<PAGE> 1
THE GABELLI VALUE FUND INC.
SEMI-ANNUAL REPORT
JUNE 30, 1999
[FIVESTARS]
Morningstar Rated(TM) Gabelli Value Fund 5 stars for the three-year
period ended 6/30/99 among 3043 domestic equity funds, and 4 stars overall and
for the five-year period ended 6/30/99 among 3043 and 1878 domestic equity
funds, respectively.
TO OUR SHAREHOLDERS,
"BUT MANY WHO ARE FIRST WILL BE LAST, AND THE LAST FIRST" (MARK 10:31)
Value stocks excelled in the second quarter of 1999. Cyclical stocks
ignited the rally, with the stronger than anticipated economy bolstering the
earnings outlook for economically sensitive companies. Other value sectors
caught the spark as investors began rotating out of richly valued growth stocks
into more reasonably priced companies in a wide range of industries. The
Internet balloon did not burst, but enough hot air escaped to bring the ".com"
companies closer to earth.
Also, small cap stocks finally emerged from what has been a long and
painful bear market. For the first time in seven quarters, the Russell 2000
outpaced the S&P 500 on its way to posting double digit returns for the quarter.
INVESTMENT PERFORMANCE
For the second quarter ended June 30, 1999, The Gabelli Value Fund's (the
"Fund") total return was 13.2%. The Standard & Poor's ("S&P") 500, Value Line
Composite and Russell 2000 Indices had total returns of 7.1%, 17.3% and 15.6%,
respectively, over the same period. Each index is an unmanaged indicator of
stock market performance. The Fund was up 26.7% over the trailing twelve-month
period. The S&P 500, Value Line Composite and Russell 2000 rose 22.8%, 10.4% and
1.5%, respectively, over the same twelve-month period.
For the five-year period ended June 30, 1999, the Fund's total return
averaged 25.4% annually versus average annual total returns of 27.9%, 19.1% and
15.4% for the S&P 500, Value Line Composite and Russell 2000, respectively.
Since inception on September 29, 1989 through June 30, 1999, the Fund had a
cumulative total return of 417.5%, which equates to an average annual total
return of 18.3%.
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of June 30, 1999 and are
subject to change every month. Morningstar ratings are calculated from a Fund's
three, five and ten-year average annual returns in excess of 90-day T-Bill
returns with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-Bill returns. The top 10% of the funds in a broad
asset class receive five stars, the next 22.5% receive four stars, the next 35%
receive three stars, the next 22.5% receive two stars and the bottom 10% receive
one star.
<PAGE> 2
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
Quarter
------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1999: Net Asset Value................ $17.29 $19.58 -- -- --
Total Return................... 7.5% 13.2% -- -- --
- -------------------------------------------------------------------------------------------------------
1998: Net Asset Value................ $16.43 $16.94 $14.71 $16.08 $16.08
Total Return................... 14.9% 3.1% (13.2)% 19.8% 23.2%
- -------------------------------------------------------------------------------------------------------
1997: Net Asset Value................ $11.63 $14.11 $15.73 $14.30 $14.30
Total Return................... 1.0% 21.3% 11.5% 8.6% 48.2%
- -------------------------------------------------------------------------------------------------------
1996: Net Asset Value................ $12.88 $13.08 $12.63 $11.52 $11.52
Total Return................... 10.9% 1.6% (3.4)% 0.0% 8.7%
- -------------------------------------------------------------------------------------------------------
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)
- -------------------------------------------------------------------------------------------------------
</TABLE>
Average Annual Returns - June 30, 1999 (a)
--------------------------------------------------
1 Year.................................................................26.7%
.................................................................19.7%(c)
5 Year.................................................................25.4%
.................................................................24.0%(c)
Life of Fund (b).......................................................18.3%
.................................................................17.7%(c)
<TABLE>
<CAPTION>
Dividend History
------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
----------------- -------------- ------------------
<S> <C> <C>
December 28, 1998 $1.490 $15.54
December 29, 1997 $2.720 $14.01
December 27, 1996 $1.110 $11.57
December 27, 1995 $1.230 $11.56
December 30, 1994 $1.600 $10.49
December 31, 1993 $2.036 $12.09
December 31, 1992 $0.553 $10.13
December 31, 1991 $0.334 $ 9.48
December 31, 1990 $0.420 $ 8.51
March 19, 1990 $0.120 $ 9.21
December 29, 1989 $0.068 $ 9.58
</TABLE>
(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 investment operations
on September 29, 1989. (c) Includes the effect of the maximum 5.5% sales
charge at beginning of period.
2
<PAGE> 3
[LOGO]
WHAT WE DO
The success of momentum investing in recent years and investors' desire for
instant gratification have combined to make value investing appear dull. At the
risk of being dull, we will once again describe the "boring" value approach that
has seen us through both good and bad markets over the last nine years at The
Gabelli Value Fund and for over 22 years at Gabelli Asset Management Company. In
past reports, we have tried to articulate our investment philosophy and
methodology. The accompanying graphic further illustrates the interplay among
the four components of our valuation approach.
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. equity markets. 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 the globalization of the market in filmed entertainment and
telecommunications, and micro trends, such as an increased focus on productivity
enhancing goods and services.
COMMENTARY
ECONOMIC OUTLOOK
Mario Gabelli, our Chief Investment Officer, has appeared in the
prestigious BARRON'S Roundtable discussion annually since 1980. Many of our
readers have enjoyed the inclusion of selected and edited comments from BARRON'S
Roundtable in previous reports to shareholders. Once again, we are including
selected comments of Mario Gabelli from BARRON'S 1999 Midyear Roundtable. For
our shareholders who prefer to view the entire interview, the complete text is
available on the Internet at www.gabelli.com.
3
<PAGE> 4
BARRON'S ("Q"): MARIO, HOW DOES THE SECOND HALF LOOK?
GABELLI ("G"): I said in January that rates would back up to 5.75%-6%. Now
they're a little above where I thought they would be. We don't create an
official inflation model, but look at it this way: Inflation breaks down into
three parts -- labor, commodities and services. Commodity prices have bottomed
out. Services, particularly health care, are accelerating. Unit labor costs
could start picking up. So if inflation nudges above 3%, I don't see long rates
falling below 6%. If rates stay at 6% with the Dow Jones Industrials at 10,700,
the market has no margin of safety unless earnings pick up dramatically.
Q: WILL THEY?
G: I see U.S. profits roaring ahead. The combination of reasonably good end
demand, reasonably okay cost structures and continuing intensity on the part of
U.S. companies to further lower their costs adds up to a pretty good outlook.
Q: WHERE DOES THAT LEAVE THE STOCK MARKET?
G: Global financial landscapes are being shaped by mergers and
acquisitions. The Financial Accounting Standards Board proposes to end
pooling-of-interests transactions in January 2001. Between now and then, over a
span of 18 months, there will be an incredible rush of deals. Some of them will
be for cash, and this flow of funds will help the market.
When I add it all up, I expect that as soon as any stock sector gets weak,
a deal will come along to revive it. So the market will be volatile, with lots
of liquidity.
Before we look ahead, I just want to say that we have had very good success
in positioning ourselves in companies that are taken over. Aeroquip-Vickers,
which I mentioned in January at $30, was bought by Eaton for $58 cash a share.
That was a slam-dunk home run. MediaOne Group, which I also mentioned, has
agreed to be acquired by AT&T. That's another reasonably attractive deal. We
think that three or four of our other holdings could be taken over. [ ]
AMERICAN CONSUMERS: WILL THE ENGINE OF GLOBAL ECONOMIC GROWTH CONTINUE STEAMING
ALONG?
We want to echo again the question we asked in our September 30, 1998
report and repeated in our March 31, 1999 report: Will the American consumer
continue to carry the rest of the world, or will the consumer eventually run low
on confidence and/or the resources required to nourish the global economy? Put
another way, can the U.S. continue to run enormous balance of payment deficits
that provide hope and sustenance for the other economies of the world as they
attempt to emerge from their economic malaise?
Full employment, higher wages, the wealth effect associated with rising
home values and a vibrant stock market have emboldened consumers, who continue
to spend quite liberally. If rising interest rates discourage consumers from
financing their spending spree, or we see a meaningful correction in the stock
market dent consumer confidence, the engine that has been driving global
economic growth may sputter. Equally important, if the U.S. consumer continues
to be the sole driver of global economic activity, the U.S. balance of payments
deficit will exceed even our dire forecast of a $250 billion run rate. The value
of the U.S. dollar is a wild card in the mix of elements that will determine the
direction of the overall U.S. economy and the stock market.
4
<PAGE> 5
THE MARKET: EARNINGS AND INTEREST RATES
In our first quarter 1999 letter to shareholders, we also opined that
earnings and interest rates would call the market tune for the balance of the
year. In general, first quarter earnings met consensus estimates and second
quarter earnings should be stronger than anticipated, with particularly good
comparisons to 1998's second quarter, when General Motor's strike and the plunge
in energy prices crimped reported results. However, interest rates are higher,
and until we see convincing evidence that inflation is firmly under control,
rates are not likely to trend much lower. With the S&P 500's gains already
approximating 1999 earnings growth forecasts, we see an inadequate "margin of
safety" in the stock market. Money flowing into the markets, particularly from
deal activity, is the fuel powering a market that still favors stocks. However,
money is no longer pouring into equity mutual funds at the rates we have seen in
previous years. All this conjecture leads us to the opinion that stock
selectivity remains crucial over the next twelve months.
VALUE VERSUS GROWTH, SMALL CAP VERSUS LARGE CAP
Growth has outperformed value for five years and large cap stocks have
outperformed small caps for nearly as long. This is not unusual. Style and
capitalization sectors generally take lengthy turns leading the market. Does the
ascent of value and small cap stocks this quarter signify a major change in
market leadership? One quarter of outperformance does not a trend make. However,
fundamentals favor value stocks and small cap equities going forward. Despite
the strong second quarter rally, based on historical measurements, value stocks
remain inexpensive and growth stocks are still overvalued. Small cap stocks
offer the dual advantages of generally better earnings growth prospects than
large caps and materially lower price/earnings and price/cash flow multiples.
The accompanying chart shows the ebbs and flows of growth and value
investing over the last 23 years. The chart tracks large capitalization stocks
but the same performance would hold true for small and mid-cap stocks.
[GRAPH}
Source: Standard & Poor's Corp.; BARRA
5
<TABLE>
<CAPTION>
DATE SP500 GROWTH VALUE
- ------------------------------------------------------------ ------ ------ ------
<S> <C> <C> <C>
Jan-1975.................................................... 12.72% 9.44% 15.16%
Feb-1975.................................................... 6.38% 10.91% 3.25%
Mar-1975.................................................... 2.54% 2.68% 2.07%
Apr-1975.................................................... 5.10% 5.65% 4.25%
May-1975.................................................... 4.77% 4.50% 5.67%
Jun-1975.................................................... 4.77% 2.55% 6.51%
Jul-1975.................................................... -6.44% -8.83% -4.12%
Aug-1975.................................................... -1.75% -1.96% -0.94%
Sep-1975.................................................... -3.11% -4.15% -2.19%
Oct-1975.................................................... 6.53% 7.92% 5.04%
Nov-1975.................................................... 2.82% 3.54% 2.50%
Dec-1975.................................................... -0.81% -2.49% 0.67%
Jan-1976.................................................... 12.17% 11.94% 11.76%
Feb-1976.................................................... -0.84% -2.18% 1.09%
Mar-1976.................................................... 3.37% 3.28% 3.26%
Apr-1976.................................................... -0.77% -2.62% 0.75%
May-1976.................................................... -1.11% -1.46% -0.16%
Jun-1976.................................................... 4.43% 4.55% 4.10%
Jul-1976.................................................... -0.47% -1.53% 0.21%
Aug-1976.................................................... -0.18% -0.17% 0.49%
Sep-1976.................................................... 2.59% 1.66% 3.23%
Oct-1976.................................................... -1.86% -2.18% -1.76%
Nov-1976.................................................... -0.40% -1.52% 1.47%
Dec-1976.................................................... 5.61% 4.22% 6.59%
Jan-1977.................................................... -4.72% -7.65% -2.80%
Feb-1977.................................................... -1.82% -1.59% -1.44%
Mar-1977.................................................... -1.05% -1.78% -0.66%
Apr-1977.................................................... 0.42% -2.10% 2.28%
May-1977.................................................... -1.96% -2.67% -0.47%
Jun-1977.................................................... 4.94% 6.14% 3.43%
Jul-1977.................................................... -1.24% -1.47% -1.56%
Aug-1977.................................................... -1.72% 0.94% -3.62%
Sep-1977.................................................... 0.16% -0.80% 0.88%
Oct-1977.................................................... -3.89% -4.54% -3.68%
Nov-1977.................................................... 3.16% 3.83% 3.41%
Dec-1977.................................................... 0.75% -0.12% 1.24%
Jan-1978.................................................... -5.74% -6.20% -5.71%
Feb-1978.................................................... -2.02% -2.86% -0.28%
Mar-1978.................................................... 2.94% 1.58% 3.73%
Apr-1978.................................................... 9.02% 11.21% 6.35%
May-1978.................................................... 0.92% 1.51% 1.22%
Jun-1978.................................................... -1.37% -0.99% -2.13%
Jul-1978.................................................... 5.83% 7.02% 4.13%
Aug-1978.................................................... 3.01% 2.74% 4.00%
Sep-1978.................................................... -0.31% -2.09% 1.36%
Oct-1978.................................................... -8.71% -8.46% -9.23%
Nov-1978.................................................... 2.15% 1.94% 3.16%
Dec-1978.................................................... 1.96% 2.75% 0.51%
Jan-1979.................................................... 4.43% 3.15% 5.37%
Feb-1979.................................................... -3.21% -3.55% -2.04%
Mar-1979.................................................... 5.96% 5.55% 5.80%
Apr-1979.................................................... 0.63% 0.25% 0.60%
May-1979.................................................... -2.17% -2.10% -1.70%
Jun-1979.................................................... 4.35% 3.26% 4.82%
Jul-1979.................................................... 1.34% 0.76% 1.54%
Aug-1979.................................................... 5.77% 6.39% 5.78%
Sep-1979.................................................... 0.43% -0.25% 0.78%
Oct-1979.................................................... -6.40% -5.61% -7.48%
Nov-1979.................................................... 4.75% 5.91% 4.33%
Dec-1979.................................................... 2.14% 1.72% 1.89%
Jan-1980.................................................... 6.22% 6.34% 5.71%
Feb-1980.................................................... 0.00% 0.01% 0.68%
Mar-1980.................................................... -9.72% -9.18% -10.53%
Apr-1980.................................................... 4.62% 2.92% 5.77%
May-1980.................................................... 5.15% 5.31% 5.86%
Jun-1980.................................................... 3.16% 3.55% 2.32%
Jul-1980.................................................... 6.96% 7.89% 5.37%
Aug-1980.................................................... 1.01% 1.13% 1.48%
Sep-1980.................................................... 2.94% 4.33% 0.94%
Oct-1980.................................................... 2.03% 3.42% -0.01%
Nov-1980.................................................... 10.65% 14.25% 6.44%
Dec-1980.................................................... -3.01% -4.39% -1.38%
Jan-1981.................................................... -4.18% -6.70% -2.03%
Feb-1981.................................................... 1.74% 2.73% 1.39%
Mar-1981.................................................... 4.00% 3.29% 4.33%
Apr-1981.................................................... -1.93% -4.12% -0.10%
May-1981.................................................... 0.26% 0.23% 0.92%
Jun-1981.................................................... -0.62% -1.54% -0.17%
Jul-1981.................................................... 0.21% 1.68% -1.37%
Aug-1981.................................................... -5.77% -6.35% -4.56%
Sep-1981.................................................... -4.92% -6.14% -3.91%
Oct-1981.................................................... 5.40% 6.70% 3.85%
Nov-1981.................................................... 4.13% 3.92% 4.78%
Dec-1981.................................................... -2.56% -2.85% -2.57%
Jan-1982.................................................... -1.30% -0.01% -1.87%
Feb-1982.................................................... -5.59% -6.71% -3.45%
Mar-1982.................................................... -0.52% -1.57% 0.29%
Apr-1982.................................................... 4.52% 5.50% 2.82%
May-1982.................................................... -3.40% -3.04% -2.45%
Jun-1982.................................................... -1.50% -1.66% -1.78%
Jul-1982.................................................... -1.77% -1.15% -2.97%
Aug-1982.................................................... 12.14% 11.47% 13.62%
Sep-1982.................................................... 1.25% 1.64% 0.50%
Oct-1982.................................................... 11.51% 11.35% 11.21%
Nov-1982.................................................... 4.04% 5.29% 3.55%
Dec-1982.................................................... 1.93% 2.00% 1.34%
Jan-1983.................................................... 3.72% 2.26% 4.69%
Feb-1983.................................................... 2.29% 2.92% 2.16%
Mar-1983.................................................... 3.69% 3.34% 3.91%
Apr-1983.................................................... 7.88% 6.79% 8.29%
May-1983.................................................... -0.87% -1.15% 0.02%
Jun-1983.................................................... 3.89% 5.72% 1.94%
Jul-1983.................................................... -2.95% -4.48% -1.65%
Aug-1983.................................................... 1.50% -0.46% 3.87%
Sep-1983.................................................... 1.38% 1.83% 0.85%
Oct-1983.................................................... -1.15% -2.10% -0.58%
Nov-1983.................................................... 2.11% 2.02% 2.63%
Dec-1983.................................................... -0.52% -0.97% -0.08%
Jan-1984.................................................... -0.55% -3.26% 2.21%
Feb-1984.................................................... -3.51% -4.20% -2.37%
Mar-1984.................................................... 1.73% 2.11% 1.28%
Apr-1984.................................................... 0.95% 0.61% 0.75%
May-1984.................................................... -5.53% -5.10% -5.41%
Jun-1984.................................................... 2.17% 3.06% 1.25%
Jul-1984.................................................... -1.24% -0.63% -2.31%
Aug-1984.................................................... 11.05% 10.22% 12.29%
Sep-1984.................................................... 0.02% -1.46% 1.60%
Oct-1984.................................................... 0.39% 1.04% -0.46%
Nov-1984.................................................... -1.12% -1.75% -0.26%
Dec-1984.................................................... 2.64% 2.57% 2.42%
Jan-1985.................................................... 7.79% 7.97% 7.31%
Feb-1985.................................................... 1.23% 1.51% 1.29%
Mar-1985.................................................... 0.07% -0.24% 0.34%
Apr-1985.................................................... -0.09% -1.49% 0.94%
May-1985.................................................... 5.78% 6.41% 5.49%
Jun-1985.................................................... 1.57% 1.90% 1.16%
Jul-1985.................................................... -0.14% -0.38% -0.23%
Aug-1985.................................................... 0.85% -1.23% -0.90%
Sep-1985.................................................... -3.12% -3.66% -2.84%
Oct-1985.................................................... 4.62% 4.19% 4.81%
Nov-1985.................................................... 6.86% 8.90% 5.36%
Dec-1985.................................................... 4.84% 6.13% 3.21%
Jan-1986.................................................... 0.56% -4.30% 1.33%
Feb-1986.................................................... 7.48% 7.57% 7.58%
Mar-1986.................................................... 5.58% 5.88% 5.06%
Apr-1986.................................................... -1.12% 0.21% -2.79%
May-1986.................................................... 5.32% 5.36% 5.57%
Jun-1986.................................................... 1.69% 1.83% 1.44%
Jul-1986.................................................... -5.59% -6.65% -4.76%
Aug-1986.................................................... 7.42% 4.90% 10.06%
Sep-1986.................................................... -8.26% -10.22% -6.32%
Oct-1986.................................................... 5.77% 6.33% 4.79%
Nov-1986.................................................... 2.43% 2.85% 2.24%
Dec-1986.................................................... -2.55% -2.33% -3.00%
Jan-1987.................................................... 13.47% 13.62% 13.24%
Feb-1987.................................................... 3.95% 6.77% 1.39%
Mar-1987.................................................... 2.89% 2.22% 3.27%
Apr-1987.................................................... -0.88% -1.19% -0.62%
May-1987.................................................... 0.87% 1.14% 0.90%
Jun-1987.................................................... 5.05% 5.06% 4.92%
Jul-1987.................................................... 5.07% 5.51% 4.40%
Aug-1987.................................................... 3.73% 4.15% 3.49%
Sep-1987.................................................... -2.19% -2.59% -1.81%
Oct-1987.................................................... -21.53% -22.71% -20.32%
Nov-1987.................................................... -8.24% -8.86% -7.47%
Dec-1987.................................................... 7.61% 8.48% 6.26%
Jan-1988.................................................... 4.21% 2.03% 6.64%
Feb-1988.................................................... 4.66% 4.72% 4.58%
Mar-1988.................................................... -3.08% -0.39% -2.11%
Apr-1988.................................................... 1.11% 0.81% 1.25%
May-1988.................................................... 0.87% 0.30% 1.23%
Jun-1988.................................................... 4.59% 4.94% 4.29%
Jul-1988.................................................... -0.37% -0.65% -0.12%
Aug-1988.................................................... -3.39% -3.77% -2.75%
Sep-1988.................................................... 4.26% 4.54% 3.87%
Oct-1988.................................................... 2.78% 2.35% 3.16%
Nov-1988.................................................... -1.42% 1.85% -0.95%
Dec-1988.................................................... 1.75% 2.35% 1.14%
Jan-1989.................................................... 7.32% 7.18% 7.33%
Feb-1989.................................................... -2.49% -2.67% -2.16%
Mar-1989.................................................... 2.33% 2.08% 2.64%
Apr-1989.................................................... 5.19% 5.42% 4.80%
May-1989.................................................... 4.05% 4.29% 3.79%
Jun-1989.................................................... -0.56% -0.73% -0.36%
Jul-1989.................................................... 9.03% 10.88% 6.90%
Aug-1989.................................................... 1.96% 1.52% 2.20%
Sep-1989.................................................... -0.40% 2.50% -1.07%
Oct-1989.................................................... -2.32% -1.50% -3.23%
Nov-1989.................................................... 2.04% 3.12% 0.89%
Dec-1989.................................................... 2.40% 2.39% 2.32%
Jan-1990.................................................... -6.71% -7.47% -5.87%
Feb-1990.................................................... 1.29% 0.58% 2.03%
Mar-1990.................................................... 2.65% 3.99% 1.19%
Apr-1990.................................................... -2.49% -1.62% -3.40%
May-1990.................................................... 9.75% 11.32% 7.96%
Jun-1990.................................................... -0.67% 0.33% -1.89%
Jul-1990.................................................... -0.32% -0.63% 0.01%
Aug-1990.................................................... -9.03% -9.22% 8.80%
Sep-1990.................................................... -4.86% -5.16% -4.63%
Oct-1990.................................................... -0.42% 0.66% -1.42%
Nov-1990.................................................... 6.46% 6.04% 6.83%
Dec-1990.................................................... 2.79% 3.18% 2.26%
Jan-1991.................................................... 4.36% 4.16% 4.73%
Feb-1991.................................................... 7.15% 7.75% 6.52%
Mar-1991.................................................... 2.42% 3.78% 0.91%
Apr-1991.................................................... 0.24% -0.19% 0.79%
May-1991.................................................... 4.31% 3.78% 4.77%
Jun-1991.................................................... -4.58% -4.18% -4.97%
Jul-1991.................................................... 4.66% 5.35% 3.97%
Aug-1991.................................................... 2.37% 3.22% 1.45%
Sep-1991.................................................... -1.67% -2.19% -1.05%
Oct-1991.................................................... 1.34% 1.22% 1.46%
Nov-1991.................................................... -4.02% 2.55% -5.58%
Dec-1991.................................................... 11.44% 14.09% 8.51%
Jan-1992.................................................... -1.86% -3.35% 0.00%
Feb-1992.................................................... 1.30% 0.59% 2.03%
Mar-1992.................................................... -1.94% -2.32% -1.57%
Apr-1992.................................................... 2.94% 1.06% 4.88%
May-1992.................................................... 0.49% 0.78% 0.28%
Jun-1992.................................................... -1.48% -2.07% -0.82%
Jul-1992.................................................... 4.09% 4.51% 3.61%
Aug-1992.................................................... -2.04% -1.15% -2.90%
Sep-1992.................................................... 1.18% 1.18% 1.10%
Oct-1992.................................................... 0.35% 1.50% -0.80%
Nov-1992.................................................... 3.41% 4.04% 2.71%
Dec-1992.................................................... 1.23% 0.66% 1.81%
Jan-1993.................................................... 0.84% -1.08% 2.76%
Feb-1993.................................................... 1.36% -0.80% 3.44%
Mar-1993.................................................... 2.11% 1.41% 2.76%
Apr-1993.................................................... -2.41% -4.61% -0.40%
May-1993.................................................... 2.68% 3.56% 1.87%
Jun-1993.................................................... 0.29% -0.85% 1.32%
Jul-1993.................................................... -0.40% -2.56% 1.24%
Aug-1993.................................................... 3.79% 3.65% 3.92%
Sep-1993.................................................... -0.76% -1.53% -0.37%
Oct-1993.................................................... 2.07% 3.72% 0.54%
Nov-1993.................................................... -0.95% -0.07% -1.79%
Dec-1993.................................................... 1.21% 0.70% 1.70%
Jan-1994.................................................... 3.40% 2.14% 4.66%
Feb-1994.................................................... -2.71% -1.79% -3.62%
Mar-1994.................................................... -4.36% -4.61% -4.11%
Apr-1994.................................................... 1.28% 0.45% 2.11%
May-1994.................................................... 1.64% 1.63% 1.66%
Jun-1994.................................................... -2.45% -2.13% -2.77%
Jul-1994.................................................... 3.28% 3.19% 3.38%
Aug-1994.................................................... 4.10% 5.34% 2.83%
Sep-1994.................................................... -2.44% -1.42% -3.52%
Oct-1994.................................................... 2.25% 2.33% 2.18%
Nov-1994.................................................... -3.64% -3.28% -4.05%
Dec-1994.................................................... 1.48% 1.73% 1.23%
Jan-1995.................................................... 2.59% 2.48% 2.71%
Feb-1995.................................................... 3.90% 3.90% 3.88%
Mar-1995.................................................... 2.95% 3.14% 2.76%
Apr-1995.................................................... 2.95% 2.60% 3.29%
May-1995.................................................... 4.00% 3.58% 4.45%
Jun-1995.................................................... 2.32% 3.83% 0.76%
Jul-1995.................................................... 3.32% 3.19% 3.45%
Aug-1995.................................................... 0.25% -0.33% 0.85%
Sep-1995.................................................... 4.22% 4.94% 3.48%
Oct-1995.................................................... -0.35% 0.80% -1.56%
Nov-1995.................................................... 4.39% 3.60% 5.24%
Dec-1995.................................................... 1.93% 1.13% 2.77%
Jan-1996.................................................... 3.40% 3.82% 2.99%
Feb-1996.................................................... 0.93% 0.91% 0.94%
Mar-1996.................................................... 0.96% -0.42% 2.34%
Apr-1996.................................................... 1.47% 1.95% 1.02%
May-1996.................................................... 2.58% 3.68% 1.51%
Jun-1996.................................................... 0.38% 1.25% -0.48%
Jul-1996.................................................... -4.41% -4.61% -4.22%
Aug-1996.................................................... 2.11% 1.48% 2.76%
Sep-1996.................................................... 5.63% 6.94% 4.28%
Oct-1996.................................................... 2.76% 2.17% 3.39%
Nov-1996.................................................... 7.56% 7.47% 7.65%
Dec-1996.................................................... -1.98% 2.31% -1.63%
Jan-1997.................................................... 6.25% 7.83% 4.61%
Feb-1997.................................................... 0.78% 0.84% 0.73%
Mar-1997.................................................... -4.10% -4.75% -3.42%
Apr-1997.................................................... 5.97% 8.07% 3.75%
May-1997.................................................... 6.09% 5.92% 6.27%
Jun-1997.................................................... 4.48% 5.07% 3.82%
Jul-1997.................................................... 7.96% 7.91% 8.00%
Aug-1997.................................................... -5.60% -6.65% -4.52%
Sep-1997.................................................... 5.48% 5.10% 5.86%
Oct-1997.................................................... -3.34% 3.01% -3.68%
Nov-1997.................................................... 4.63% 5.43% 3.81%
Dec-1997.................................................... 1.72% 1.23% 2.22%
Jan-1998.................................................... 1.11% 3.36% -1.23%
Feb-1998.................................................... 7.21% 6.95% 7.50%
Mar-1998.................................................... 5.12% 5.17% 5.07%
Apr-1998.................................................... 1.01% 8.38% 1.18%
May-1998.................................................... -1.71% -2.01% -1.41%
Jun-1998.................................................... 4.06% 7.13% 0.76%
Jul-1998.................................................... -1.06% -0.06% -2.17%
Aug-1998.................................................... -14.45% -13.01% -16.08%
Sep-1998.................................................... 6.41% 6.69% 6.08%
Oct-1998.................................................... 8.13% 8.39% 7.83%
Nov-1998.................................................... 6.06% 6.77% 5.21%
Dec-1998.................................................... 5.76% 7.61% 3.51%
Jan-1999.................................................... 4.18% 6.11% 2.02%
Feb-1999.................................................... -3.10% -3.92% -2.15%
Mar-1999.................................................... 4.00% 4.84% 3.03%
Apr-1999.................................................... 3.87% -0.19% 8.62%
May-1999.................................................... -2.36% -2.92% -1.77%
Jun-1999.................................................... 5.55% 7.16% 3.84%
</TABLE>
6
<PAGE> 6
Despite our own value bias and The Gabelli Value Fund's focus on smaller
companies, our Fund has performed quite well in a market that has strongly
favored large cap growth stocks over all others. We believe we can do even
better relative to the S&P 500 in a market that tilts toward value and smaller
cap stocks.
THIS QUARTER'S SCORECARD
We are particularly proud of our portfolio's batting average this quarter.
Nearly 67% of our portfolio holdings outperformed the S&P 500. That is almost
two hits in every three at bats. Our cyclical holdings were among our most
productive batters. Industrial cyclicals such as Sequa, Navistar, Honeywell and
Dana helped us build a big lead over the benchmark. Energy and energy service
companies such as PennzEnergy and Citizens Utilities also connected at the
plate. AT&T Corp.'s Liberty Media Group is a contender for "Most Valuable
Player", as investors applaud its acquisition of Associated Group. Liberty Media
is the tracking stock for the company being run by former Tele-Communications
Inc. Chairman and "Value Creator Extraordinaire", John Malone.
Some of our previous all-stars, most notably Cablevision and Viacom,
experienced old-fashioned profit taking. After exceptional performance in
1997-98, momentum investors began purchasing the stocks of these cable and media
sluggers. True to form, the momentum investors abandoned their new holdings as
soon as they fell behind in the count. We believe these dominant franchises will
rebound smartly later this season. We struck out with food and beverage holdings
Advantica Restaurant Group, Celestial Seasonings, PepsiCo, Seagram and Whitman.
A BROADCAST RECOVERY?
American broadcasters suffered through a dismal 1998. They continued to
lose eyeballs and advertising dollars to cable television operators, and the
Internet captured a larger piece of many companies' advertising budgets.
However, the tide may be turning. Although the national and local spot markets
remain soft, upfront advertising sales are up 13%. Buoyed by spending from
pharmaceutical companies (which are now allowed to market their prescription
products on television), Internet companies that are spending lavishly on
advertising to establish their brand names and big new ad campaigns planned for
the millennium, broadcasters' ad revenues should trend higher. Broadcasters will
get an additional boost in the upcoming election year as politicians open
campaign treasure chests to win the hearts and minds of American voters.
This quarter, our broadcast holdings were mixed. Paxson Communications and
Grupo Televisa posted strong gains as Meredith Corp. tuned in with sound
performance. But Liberty Corp and Chris Craft Industries were flat, while Gray
Communications declined. We believe that when investors start focusing on next
year's numbers, they will begin tuning in to our broadcast laggards.
A final wild card for broadcasters is the increasing focus by technology
giants on the ubiquitous nature of television. The "Holy Grail" is to develop a
two way interactive and transaction driven economic model for old fashioned
"POTS" (Plain Old Television Stations).
6
<PAGE> 7
FREE RANGE RABBIT
The "Energizer Bunny" is running down. Energizer has lost market share to
current industry leader Gillette's Duracell subsidiary and Rayovac is also
gaining ground. Parent company Ralston Purina is about to free the "Energizer
Bunny" in a spin-off. We believe Energizer will be a stronger competitor as an
independent company and that off on its own, it may attract a predator in the
form of a large branded consumer goods company looking for an entry in the
battery business. Releasing Energizer will also help investors more fully
appreciate the nutrition in Ralston Purina's dominant pet food franchise.
Through the years, Ralston Purina management has done an excellent job
building value and enhancing shareholder returns through large share repurchase
programs. We believe Ralston's parts are worth considerably more than the
current market valuation of the whole and that the decision to spin off
Energizer represents another terrific move by this shareholder sensitive
company.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects
do not necessarily translate into higher stock prices, but they do express a
positive trend which we
believe will develop over time.
Cablevision Systems Corp. (CVC - $70.00 - AMEX) is one of the nation's leading
communications and entertainment companies, with a portfolio of operations that
span state-of-the-art, high-speed multimedia delivery, subscription cable
television services, championship professional sports teams and national cable
television networks. Headquartered in Bethpage, NY, Cablevision serves more than
3.4 million cable customers primarily in three core markets: New York, Boston
and Cleveland. Cablevision is a leader in delivering cutting-edge technological
innovation, such as Optimum TV, to the home. Through its Rainbow Media Holdings
subsidiary, Cablevision manages and develops internationally recognized content
offerings such as the popular national television networks American Movie
Classics, Bravo and The Independent Film Channel. Cablevision has a controlling
interest in New York City's famed Madison Square Garden which includes the arena
complex, the NY Knicks, the NY Rangers and the MSG network. Cablevision operates
Radio City Entertainment and holds a long term lease for Radio City Music Hall,
home of the world famous Radio City Rockettes.
Chris-Craft Industries Inc. (CCN - $47.125 - NYSE), through its 80% ownership of
BHC Communications (BHC - $130.00 - AMEX), is primarily a television
broadcaster. BHC owns and operates UPN affiliated stations in New York (WWOR),
Los Angeles (KCOP) and Portland, Oregon (KPTV). BHC also owns 59% of United
Television (UTVI - $104.875 - Nasdaq), which operates an NBC affiliate, an ABC
affiliate and five UPN affiliates. United Television recently purchased WHSW in
Baltimore for $80 million. The station's call letters were changed to WUTB and
the station became a UPN affiliate. UTVI also acquired WRBW, a UPN affiliate in
Orlando, for $60 million in early July 1998. Chris-Craft's television stations
constitute one of the nation's largest television station groups, reaching
approximately 22% of U.S. households. The Chris-Craft complex is debt free and
strongly positioned to expand its operations with roughly $1.5 billion in cash
and marketable securities.
7
<PAGE> 8
Dana Corp. (DCN - $46.0625 - NYSE) is one of the world's largest independent
suppliers to vehicular, off-highway and industrial manufacturers and related
aftermarkets. Dana produces engine, drive-train and braking components and
systems. Founded in 1904 and based in Toledo, Ohio, the company operates 330
major facilities in 32 countries and employs more than 86,000 people. A
significant portion of the Automotive Aftermarket Group's resources came to Dana
from its acquisition of Echlin.
Liberty Media Group (LMG'A - $36.75 - NYSE) is engaged in businesses which
provide programming services, including production, acquisition and distribution
through all available media formats, and businesses engaged in electronic
retailing, direct marketing and other services. LMG holds interests in
globally-branded entertainment networks such as Discovery Channel, USA, QVC,
Encore and STARZ!. Liberty's assets also include interests in international
video distribution businesses; international telephony and domestic wireless;
plant and equipment manufacturers; and other businesses related to broadband
services. Liberty Media Group Class A and Class B common stock are tracking
stocks of AT&T Corp. (T - $55.8125 - NYSE) and are now traded on the New York
Stock Exchange.
Media General Inc. (MEG'A - $51.00 - AMEX) is a Richmond, Virginia-based
communications company, publishing newspapers throughout the Southeast with
daily circulation of nearly 250,000. Media General operates thirteen network
television stations in Southeastern markets, including Tampa and Jacksonville,
Florida. The relaxation of broadcast station ownership restrictions provided by
the Telecommunications Reform 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. The company produces newsprint from
recycled newspapers at its Garden State Paper Co. In April, MEG'A announced the
sale of its Virginia cable franchises to Cox Communications for $1.4 billion. In
June, MEG'A sold its equity interest in the Denver Post to Media News Group and
redeemed its preferred stock for a total of $92 million.
MediaOne Group Inc. (UMG - $74.375 - NYSE) is one of the nation's leading
broadband services companies. UMG provides more than five million subscribers in
17 states with basic and premium cable television services and has recently
introduced high speed Internet access, telephone services and digital television
in some of its service areas. MediaOne was created from the 1996 union of
telecommunications company MediaOne Group (formerly US West Media Group) and
Continental Cablevision. Headquartered in Englewood, Colorado, the company is
conducting a national upgrade of its hybrid fiber optic/coaxial cable ("HFC")
network to broadband technology which improves traditional cable service and
enables next-generation products and services. The Group's investment interests
include 25% of Time Warner Entertainment (which includes Warner Brothers Studio
and Home Box Office), 24% of PCS Prime Co. and almost 27% of TeleWest plc. The
number three U.S. cable television company recently agreed to be acquired by
AT&T Corp. (T - $55.8125 - NYSE) for $54 billion.
Navistar International Corp. (NAV - $50.00 - NYSE) manufactures and markets
medium and heavy trucks, school buses and mid-range diesel engines in North
America and selected export markets. Navistar has led the U.S. and Canadian
markets in combined sales of medium and heavy trucks and school buses for almost
20 years. The company is also a leading supplier of mid-range diesel engines in
the 160 to 300 horsepower range. The company's products, parts and services are
sold through a network of 1,000 International(R) brand dealer outlets in the
United States, Canada, Brazil and Mexico, and through more than 90 dealers in 75
countries. Navistar provides financing for its customers and distributors
principally through its wholly-owned subsidiary, Navistar Financial Corp.
8
<PAGE> 9
Telephone & Data Systems Inc. (TDS - $73.0625 - AMEX) is a diversified
telecommunications company with established cellular and local telephone
operations and a developing personal communications services ("PCS") business.
TDS provides high quality telecommunications services to three million customers
in 35 states. TDS owns 81.1% of United States Cellular Corp.
(USM - $53.50 - AMEX), the nation's seventh largest cellular telephone company.
It also owns 82.4% of Aerial Communications Inc. (AERL - $13.50 - Nasdaq), TDS's
PCS subsidiary which owns the licenses to provide PCS service in six major
trading areas ("MTAs") encompassing approximately 27.6 million population
equivalents. On December 8, 1998, TDS announced its intent to spin-off its
Aerial stake to existing TDS shareholders on a tax-free basis and focus on its
core wireline and cellular operations. The transaction is expected to close by
the end of the year.
USA Networks Inc. (USAI - $40.125 - Nasdaq), through its subsidiaries, engages
in diversified media and electronic commerce businesses that include: electronic
retailing, ticketing operations and television broadcasting. Chairman and CEO
Barry Diller has brought together under one umbrella: the USA Network, the
Sci-Fi Channel, USA Networks Studios, USA Broadcasting, The Home Shopping
Network and the Ticketmaster Group. The plan is to integrate these assets,
leveraging programming, production capabilities and electronic commerce across
this strong distribution platform.
Viacom Inc. (VIA'A - $44.125 - AMEX), long a major provider of entertainment
"content", has evolved into one of the world's dominant media companies. The
addition of Paramount Communications, Blockbuster Entertainment (acquired in
1994), along with publisher Simon & Schuster, makes Viacom one of the largest
entertainment and publishing companies. Non-core assets are being divested and
debt has been reduced to approximately $8 billion. Viacom is focusing on global
expansion of its media franchises. Viacom is particularly well-positioned in
music (notably MTV) and cable networks (such as Nickelodeon).
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Asset Management Inc.,
the Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and
other current news. You can send us e-mail at [email protected].
9
<PAGE> 10
IN CONCLUSION
In the second quarter of 1999, value reasserted itself and small cap stocks
came roaring back. Both of these forces provided a tailwind for our portfolio.
Looking ahead, we have our reservations regarding the stock market, which, based
on fundamentals, appears to be well above intrinsic value. However, we still see
windows of opportunity, particularly in the small and mid-cap value sectors
where we are most active. We will strive to continue to uncover such
opportunities and maintain a diversified portfolio of what we view as long term
fundamental investment bargains.
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
business day for further information.
Sincerely,
[MARIO J. GABELLI SIGNATURE]
MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer
July 30, 1999
TOP TEN HOLDINGS
JUNE 30, 1999
<TABLE>
<S> <C>
Navistar International
Viacom Inc. Corp.
Media General Inc. Liberty Media Group
Cablevision Systems Corp. USA Networks Inc.
MediaOne Group Inc. Chris-Craft Industries Inc.
Telephone & Data Systems Inc. Dana Corp.
</TABLE>
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.
10
<PAGE> 11
THE GABELLI VALUE FUND INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
COMMON STOCKS-- 88.2%
AGRICULTURE--1.1%
535,000 Archer-Daniels-Midland
Co. ................... $ 8,854,063 $ 8,259,063
85,000 Monsanto Co. ........... 3,767,687 3,352,187
------------ --------------
12,621,750 11,611,250
------------ --------------
AUTOMOTIVE: PARTS AND ACCESSORIES--3.6%
615,000 Dana Corp. ............. 25,918,170 28,328,437
260,000 Modine Manufacturing
Co. ................... 8,282,310 8,466,250
40,000 Superior Industries
International Inc. .... 997,256 1,092,500
------------ --------------
35,197,736 37,887,187
------------ --------------
AVIATION: PARTS AND SERVICES--0.4%
62,000 Barnes Group Inc. ...... 1,428,531 1,348,500
240,000 Fairchild Corp., Cl.
A+..................... 4,610,427 3,060,000
------------ --------------
6,038,958 4,408,500
------------ --------------
BROADCASTING--4.9%
160,000 Ackerley Group Inc. .... 2,481,450 2,910,000
628,520 Chris-Craft Industries
Inc.+.................. 18,161,053 29,619,005
165,000 Gray Communications
Systems Inc., Cl. B.... 2,336,155 2,330,625
135,000 Grupo Televisa SA,
GDR+................... 2,952,776 6,049,687
150,000 Liberty Corp. .......... 4,687,887 8,175,000
250,000 Paxson Communications
Corp., Cl. A+.......... 2,009,590 3,375,000
------------ --------------
32,628,911 52,459,317
------------ --------------
BUSINESS SERVICES--2.2%
150,000 Berlitz International
Inc., New+............. 2,645,075 2,756,250
1,035,000 Cendant Corp. .......... 19,161,969 21,217,500
------------ --------------
21,807,044 23,973,750
------------ --------------
CABLE--12.2%
940,000 Cablevision Systems
Corp., Cl. A+.......... 11,708,128 65,800,000
875,000 MediaOne Group Inc. .... 22,227,429 65,078,125
------------ --------------
33,935,557 130,878,125
------------ --------------
COMMUNICATIONS EQUIPMENT--0.3%
20,000 Nortel Networks
Corp. ................. 374,250 1,736,250
30,000 Scientific-Atlanta
Inc. .................. 545,488 1,080,000
------------ --------------
919,738 2,816,250
------------ --------------
COMPUTER SOFTWARE AND SERVICES--0.1%
200,000 Tyler Technologies
Inc. .................. 438,050 1,375,000
------------ --------------
CONSUMER PRODUCTS--2.5%
500,000 Carter-Wallace Inc. .... 7,483,781 9,093,750
280,000 General Cigar Holdings
Inc. .................. 3,144,104 2,187,500
168,000 General Cigar Holdings
Inc., Cl. B+ (a)....... 1,414,002 1,312,500
30,000 Gucci Group NV.......... 1,961,657 2,100,000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
150,000 Hartmarx Corp.+......... $ 1,089,249 $ 628,125
10,000 National Presto
Industries Inc. ....... 353,156 382,500
310,000 Ralston Purina Group.... 6,868,758 9,435,625
41,700 Syratech Corp.+......... 983,310 646,350
85,000 Wolverine World Wide
Inc. .................. 855,819 1,190,000
------------ --------------
24,153,836 26,976,350
------------ --------------
CONSUMER SERVICES--0.7%
450,000 Rollins Inc. ........... 7,930,764 7,171,875
------------ --------------
DIVERSIFIED INDUSTRIAL--0.7%
50,000 Ampco-Pittsburgh
Corp. ................. 250,018 640,625
100,000 GenTek Inc.+............ 987,458 1,387,500
225,000 Katy Industries Inc. ... 1,943,459 2,925,000
60,000 Lamson & Sessions
Co.+................... 355,813 360,000
17,000 Tyco International
Ltd. .................. 1,445,840 1,610,750
136,000 WHX Corp. .............. 1,585,294 892,500
------------ --------------
6,567,882 7,816,375
------------ --------------
ELECTRONICS--0.1%
50,000 Watkins-Johnson Co. .... 1,195,338 1,475,000
------------ --------------
ENERGY AND UTILITIES--2.6%
575,000 Citizens Utilities Co.,
Cl. B+................. 5,618,609 6,396,875
85,000 Orange & Rockland
Utilities Inc. ........ 4,951,913 4,967,188
620,000 PennzEnergy Co. ........ 11,050,807 10,346,250
110,000 Pennzoil-Quaker State
Co. ................... 2,553,113 1,650,000
156,000 Southwest Gas Corp. .... 3,027,730 4,465,500
------------ --------------
27,202,172 27,825,813
------------ --------------
ENTERTAINMENT--16.3%
180,000 Ascent Entertainment
Group Inc.+............ 1,858,036 2,542,500
150,000 GC Companies Inc.+...... 5,696,631 5,362,500
890,000 Liberty Media Group, Cl.
A+..................... 8,224,421 32,707,500
800,000 USA Networks Inc.+...... 10,751,703 32,100,000
2,295,000 Viacom Inc., Cl. A+..... 37,064,225 101,266,875
------------ --------------
63,595,016 173,979,375
------------ --------------
EQUIPMENT AND SUPPLIES--6.7%
40,000 Deere & Co. ............ 968,254 1,585,000
200,000 Flowserve Corp. ........ 4,898,692 3,787,500
130,000 Gerber Scientific
Inc. .................. 1,111,661 2,868,125
235,000 Hussmann International
Inc. .................. 1,899,946 3,892,187
100,000 International Comfort
Products Corp. ........ 1,148,750 1,137,500
768,000 Navistar International
Corp. ................. 20,352,000 38,400,000
240,000 Pittway Corp., Cl. A.... 492,592 8,205,000
75,000 Sequa Corp., Cl. A+..... 2,704,459 5,250,000
24,500 Sequa Corp., Cl. B+..... 1,203,320 1,751,750
2,500 Smith (A.O.) Corp. ..... 62,781 70,000
7,500 Smith (A.O.) Corp., Cl.
A...................... 208,100 206,250
210,000 Watts Industries
Inc. .................. 2,959,243 4,029,375
------------ --------------
38,009,798 71,182,687
------------ --------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
THE GABELLI VALUE FUND INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES--2.7%
270,000 American Bankers
Insurance Group
Inc. .................. $ 15,616,265 $ 14,698,125
30,000 Chase Manhattan
Corp. ................. 2,287,476 2,598,750
12,000 Lehman Brothers
Holdings Inc. ......... 297,600 747,000
40,000 Mellon Bank Corp. ...... 1,402,313 1,455,000
100,000 Merrill Lynch & Co. .... 7,038,314 7,993,750
100,000 Pioneer Group Inc. ..... 2,150,471 1,725,000
------------ --------------
28,792,439 29,217,625
------------ --------------
FOOD AND BEVERAGE--3.5%
32,000 Advantica Restaurant
Group Inc.+............ 298,764 110,000
60,000 Celestial Seasonings
Inc.+.................. 1,035,180 1,290,000
168,000 Corn Products
International Inc. .... 4,999,078 5,113,500
290,000 PepsiCo Inc. ........... 10,198,384 11,219,375
165,000 Seagram Co. ............ 7,926,800 8,311,875
640,000 Whitman Corp. .......... 7,692,913 11,520,000
------------ --------------
32,151,119 37,564,750
------------ --------------
HEALTH CARE--0.4%
300,000 IVAX Corp.+............. 2,829,106 4,237,500
------------ --------------
HOTELS AND GAMING--2.9%
600,000 Aztar Corp.+............ 4,191,822 5,512,500
262,000 Gaylord Entertainment
Co., Cl. A............. 7,611,117 7,860,000
550,000 Hilton Hotels Corp. .... 8,380,908 7,803,125
1,270,000 Ladbroke Group plc,
ADR.................... 5,855,616 5,039,627
220,000 Mirage Resorts Inc.+.... 3,629,524 3,685,000
110,000 Park Place
Entertainment Corp.+... 732,419 1,065,625
------------ --------------
30,401,406 30,965,877
------------ --------------
METALS AND MINING--0.4%
40,000 Barrick Gold Corp. ..... 880,974 775,000
300,000 Echo Bay Mines Ltd.+.... 1,210,760 431,250
80,000 Homestake Mining Co. ... 952,438 655,000
55,000 Placer Dome Inc. ....... 651,513 649,687
365,000 Royal Oak Mines Inc.+... 533,235 14,600
1,299,000 TVX Gold Inc.+.......... 1,931,445 1,299,000
------------ --------------
6,160,365 3,824,537
------------ --------------
PUBLISHING--10.1%
25,000 McGraw-Hill Companies
Inc. .................. 771,004 1,348,438
1,650,000 Media General Inc.,
Cl. A (b).............. 33,274,697 84,150,000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
115,000 Meredith Corp. ......... $ 2,294,407 $ 3,981,875
315,000 Penton Media Inc. ...... 3,569,545 7,638,750
250,000 Reader's Digest
Association Inc., Cl.
B...................... 6,210,153 9,375,000
20,000 Tribune Co. ............ 1,189,125 1,742,500
------------ --------------
47,308,931 108,236,563
------------ --------------
REAL ESTATE--1.2%
730,000 Catellus Development
Corp.+................. 9,226,536 11,315,000
130,000 Griffin Land & Nurseries
Inc.+.................. 1,463,689 1,543,750
------------ --------------
10,690,225 12,858,750
------------ --------------
RETAIL--3.0%
1,140,000 AutoNation Inc.+........ 15,504,862 20,306,250
20,000 Burlington Coat Factory
Warehouse Corp. ....... 288,357 386,250
140,000 Food Lion Inc., Cl. A... 1,474,689 1,662,500
63,600 Ingles Markets Inc., Cl.
A...................... 813,890 969,900
140,000 Lillian Vernon Corp. ... 2,004,440 1,820,000
265,000 Neiman Marcus Group
Inc.+.................. 5,493,348 6,807,188
------------ --------------
25,579,586 31,952,088
------------ --------------
SATELLITE--0.7%
150,000 COMSAT Corp. ........... 3,501,997 4,875,000
145,000 Loral Space &
Communications Ltd.+... 2,557,395 2,610,000
132,600 TCI Satellite
Entertainment Inc., Cl.
A+..................... 1,104,453 389,512
------------ --------------
7,163,845 7,874,512
------------ --------------
SPECIALTY CHEMICALS--0.8%
20,000 Dexter Corp. ........... 582,231 816,250
250,000 Ferro Corp. ............ 4,571,499 6,875,000
100,000 General Chemical Group
Inc. .................. 330,642 312,500
------------ --------------
5,484,372 8,003,750
------------ --------------
TELECOMMUNICATIONS--2.5%
45,000 AT&T Corp. ............. 554,887 2,511,563
172,462 Commonwealth Telephone
Enterprises Inc.+...... 3,170,439 6,973,932
100,000 RCN Corp.+.............. 602,133 4,162,500
110,000 Rogers Communications
Inc., Cl. B+........... 1,827,648 1,780,625
200,000 US West Inc. ........... 11,558,190 11,750,000
------------ --------------
17,713,297 27,178,620
------------ --------------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE> 13
THE GABELLI VALUE FUND INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
WIRELESS COMMUNICATIONS--5.6%
100,000 Rogers Cantel Mobile
Communications Inc.,
Cl. B.................. $ 1,224,507 $ 1,643,750
250,000 Telecom Italia Mobile
SpA.................... 332,242 1,491,432
770,000 Telephone & Data
Systems Inc. .......... 33,394,015 56,258,125
------------ --------------
34,950,764 59,393,307
------------ --------------
TOTAL COMMON STOCKS..... 561,468,005 943,144,733
------------ --------------
PREFERRED STOCKS--0.5%
PUBLISHING--0.5%
155,500 News Corp. Ltd., ADR
Preference Shares...... 2,390,998 4,907,969
------------ --------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C> <C>
CORPORATE BONDS--0.0%
ENTERTAINMENT--0.0%
$ 497,000 Viacom Inc., Sub. Deb.
8.00%, 07/07/06........ 322,429 511,910
------------ --------------
U.S. GOVERNMENT OBLIGATIONS--7.1%
76,632,000 U.S.Treasury Bills,
4.50% to 4.80%++,
due 08/26/99 to
09/30/99............... 75,873,701 75,877,687
------------ --------------
TOTAL
INVESTMENTS--95.8%..... $640,055,133 1,024,442,299
============
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-----
<C> <S> <C> <C>
OTHER ASSETS AND
LIABILITIES (NET)--4.2%.............. $ 44,587,564
--------------
NET ASSETS--100.0%
(54,609,700 shares outstanding)...... $1,069,029,863
==============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE...................... $19.58
=====
MAXIMUM OFFERING PRICE PER SHARE
($19.58/.945, based on maximum sales
charge of 5.5% of the offering price
at June 30, 1999.)................... $20.72
=====
For Federal tax purposes:
Aggregate cost........................ $ 640,055,133
==============
Gross unrealized appreciation......... $ 399,634,141
Gross unrealized depreciation......... (15,246,975)
--------------
Net unrealized appreciation........... $ 384,387,166
==============
</TABLE>
- ------------------------------
(a) Security fair valued as determined by the Board of Directors.
(b) Security considered an affiliated holding because the Fund owns at least
5% of the outstanding shares.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR--American Depositary Receipt.
GDR--Global Depositary Receipt.
See accompanying notes to financial statements.
13
<PAGE> 14
THE GABELLI VALUE FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $640,055,133)..... $1,024,442,299
Foreign currency, at value (Cost $17,072)..... 17,010
Dividends and interest receivable............. 150,956
Receivable for investments sold............... 52,372,451
Receivable for Fund shares sold............... 1,349,538
--------------
TOTAL ASSETS.................................. 1,078,332,254
--------------
LIABILITIES:
Payable for investments purchased............. 7,560,581
Payable for Fund shares redeemed.............. 376,703
Payable for investment advisory fees.......... 841,311
Payable for distribution fees................. 142,432
Payable to custodian.......................... 137,634
Payable for shareholder services fees......... 87,543
Other accrued expenses........................ 156,187
--------------
TOTAL LIABILITIES............................. 9,302,391
--------------
NET ASSETS applicable to 54,609,700 shares
outstanding................................. $1,069,029,863
==============
NET ASSETS CONSIST OF:
Shares of capital stock, at par value......... $ 54,610
Additional paid-in capital.................... 606,298,662
Accumulated net investment loss............... (2,623,444)
Accumulated net realized gain on investments,
futures contracts and foreign currency
transactions................................ 80,912,931
Net unrealized appreciation on investments and
foreign currency transactions............... 384,387,104
--------------
TOTAL NET ASSETS.............................. $1,069,029,863
==============
NET ASSET VALUE and redemption price per share
($1,069,029,863 / 54,609,700 shares
outstanding; 300,000,000 shares authorized
of $0.001 par value)........................ $19.58
=====
Maximum offering price per share ($19.58 /
.945, based on maximum sales charge of 5.5%
of the offering price at June 30, 1999)..... $20.72
=====
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes of $2,249)..... $ 2,831,691
Interest....................................... 839,968
------------
TOTAL INVESTMENT INCOME........................ 3,671,659
------------
EXPENSES:
Investment advisory fees....................... 4,540,040
Distribution fees.............................. 1,135,010
Shareholder services fees...................... 256,384
Shareholder communications expenses............ 121,682
Custodian fees................................. 91,780
Directors' fees................................ 41,898
Legal and audit fees........................... 36,226
Miscellaneous expenses......................... 72,083
------------
TOTAL EXPENSES................................. 6,295,103
------------
NET INVESTMENT LOSS............................ (2,623,444)
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS,
FUTURES CONTRACTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments, futures
contracts and foreign currency
transactions................................. 79,129,950
Net realized gain on investments in securities
of affiliated issuers........................ 774,663
Net change in unrealized appreciation on
investments, futures contracts and
foreign currency transactions................ 101,183,252
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, FUTURES CONTRACTS AND
FOREIGN CURRENCY TRANSACTIONS................ 181,087,865
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $178,464,421
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
---------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment loss...................................... $ (2,623,444) $ (3,003,546)
Net realized gain on investments, futures contracts and
foreign currency transactions.......................... 79,904,613 71,122,721
Net change in unrealized appreciation on investments,
futures contracts and
foreign currency transactions.......................... 101,183,252 78,651,758
-------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..... 178,464,421 146,770,933
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments......................... -- (67,357,159)
-------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS...................... -- (67,357,159)
-------------- ------------
CAPITAL SHARE TRANSACTIONS:
Net increase in net assets from capital share
transactions........................................... 91,753,181 122,851,446
-------------- ------------
NET INCREASE IN ASSETS................................... 270,217,602 202,265,220
NET ASSETS:
Beginning of period...................................... 798,812,261 596,547,041
-------------- ------------
End of period............................................ $1,069,029,863 $798,812,261
============== ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE> 15
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Value Fund Inc. (the "Fund") was organized on July
20, 1989 as a Maryland corporation. The Fund is a non-diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is long term
capital appreciation. The Fund commenced investment operations on September 29,
1989.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market valued according to the broadest
and most representative market, as determined by Gabelli Funds, LLC (the
successor to Gabelli Funds, Inc. as investment adviser) (the "Adviser").
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board of Directors.
Short term debt securities with remaining maturities of 60 days or less are
valued at amortized cost, unless the Directors determine such does not reflect
the securities' fair value, in which case these securities will be valued at
their fair value as determined by the Directors. Short term debt instruments
having a greater maturity are valued at the highest bid price obtained from a
dealer maintaining an active market in those securities. Options are valued at
the last sale price on the exchange on which they are listed. If no sales of
such options have taken place that day, they will be valued at the mean between
their closing bid and asked prices.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Bank of
New York, with member banks of the Federal Reserve System or with other brokers
or dealers that meet credit guidelines established by the Directors. Under the
terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. The Fund will always
receive and maintain securities whose market value, including accrued interest,
will be at least equal to 100% of the dollar amount invested by the Fund in each
agreement. The Fund will make payment for such securities only upon physical
delivery or upon evidence of book entry transfer of the collateral to the
account of the custodian. To the extent that any repurchase transaction exceeds
one business day, the value of the collateral is marked-to-market on a daily
basis to maintain the adequacy of the collateral. If the seller defaults and the
value of the collateral declines or if bankruptcy
15
<PAGE> 16
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. At June 30, 1999, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/ depreciation on
investments and foreign currency transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of the Fund
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
16
<PAGE> 17
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
officers and Directors of the Fund who are its affiliates.
4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended June 30, 1999, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $1,135,010, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months
ended June 30, 1999, other than short term securities, aggregated $351,447,629
and $350,663,559, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 1999, the
Fund paid brokerage commissions of $421,259 to Gabelli & Company, Inc. and its
affiliates. During the six months ended June 30, 1999, Gabelli & Company, Inc.
informed the Fund that it received $203,983 from investors representing
commissions (sales charges and underwriting fees) on sales of Fund shares.
7. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold............................................ 29,288,248 $ 529,773,312 27,523,248 $ 432,994,065
Shares issued upon reinvestment of dividends........... -- -- 3,911,560 60,786,193
Shares redeemed........................................ (24,370,613) (438,020,131) (23,466,641) (370,928,812)
----------- ------------- ----------- -------------
Net increase....................................... 4,917,635 $ 91,753,181 7,968,167 $ 122,851,446
=========== ============= =========== =============
</TABLE>
17
<PAGE> 18
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS. The 1940 Act defines
affiliated issuers as those in which the Fund's holdings of an issuer represent
5% or more of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of these issuers during the six months
ended June 30, 1999, is set forth below:
<TABLE>
<CAPTION>
PERCENT
OWNED
BEGINNING SHARES ENDING REALIZED DIVIDEND VALUE AT OF SHARES
SHARES SOLD SHARES GAIN INCOME JUNE 30, 1999 OUTSTANDING
--------- ------- --------- -------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Media General, Inc.,
CI.A..................... 1,678,000 (28,000) 1,650,000 $774,663 $498,600 $84,150,000 6.26%
======== ======== ===========
</TABLE>
9. NEW SHARE CLASSES. On February 17, 1999, the Board of Directors of the Fund
approved a Rule 18f-3 Multi-Class Plan relating to the creation of two
additional classes of shares of the Fund -- Class B Shares and Class C Shares
(the "New Share Classes"). The existing class of shares was redesignated as
Class A Shares. In addition, the Board has also approved an Amended and Restated
Distribution Agreement, Rule 12b-1 plans for each of the New Share Classes and
an Amended and Restated Plan of Distribution for the existing class of shares
(Class A Shares) to be effective upon the commencement of the offering of the
New Share Classes. The New Share Classes are currently not being offered to the
public.
18
<PAGE> 19
THE GABELLI VALUE FUND INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value,
beginning of period............. $ 16.08 $ 14.30 $ 11.52 $ 11.61 $ 10.49 $ 12.09
---------- -------- -------- -------- -------- --------
Net investment income/(loss)...... (0.05) (0.05) (0.05) (0.02) 0.05 0.09
Net realized and unrealized
gain/(loss) on investments...... 3.55 3.32 5.55 1.04 2.30 (0.09)
---------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS...................... 3.50 3.27 5.50 1.02 2.35 0.00
---------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income............. -- -- -- -- (0.05) (0.09)
In excess of net investment
income.......................... -- -- -- -- -- (0.00)(a)
Net realized gain on
investments..................... -- (1.49) (2.72) (1.10) (1.18) (1.50)
In excess of net realized gain
on investments.................. -- -- -- -- -- (0.01)
Paid-in capital................... -- -- -- (0.01) -- --
---------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS............... -- (1.49) (2.72) (1.11) (1.23) (1.60)
---------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.... $ 19.58 $ 16.08 $ 14.30 $ 11.52 $ 11.61 $ 10.49
========== ======== ======== ======== ======== ========
TOTAL RETURN+..................... 21.8% 23.2% 48.2% 8.7% 22.5% 0.0%
========== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's).......................... $1,069,029 $798,812 $596,547 $460,836 $486,144 $436,629
Ratio of net investment
income/(loss) to average
net assets...................... (0.58)%(b) (0.41)% (0.45)% (0.12)% 0.42% 0.73%
Ratio of operating expenses
to average net assets........... 1.39%(b) 1.40% 1.42% 1.40% 1.50% 1.50%
Portfolio turnover rate........... 42% 46% 44% 37% 65% 67%
</TABLE>
- ---------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends and does not reflect any applicable
sales charges. Total return for the period of less than one year is not
annualized.
(a) Amount represents less than $0.005 per share.
(b) Annualized.
See accompanying notes to financial statements.
19
<PAGE> 20
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.)
<TABLE>
<S> <C>
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Robert J. Morrissey
Chairman and Chief Attorney-at-Law
Investment Officer Morrissey, Hawkins & Lynch
Gabelli Asset Management
Inc.
Bill Callaghan Karl Otto Pohl
President Former President
Bill Callaghan Associates Deutsche Bundesbank
Felix J. Christiana Anthony R. Pustorino
Former Senior Vice President Certified Public Accountant
Dollar Dry Dock Savings Bank Professor, Pace University
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.
- ---------------------------------------
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.
- ---------------------------------------
GAB409Q299SR
[GRAPHIC]
THE
GABELLI
VALUE
FUND
INC.
SEMI-ANNUAL REPORT
JUNE 30, 1999
