grains, along with the spike in fuel prices added to
spot shortages in other industrial commodities point to inflation in the 3.5%
range. Long-term interest rates are adjusting to this, ultimately putting
pressure on equities multiples. As October 1987 taught us, stocks can only
advance so far into a headwind of rising long-term interest rates.
FINALLY, A TELECOMMUNICATIONS BILL
The long awaited, comprehensive telecommunications bill is finally a
reality. While it is not quite the detailed architectural drawing investors
might have preferred, it is a reasonably good blueprint of the
telecommunications/media industry of tomorrow. While Wall Street is still
sorting out all of the ramifications of the bill, industry participants have
been quick to respond. US WEST Media Group's (UMG - $20.625 - NYSE) ten billion
dollar acquisition of closely held Continental Cablevision underscores
2
<PAGE>
the viability of extending telephone franchises via cable telephony. That's
probably good news for other cable television operators like Cablevision Systems
Corporation (CVC - $57.50 - ASE), and Time Warner Inc. (TWX - $40.875 - NYSE).
AT&T Corp.'s (T - $61.25 - NYSE) second break-up foreshadows head-to-head
competition with Regional Bell Operating Companies (RBOCs) in the local loop. It
also gives investors the opportunity to take advantage of a great fundamental
bargain in the form of Lucent Technologies, AT&T's telecommunications equipment
business being spun-off to shareholders. We believe a combination of RBOCs,
NYNEX Corporation (NYN - $49.875 - NYSE) and Bell Atlantic Corp. (BEL - $62.125
- - NYSE) being the most likely, will be a "back door" entry into long distance.
With television broadcast company "footprints" being enlarged from 25% to 35% as
part of the Telecommunications Bill, we expect merger and acquisition activity
to accelerate. We like the prospective buyers (Westinghouse Electric Corp. (WX -
$19.25 - NYSE)) and sellers (Liberty Corporation (LC - $33.00 - NYSE) and LIN
Television Corporation (LNTV - $35.25 - NASDAQ)) in that industry.
SEE THE WORLD
The rejuvenation of American industry, spawned by declining cost of capital
and enormous productivity gains, and the victory of global capitalism,
symbolized best by the crumbling of the Berlin Wall, are the catalysts that
positioned us to conquer new international economic frontiers. With free market
economies evolving in China and Eastern Europe, and rapidly expanding middle
classes in developing nations in Latin America and the Pacific Rim, there will
be 2.5 to 3 billion new consumers by the turn of the century. How are these new
consumers going to spend their money? If the past is a prologue to the future --
and we can learn something by looking back at the economic evolution of the
great American middle-class -- they will: upgrade or, perhaps more accurately,
diversify their diets; buy communications services, if made available; spend
money on entertainment; and travel. American companies will be instrumental in
satisfying the needs and wants of this emerging international middle-class.
Let's start in agriculturally state-of-the-art Iowa. The American grain
farmer is the most productive in the world. If chicken and pork consumption in
China were to increase by one ounce per capita, and Iowa were to provide all the
grain used to fatten these Chinese chickens and hogs, on a gross national
product basis, it would rank among the richest countries in the world. This
hypothetical statistical analogy calls attention to the tremendous upside
potential for the American grain farmer and vendors to the farmer. Agricultural
equipment manufacturers like Deere & Company (DE - $41.75 - NYSE) should profit
handsomely as the American farmer helps put more food on tables across the
globe.
What else will these new consumers spring for? Telephone calls to friends
and family. To compete on the global economic stage and to attract foreign
capital, developing countries need modern telecommunications systems. Who will
build and service them? AT&T and Northern Telecom Limited (NT - $47.75 - NYSE)
will play a big role in wiring the world. AirTouch Communications Inc. (ATI -
$31.125 - NYSE), which has done a terrific job winning joint venture cellular
telephone franchises on technical merit through out Europe, will expand into the
Pacific Rim and Latin America. Motorola, Inc. (MOT - $53.00 - NYSE) will build
millions of handsets for new international wireless customers.
3
<PAGE>
There is simply no place you can go in the world without American filmed
entertainment being a theatrical, cable television and broadcast staple. The
same goes for American music. As distribution channels for entertainment
software products expand both here (via the convergence of the computer,
telephone, and cable television industries) and overseas (the number of
satellite dishes in India has gone from 400,000 to 15 million in the last five
years), the value of entertainment software will continue to increase. Who wins?
Time Warner, Viacom Inc. (VIA - $41.00 - ASE, VIA'B - $42.125 - ASE), Seagram
Company Ltd. (VO - $32.375 - NYSE) (the new owner of MCA), and
Tele-Communications, Inc./Liberty Media Group (LBTYA - $26.375 - NASDAQ)
(Tele-Communications, Inc.'s (TCOMA - $18.5625 - NASDAQ) collection of
entertainment software and cable network investments).
WHAT WE DO
We do what is described as bottom up research: we read annual reports; we
visit the competition; we talk to customers; we go belly to belly with
management. We structure our portfolio by picking stocks.
In past reports, we have tried to articulate our investment philosophy and
methodology. The following graphic further illustrates the interplay among the
four components of our valuation approach.
[Triangle-shaped Diagram: "Research" is at base of the triangle. "Cash Flow" is
above the base. "Management" is above "cash flow". The left side of the triangle
is "EPS". The right side of the triangle is "PMV".]
Our focus is on free cash flow; earnings before interest, taxes,
depreciation and amortization (EBITDA) minus the capital expenditures necessary
to grow the business. We believe free cash flow is the best barometer of a
business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at earnings per share trends. Unlike Wall Street's
ubiquitous earnings momentum players, we do not try to forecast earnings with
accounting precision and then trade stocks based on quarterly expectations and
realities. We simply try to position ourselves in front of long-term earnings
uptrends. In addition, we analyze on and off balance sheet assets and
liabilities such as plant and equipment, inventories, receivables, and legal,
environmental and health care issues. We want to know everything and anything
that will add to or detract from our private market value (PMV) estimates.
Finally, we look for a catalyst; something happening in the company's industry
or indigenous to the company itself that will surface value. In the case of the
independent telephone stocks, the catalyst is a regulatory change. In the
agricultural equipment business, it is the increasing worldwide demand for
American food and feed crops. In other instances, it may be a change in
management, sale or spin-off of a division or the development of a profitable
new business.
Once we identify stocks that qualify as fundamental and conceptual
bargains, we then become patient investors. This has been a proven long-term
method for preserving and enhancing wealth in the U.S. equities market. At the
margin, our new investments are focused on businesses that are well managed and
will benefit from sustainable long-term economic dynamics. These include macro
trends, such as globalization of the market in filmed entertainment and
telecommunications, and micro trends, such as increased focus on productivity
enhancing goods and services.
4
<PAGE>
OUR APPROACH
The Fund is a non-diversified mutual fund which invests in a concentrated
portfolio of equity securities believed to have favorable EBITDA prospects. This
strategy allows the Fund to make larger commitments, in industries or companies
which we believe offer dynamic growth opportunities, than are possible with a
more diversified portfolio. Consistent with this approach, the top ten holdings
of the Fund represented over 48% of the portfolio at March 31, 1996.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into higher
stock prices, but they do express a positive trend which we believe will develop
over time.
American Express Company (AXP - $49.375 - NYSE), founded in 1850, is a
diversified travel and financial services company operating in 160 countries
around the world. The company is best known for its American Express charge card
and travel-related services. Another important operation is Minneapolis-based
American Express Financial Advisors, Inc. (formerly IDS Financial Services)
which sells financial products ranging from mutual funds to annuities. Harvey
Golub, Chairman and CEO, has refocused AXP on its core "green" charge card and
investment management businesses. The company has significantly expanded the
range of merchants who welcome its cards. Management's objective is virtual
parity with bankcard networks. An electronic interactive service was introduced
last year that enables cardmembers to make travel arrangements, check the status
of their accounts, pay their bills and purchase catalogue merchandise. We
believe the company has been repositioned to enjoy double-digit earnings growth
over the balance of this decade.
Chris-craft Industries, Inc. (CCN - $41.75 - NYSE), through its 74% ownership of
BHC Communications, Inc. is primarily a television broadcaster. BHC owns and
operates independent TV stations in Los Angeles (KCOP) and Portland (KPTV). BHC
also controls over 50% of United Television, Inc., which operates an NBC
affiliate, an ABC affiliate and three independent stations. BHC has entered into
a partnership agreement with Paramount Communications, Inc. to launch a new
fifth television network called United Paramount Television Network (UPN). CCN,
with over $1.5 billion in cash and marketable securities, is strongly positioned
to expand its operations. CCN is the eighth-largest TVstation group owner in the
U.S. and covers almost 20% of TV households.
[Diagram: "United Television" is in the bottom rectangle. "56%" is between the
bottom and middle rectangles. "BHC Communications" is in the middle rectangle.
"74%" is between the middle and top rectangles. "Chris-Craft Industries is in
the top rectangle.
Century Telephone Enterprises, Inc. (CTL - $31.75 - NYSE) is a way
to play the migration trend to rural America. Through acquisitions, the company
has created clusters of rural telephone and cellular companies within commuting
distance of metropolitan areas in 14 states including Wisconsin, Louisiana,
Michigan, Ohio and Arkansas. These systems have characteristically provided
growth in excess of the
5
<PAGE>
industry average. Our expectations for a less aggressive approach towards
acquisitions resulting from its existing strong geographic positioning should
facilitate earnings growth, which we target at 15% to 18%. In the past, growth
has consistently outperformed acquisition related earnings dilution.
General Electric Company (GE - $77.875 - NYSE), having an equity market
valuation of $130 billion, is the largest U.S. company. Earlier this year, GE
passed Nippon Telegraph & Telephone Corporation to become the world's largest
industrial company as well. Operating segments include aircraft engines,
appliances, broadcasting (NBC), industrial products, plastic materials, power
generating turbines and a hugely successful financial services business. Under
Jack Welch's prodding, GE has recorded a series of impressive earnings gains
which are anticipated to continue into the next century.
Grupo Televisa S.A. (TV - $24.875 - NYSE) is a Mexican-based entertainment
company that dominates the Spanish speaking world through its fully integrated
mix of content and distribution. The stock has been hurt in line with the
Mexican market and economy, but nevertheless, remains the best vehicl e for
accessing the growth of disposable income among the Spanish speaking population
on a global basis. The business mix includes film, music, cable television, and
broadcasting. The market is ignoring its holdings in PamAmSat Corporation (SPOT
- - $30.50 - NASDAQ) and Univision.
Hilton Hotels Corporation (HLT - $94.00 - NYSE) is a major lodging and gaming
company. Throughout the United States, Hilton owns and manages approximately 23
hotels, manages 40 hotels owned by others and franchises the Hilton name to
hotel operators for 160 properties. Hilton's hotels include the Waldorf-As toria
(New York) (owned), the Beverly Hilton (Los Angeles) (franchise), the Chicago
Hilton (franchise) and a 50% interest in Hilton Hawaiian Village. HLT's
international hotel business is operated under the Conrad name. (Hotels bearing
the "Hilton" name outside the U.S. are properties of the British company
Ladbroke Group, PLC.) HLT operates gaming properties, primarily in Nevada,
including the Flamingo and the Las Vegas Hilton, two casino-hotels in Reno and
one in Laughlin. HLT's Nevada properties have over 11,000 rooms and 364,000
square feet of gaming space. Steve Bollenbach's joining the company has sparked
renewed interest in HLT as an emerging global growth company.
Media General, Inc. (MEG'A - $38.75 - ASE) (our largest holding, representing
16.5% of net assets) is a Richmond, VA-based company, publishing daily
newspapers in Tampa, Winston-Salem and throughout Virginia. Media General owns
three network television stations in Tampa, Charleston, and Jacksonville and a
cable television franchise in Fairfax County, VA. The relaxation of broadcast
station ownership restrictions provided by the Telecommunications Act of 1996 is
driving industry consolidation and is increasing the franchise values of strong,
well-positioned media properties such as those owned by Media General.
Tele-Communications, Inc. (TCOMA - $18.5625 - NASDAQ), the largest cable TV
operator in the U.S., serving about 14 million subscribers, is guided by Dr.
John C. Malone - one of the most shareholder sensitive managers we have found.
Given that regulation has historically played a major role in the valuation of
cable properties, we believe that the recent passage of the Telecommunications
Act of 1996, combined with the current deregulatory climate in Congress, could
prove to be a significant catalyst for cable stocks. Strategically, TCOMA is a
well-positioned industry leader, from its telephony joint-venture
6
<PAGE>
with Sprint to its innovative Internet access business, dubbed @ Home, to its
80% ownership of Tele-Communications International.
Time Warner Inc. (TWX - $40.875 - NYSE), in a bold and brilliant tactic,
announced that it will acquire Turner Broadcasting Systems, Inc. for $7.5
billion. The acquisition would make TWX the largest diversified media and
publishing company in the world, adding a wealth of programming to a company
already rich in entertainment content. Time Warner is restructuring into two
general areas: copyright and creativity, which includes publishing, music and
filmed entertainment, and distribution, which is mostly cable. Under the aegis
of Gerald M. Levin, investors can expect significant returns over the rest of
the decade.
Westinghouse Electric Corp. (WX - $19.25 - NYSE) is a multi-industry company
whose dominant focus for growth and investment is now broadcasting. The company
acquired CBS Inc. for $5.4 billion, creating the nation's largest television and
radio broadcaster. Since the acquisition, management has paid down over $4
billion in debt through asset sales, primarily of its defense electronics and
office furnishing units. The remaining industrial portfolio includes Power
Systems, Thermo King Refrigeration Unit, Government Systems, and assorted
electronics-related businesses.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment is $1,000. No initial minimum is
required for those establishing an Automatic Investment Plan.
GABELLI U.S. TREASURY MONEY MARKET FUND
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides checkwriting and exchange privileges. The Fund's expenses are
capped at .30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local income taxes in all states, the Fund is an excellent vehicle in which to
store idle cash. An investment in The Gabelli U.S. Treasury Money Market Fund is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Fund will maintain a stable $1 per share net asset value. Call us at
1-800-GABELLI (1-800-422-3554) for a prospectus which gives a more complete
description of the Fund, including management fees and expenses. Read it
carefully before you invest or send money.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us e-mail at [email protected].
7
<PAGE>
IN CONCLUSION
As investors entrusted with preserving and enhancing the value of your
assets, we react with mixed emotions to rapidly rising equities markets. While
we enjoy the tailwind provided by investor euphoria, we worry about what will
happen when the party winds down. Sooner or later, however, this historic bull
market will loose steam, either with a real correction/bear market, or more
likely and preferably, an extended period of returns in line with earnings
gains. In a more historical market environment, our conservative value oriented
approach to equities investing should demonstrate its virtues on an absolute and
relative basis.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's NASDAQ symbol is GABVX. Please call us during the
day for further information.
We thank you for your confidence in our investing abilities and wish you a
productive and financially rewarding 1996.
Sincerely,
/s/ Mario J. Gabelli
------------------------
MARIO J. GABELLI, CFA
President and
Chief Investment Officer
April 19, 1996
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
MARCH 31, 1996
--------------
Media General, Inc. Hilton Hotels Corporation
Chris-Craft Industries, Inc. Tele-Communications, Inc.
Time Warner Inc. Westinghouse Electric Corp.
General Electric Company American Express Company
Grupo Televisa S.A. Century Telephone Enterprises, Inc.
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio
manager only through the end of the period of this report as stated on the
cover. The manager's views are subject to change at any time based on market
and other conditions.
8
<PAGE>
THE GABELLI VALUE FUND INC.
PORTFOLIO OF INVESTMENTS -- MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ ------------
<C> <S> <C>
COMMON STOCKS--93.4%
PUBLISHING--18.6%
38,000 McGraw-Hill Companies, Inc. ...... $ 3,296,500
2,180,000 Media General, Inc., Class A...... 84,475,000
120,000 Meredith Corporation.............. 4,950,000
240,000 Western Publishing Group,
Inc. +.......................... 2,370,000
------------
95,091,500
------------
BROADCASTING--14.7%
511,837 Chris-Craft Industries, Inc. ..... 21,369,195
758,000 Grupo Televisa S.A., GDR +........ 18,855,250
110,000 Liberty Corporation............... 3,630,000
66,100 LIN Television Corporation +...... 2,330,025
100,000 Turner Broadcasting System, Inc.,
Class A......................... 2,712,500
103,000 United Television, Inc. .......... 9,141,250
900,000 Westinghouse Electric Corp. ...... 17,325,000
------------
75,363,220
------------
CONSUMER PRODUCTS--11.1%
110,000 American Brands, Inc. ............ 4,661,250
300,000 Carter-Wallace, Inc. ............. 4,912,500
74,000 Culbro Corporation +.............. 4,541,750
265,000 General Electric Company.......... 20,636,875
145,000 Ralston Purina Group.............. 9,696,875
100,000 Syratech Corporation +............ 2,575,000
24,000 Tambrands Inc. ................... 1,122,000
350,000 Whitman Corporation............... 8,487,500
------------
56,633,750
------------
CABLE--8.7%
170,000 Cablevision Systems Corporation,
Class A +....................... 9,775,000
80,000 General Instrument
Corporation +................... 2,190,000
280,000 Home Shopping Network, Inc. +..... 2,835,000
230,000 International Family
Entertainment, Inc., Class
B +............................. 3,881,250
960,000 Tele-Communications, Inc., Class
A +............................. 17,820,000
300,000 Tele-Communications, Inc./Liberty
Media Group, Class A +.......... 7,912,500
------------
44,413,750
------------
ENTERTAINMENT--5.8%
520,000 Time Warner Inc. ................. 21,255,000
200,000 Viacom Inc., Class A +............ 8,200,000
------------
29,455,000
------------
INDUSTRIAL EQUIPMENT AND SUPPLIES--5.3%
50,000 AMP Incorporated.................. 2,068,750
50,000 Ampco-Pittsburgh Corporation...... 650,000
28,000 AptarGroup, Inc. ................. 1,162,000
18,400 Brad Ragan, Inc. +................ 634,800
46,000 Deere & Company................... 1,920,500
140,000 Gerber Scientific, Inc. .......... 2,100,000
70,000 Ingersoll-Rand Company............ 2,852,500
MARKET
SHARES VALUE(C)
- ------------ ------------
150,000 Navistar International
Corporation +................... $ 1,556,250
238,750 Pittway Corporation, Class A...... 11,818,125
20,000 Scientific-Atlanta, Inc. ......... 355,000
48,500 Sequa Corporation, Class A +...... 1,655,062
5,000 Sequa Corporation, Class B +...... 205,000
------------
26,977,987
------------
HOTELS/CASINOS--5.3%
210,000 Aztar Corporation +............... 1,785,000
100,000 Circus Circus Enterprises,
Inc. +.......................... 3,362,500
194,000 Hilton Hotels Corporation......... 18,236,000
80,000 Mirage Resorts, Incorporated +.... 3,510,000
------------
26,893,500
------------
WIRELESS COMMUNICATIONS--4.4%
100,000 AirTouch Communications Inc. +.... 3,112,500
430,000 Century Telephone Enterprises,
Inc. ........................... 13,652,500
20,000 COMSAT Corporation, Series 1...... 467,500
500,000 Telecom Italia Mobile SpA +....... 908,862
85,000 Telephone and Data Systems,
Inc. ........................... 3,931,250
20,000 360(++) Communications
Company +....................... 477,500
------------
22,550,112
------------
FINANCIAL SERVICES--4.2%
290,000 American Express Company.......... 14,318,750
190,000 Lehman Brothers Holdings Inc. .... 5,082,500
60,000 Salomon Inc. ..................... 2,250,000
------------
21,651,250
------------
FOOD AND BEVERAGE--2.5%
20,000 PepsiCo, Inc. .................... 1,265,000
260,000 Quaker Oats Company............... 8,677,500
40,000 Seagram Company Ltd. ............. 1,295,000
30,000 Wrigley (Wm.) Jr. Company......... 1,758,750
------------
12,996,250
------------
TELECOMMUNICATIONS--2.1%
60,000 BCE Inc. ......................... 2,122,500
76,000 C-TEC Corporation +............... 2,831,000
28,000 Lincoln Telecommunications
Company......................... 539,000
5,000 Motorola, Inc. ................... 265,000
40,000 Northern Telecom Limited.......... 1,910,000
30,000 Southern New England
Telecommunications
Corporation..................... 1,207,500
55,000 Sprint Corporation................ 2,090,000
------------
10,965,000
------------
DIVERSIFIED INDUSTRIAL--1.5%
15,000 Brady (W.H.) Co., Class A......... 320,625
100,000 ITT Industries Inc. .............. 2,550,000
217,500 Katy Industries, Inc. ............ 2,963,438
65,400 Lamson & Sessions Co. +........... 604,950
30,000 Trinity Industries, Inc. ......... 1,046,250
90,000 Tyler Corporation +............... 213,750
------------
7,699,013
------------
</TABLE>
9
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THE GABELLI VALUE FUND INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 1996 (UNAUDITED)
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<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
METALS AND MINING--1.4%
65,000 Barrick Gold Corporation.......... $ 1,974,375
60,000 Echo Bay Mines Ltd. .............. 810,000
60,000 Homestake Mining Company.......... 1,162,500
70,000 Placer Dome Inc. ................. 2,021,250
300,000 Royal Oak Mines Inc. +............ 1,256,250
------------
7,224,375
------------
AUTOMOTIVE: PARTS AND ACCESSORIES--1.4%
162,000 Handy & Harman.................... 2,652,750
50,000 Johnson Controls, Inc. ........... 3,731,250
50,000 Quaker State Corporation.......... 700,000
------------
7,084,000
------------
RETAIL--1.3%
20,000 Burlington Coat Factory Warehouse
Corporation +................... 235,000
40,000 Hartmarx Corporation +............ 190,000
40,000 Lillian Vernon Corporation........ 545,000
245,000 Neiman Marcus Group, Inc. +....... 5,451,250
------------
6,421,250
------------
BUSINESS SERVICES--1.1%
118,000 Berlitz International, Inc.,
New +........................... 1,917,500
38,000 Honeywell, Inc. .................. 2,099,500
135,000 Nashua Corporation................ 1,738,125
------------
5,755,125
------------
AUTOMOTIVE--1.0%
100,000 General Motors Corporation........ 5,325,000
------------
ELECTRONICS--1.0%
100,000 Loral Corporation................. 4,900,000
------------
ENERGY--0.7%
20,000 Atlantic Richfield Company........ 2,380,000
30,000 Burlington Resources Inc. ........ 1,113,750
------------
3,493,750
------------
MARKET
SHARES VALUE(C)
- ------------ ------------
SPECIALTY CHEMICAL--0.6%
110,000 Ferro Corporation................. $ 3,121,250
------------
REAL ESTATE--0.4%
265,000 Catellus Development
Corporation +................... 2,053,750
------------
AVIATION: PARTS AND SERVICE--0.3%
34,000 Hudson General Corporation........ 1,474,750
------------
TOTAL COMMON STOCKS.............................. 477,543,582
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------
<C> <S> <C>
CORPORATE BOND--0.1%
ENTERTAINMENT--0.1%
$ 497,000 Viacom Inc., Ex. Sub. Deb., 8.000%
due 07/07/2006.................. 476,809
------------
U.S. TREASURY BILLS--5.4%
28,000,000 5.100% to 5.140%++ due 05/09/1996-
06/27/1996...................... 27,811,575
------------
REPURCHASE AGREEMENT--1.5%
7,760,000 Agreement with Morgan (J.P.) & Co.
Incorporated, 5.375% due
04/01/1996(a)................... 7,760,000
------------
TOTAL INVESTMENTS
(COST $373,640,884)(B).............. 100.4% 513,591,966
OTHER ASSETS AND LIABILITIES (NET)........ (0.4) (2,073,714)
----- ------------
NET ASSETS APPLICABLE TO 39,727,670 SHARES
OF COMMON STOCK OUTSTANDING............. 100.0% $511,518,252
===== ===========
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE................................... $ 12.88
===========
MAXIMUM OFFERING PRICE PER SHARE
($12.88 / .945, BASED ON MAXIMUM
SALES CHARGE OF 5.5% OF THE OFFERING
PRICE AT MARCH 31, 1996)................ $ 13.63
===========
<FN>
- ---------------
(a) Agreement dated 03/29/1996, to be repurchased at $7,763,476, collateralized
by $5,799,000 U.S. Treasury Bonds, 11.875% due 11/15/2003 (value
$7,915,635).
(b) Aggregate cost for Federal tax purposes was $373,964,478. Net unrealized
appreciation for Federal tax purposes was $139,627,488 (gross unrealized
appreciation was $147,048,028 and gross unrealized depreciation was
$7,420,540).
(c) Securities traded on a national securities exchange are valued at the last
sale price as of the close of business on the day the securities are being
valued. Securities for which no sale was reported on that day and
over-the-counter securities are valued at the mean between the last reported
bid and asked prices. U.S. Government obligations and other debt instruments
with 60 days or less to maturity are valued at amortized cost which
approximates market value. Short-term investments with greater than 60 days
to maturity are valued at the highest independent bid price as quoted by
market makers.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
GDR -- Global Depositary Receipt.
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THE GABELLI VALUE FUND INC.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Robert J. Morrissey
Chairman and Chief Attorney-at-Law
Investment Officer Morrissey & Hawkins
Gabelli Funds, Inc.
Karl Otto Pohl
Bill Callaghan Former President
President Deutsch Bundesbank
Bill Callaghan Associates
Anthony R. Pustorino
Felix J. Christiana Certified Public Accountant
Former Senior Vice President Professor, Pace University
Dollar Dry Dock Savings Bank
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
President and Chief Chief Operating Officer,
Investment Officer Vice President and
Treasurer
James E. McKee
Secretary
[/TABLE]
CUSTODIAN
Boston Safe Deposit and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Willkie Farr & Gallagher
UNDERWRITER
Gabelli & Company, Inc.
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This report is submitted for the general information of the shareholders of
The Gabelli Value Fund Inc. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
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THE
GABELLI
VALUE
FUND
INC.
FIRST QUARTER REPORT
MARCH 31, 1996
