--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
--------------------------------------------------------------------------------
September 30, 2000
--------------------------------------------------------------------------------
Value Line
Emerging
Opportunities
Fund, Inc.
[LOGO]
------------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
To Our Value Line
--------------------------------------------------------------------------------
To Our Shareholders:
The Value Line Emerging Opportunities Fund posted a total return of 2.80% for
the six months ended September 30, 2000, which compared well with the total
return of -D3.29% by the Fund's benchmark, the unmanaged Russell 2000 Index.
This was a particularly rough period for the stock market, with the NASDAQ
Composite Index falling 19%. But our disciplined investment approach continues
to pay off for the Fund. We invest in stocks with strong earnings momentum and
strong relative price momentum. When a stockholding fails to meet these
criteria, we sell it quickly. The Fund holds a very diversified portfolio of
approximately 400 stocks in many different industries. Many of these are in the
volatile technology sector, but spread across different subsectors such as
software, semiconductors, the internet, and telecommunications. We usually
invest only 0.2% of assets in a new holding; successful investments, however,
grow to over 1% of assets before we begin to trim them back. We generally buy
companies with market capitalizations of under $2 billion, but we don't sell
stocks just because they grow into large-cap firms. At this writing, half of the
Fund's stocks have a market cap under $1.5 billion.
The Fund's top holdings at the end of the latest period included Calpine Corp.,
an energy-provider purchased in 1999 at about $18 a share that closed the period
at $104; Applied Micro Circuits, a semiconductor producer purchased in 1998 at
$5.43 a share that closed the period at $207; Mercury Interactive, an Internet
software firm purchased in 1997 at $5.25 a share that closed the period at $156;
and Newport Corp., a components provider to the fiber optics industry purchased
less than a year ago at $12, which closed the period at $159. These were the
only holdings that individually made up more than 1% of assets.
We will maintain our disciplined approach with an eye toward maximizing returns
while minimizing risk. Thank you for investing with us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
October 26, 2000
--------------------------------------------------------------------------------
2
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Emerging Opportunities Fund Shareholders
--------------------------------------------------------------------------------
Economic Observations
The U.S. economy is now clearly proceeding along a slower growth track as we
move through the final months of the year. Evidence of this deceleration in
business activity can be found in the most recent figures on manufacturing,
retail spending, and employment. Overall, we estimate that GDP growth will
average 3%, or so, over the balance of the year. Thereafter, we would expect the
pace of economic activity to hold at these comparatively restrained levels
through 2001, as the succession of interest-rate hikes voted for by the Federal
Reserve Board over the past year and a half continues to have the hoped-for
effect of stabilizing the economy at comfortably lower growth levels.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with sustained increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, a moderate increase in cost pressures could still
evolve over the next few quarters, particularly if energy prices continue their
uncontrolled ascent for several months and the aforementioned moderation in
economic growth fails to continue into 2001, two events that we do not currently
expect to take place.
Meanwhile, the Federal Reserve, taking note of the current slower pace of
business activity and the comparatively muted inflation figures, is likely to
maintain a relatively stable monetary stance over the next several quarters.
Indeed, should oil prices reverse course and move back down to the
$25-$30-a-barrel level, as seems logical given the expected moderation in
underlying demand, or the economy slows more then we now expect, it is
conceivable that the central bank's next move could be to lower interest rates
sometime next year.
Performance Data:*
Average
Annual Total
Return
---------
1 year ended September 30, 2000.............. 67.62%
5 years ended September 30, 2000............. 20.38%
From June 23, 1993+ to
September 30, 2000......................... 20.79%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return include dividends
reinvested and capital gains distributions accepted in shares. The investment
return and principal value of an investment will fluctuate so that an
investment, when redeemed, may be worth more or less than its original cost.
--------------------------------------------------------------------------------
3
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments (unaudited)
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
COMMON STOCKS (100.2%)
ADVERTISING (0.8%)
3,500 ADVO, Inc.*...................... $ 115,500
3,000 Direct Focus, Inc.*.............. 119,250
1,700 Omnicom Group, Inc. ............. 123,994
2,000 True North
Communications, Inc. .......... 71,500
----------
430,244
AEROSPACE/
DEFENSE (1.2%)
3,125 Aeroflex Inc.*................... 151,953
1,200 Alliant Techsystems, Inc.*....... 98,550
2,600 Newport News
Shipbuilding, Inc. ............ 112,775
4,000 Precision Castparts Corp. ....... 153,500
3,900 Teledyne Technologies Inc.*...... 113,587
----------
630,365
AIR TRANSPORT (0.4%)
3,000 Atlantic Coast Airlines
Holdings, Inc.*................ 96,563
2,200 SkyWest, Inc. ................... 112,750
----------
209,313
APPAREL (1.0%)
3,400 Columbia Sportswear Co.*......... 155,975
5,000 Gildan Activewear, Inc.
Class "A"*..................... 166,875
3,700 Guess ? Inc.*.................... 41,625
9,000 McNaughton Apparel
Group, Inc.*................... 147,375
----------
511,850
BANK (0.5%)
6,300 East West Bancorp, Inc. ......... 123,244
2,700 GBC Bancorp...................... 91,969
3,100 W Holding Company, Inc. ......... 31,581
----------
246,794
BANK--MIDWEST (0.3%)
3,500 TCF Financial Corp. ............. 131,688
BEVERAGE--
ALCOHOLIC (0.4%)
1,800 Constellation Brands, Inc.
Class "A"*..................... 97,762
1,500 Coors (Adolph) Co.
Class "B"...................... 94,781
----------
192,543
BUILDING
MATERIALS (0.5%)
5,000 Insituform Technologies,
Inc. Class "A"*................ 168,125
2,700 Trex Co., Inc.*.................. 81,844
----------
249,969
CABLE TV (0.4%)
3,600 EchoStar Communications
Corp. Class "A"*............... 189,900
CHEMICAL--
DIVERSIFIED (0.3%)
3,000 Cabot Corp. ..................... 95,062
1,500 Millipore Corp................... 72,656
----------
167,718
CHEMICAL--
SPECIALTY (1.2%)
4,800 Celgene Corp.*................... 285,600
7,000 Hexcel Corp.*.................... 93,625
2,200 OM Group, Inc.................... 95,975
2,700 Park Electrochemical Corp........ 150,188
----------
625,388
COMPUTER &
PERIPHERALS (4.0%)
2,200 Actel Corp.*..................... 79,062
3,600 Avocent Corporation*............. 198,450
2,700 Brooktrout, Inc.*................ 88,931
7,500 Catapult Communications
Corp.*......................... 139,688
--------------------------------------------------------------------------------
4
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
September 30, 2000
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
COMPUTER &
PERIPHERALS (4.0%)
(Continued)
2,000 Concurrent Computer Corp.*....... $ 39,000
2,000 Emulex Corp.*.................... 245,000
3,200 InFocus Corporation*............. 169,600
2,800 MRV Communications, Inc.*........ 126,875
6,750 NYFIX, Inc.*..................... 302,062
2,100 Rainbow Technologies, Inc.*...... 74,288
6,000 Silicon Storage
Technology, Inc.*.............. 163,125
2,280 Sun Microsystems, Inc.*.......... 266,190
2,400 Tech Data Corp.*................. 102,600
2,000 Zebra Technologies Corp.
Class "A"*..................... 96,125
----------
2,090,996
COMPUTER SOFTWARE
& SERVICES (9.3%)
3,000 Acterna Corp.*................... 91,125
8,000 Actuate Corp.*................... 276,375
1,600 Adobe Systems, Inc............... 248,400
2,200 Advent Software, Inc.*........... 153,725
6,500 Ansoft Corp.*.................... 86,125
4,000 AremisSoft Corp.*................ 150,000
2,200 Aspen Technology, Inc.*.......... 99,275
4,000 BSQUARE Corporation*............. 62,000
2,000 Business Objects S.A. (ADR)*..... 226,125
4,000 CACI International, Inc.
Class "A"*..................... 85,750
6,200 Carreker Corporation*............ 120,900
2,800 Cognizant Technology
Solutions Corp. Class "A"*..... 109,200
3,400 Cognos Inc.*..................... 138,550
2,325 Comverse Technology, Inc.*....... 251,100
3,750 Dendrite International, Inc.*.... 100,547
1,400 Documentum, Inc.*................ 113,662
3,500 Hall Kinion & Associates, Inc.*.. 99,531
3,200 Henry (Jack) & Associates, Inc... 138,800
1,600 IONA Technologies
PLC (ADR)*..................... 111,200
1,300 MMC Networks, Inc.*.............. 164,450
2,600 Manhattan Associates, Inc.*...... 159,250
4,200 MapInfo Corp.*................... 131,513
4,000 Mercury Interactive Corp.*....... 627,000
1,000 Micromuse, Inc.*................. 200,937
2,000 National Instruments Corp.*...... 88,250
1,800 Paychex, Inc..................... 94,500
2,800 Rational Software Corp.*......... 194,250
5,000 Rimage Corp.*.................... 93,750
2,200 ScanSource, Inc.*................ 117,425
3,000 Siebel Systems, Inc.*............ 333,938
----------
4,867,653
DIVERSIFIED
COMPANIES (0.5%)
900 SPX Corp.*....................... 127,744
700 Textron, Inc..................... 32,287
1,400 Tyco International Ltd........... 72,625
1,500 Valmont Industries, Inc.......... 29,813
----------
262,469
DRUG (9.3%)
3,000 Albany Molecular
Research, Inc.*................ 168,562
3,600 Andrx Group*..................... 336,150
2,000 CV Therapeutics, Inc.*........... 155,563
2,200 Cerus Corp.*..................... 122,100
3,000 CIMA Labs, Inc.*................. 156,188
2,200 COR Therapeutics, Inc.*.......... 137,087
7,000 Corvas International, Inc.*...... 162,750
5,000 Dura Pharmaceuticals, Inc.*...... 176,875
1,400 Forest Laboratories, Inc.*....... 160,562
3,100 GelTex Pharmaceuticals, Inc.*.... 145,119
1,000 Genentech, Inc.*................. 185,688
1,400 ImClone Systems, Inc.*........... 163,887
5,550 Ivax Corp.*...................... 255,300
3,000 K-V Pharmaceutical Co.
Class "A"*..................... 105,375
11,671 King Pharmaceuticals, Inc.*...... 390,249
2,200 Millennium
Pharmaceuticals, Inc. *........ 321,337
5,400 NPS Pharmaceuticals, Inc.*....... 305,438
4,000 Neurocrine Biosciences, Inc.*.... 180,000
3,400 Noven Pharmaceuticals, Inc.*..... 145,350
3,300 OSI Pharmaceuticals, Inc.*....... 231,000
--------------------------------------------------------------------------------
5
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments (unaudited)
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
DRUG (9.3%)(Continued)
4,700 PharmaNetics, Inc.*.............. $ 89,300
3,232 Shire Pharmaceuticals Group
PLC (ADR)*..................... 166,852
6,500 Targeted Genetics Corp.*......... 77,187
7,200 Taro Pharmaceutical
Industries, Ltd.*.............. 128,700
4,700 Titan Pharmaceuticals, Inc.*..... 305,500
6,500 Virologic, Inc.*................. 109,688
----------
4,881,807
EDUCATIONAL SERVICES
(1.4%)
2,700 Apollo Group, Inc. Class "A"*.... 107,663
3,000 Career Education Corp.*.......... 133,500
2,700 Corinthian Colleges, Inc.*....... 159,300
2,000 Edison Schools, Inc. Class "A"* 63,500
3,000 Learning Tree
International, Inc.*........... 142,875
6,000 PLATO Learning, Inc.*............ 123,656
----------
730,494
ELECTRICAL
EQUIPMENT (3.2%)
4,000 AAON, Inc.*...................... 96,000
8,000 Alpha Technologies
Group, Inc.*................... 120,000
3,800 Belden, Inc...................... 89,775
4,000 C&D Technologies, Inc............ 227,000
5,400 Cable Design
Technologies Corp.*............ 131,287
3,000 Cerprobe Corp.*.................. 44,250
5,000 Lamson & Sessions Co.*........... 59,375
3,300 Merix Corp.*..................... 213,881
6,600 Power-One, Inc.*................. 399,403
3,000 SIPEX Corp.*..................... 126,188
1,500 Technitrol, Inc.................. 151,500
----------
1,658,659
ELECTRIC UTILITY--
CENTRAL (0.5%)
2,000 AES Corp. (The)*................. 137,000
2,700 Cleco Corp....................... 126,225
----------
263,225
ELECTRIC UTILITY--
WEST (1.5%)
7,600 Calpine Corp.*................... 793,250
ELECTRONICS (7.8%)
2,200 Adaptive Broadband Corp.*........ 42,900
4,500 All American
Semiconductor, Inc.*........... 90,844
2,200 Alpha Industries, Inc.*.......... 74,937
2,600 Amphenol Corp. Class "A"*........ 148,038
1,700 Anaren Microwave, Inc.*.......... 230,562
2,400 Arrow Electronics, Inc.*......... 81,750
3,400 Artesyn Technologies, Inc.*...... 99,025
2,600 Avnet, Inc....................... 73,775
6,000 Daktronics, Inc.*................ 81,000
1,400 Exar Corp.*...................... 169,400
4,500 FEI Company*..................... 97,594
2,415 Flextronics International Ltd.*.. 198,332
3,300 Frequency Electronics, Inc....... 75,702
2,000 Gemstar-TV Guide
International, Inc.*........... 174,375
2,800 Harman International
Industries, Inc................ 109,480
6,000 Herley Industries, Inc.*......... 136,125
8,000 Hytek Microsystems, Inc.*........ 105,000
2,750 Interlink Electronics*........... 53,281
8,500 M-Wave, Inc.*.................... 221,531
2,600 Micrel, Inc.*.................... 174,200
5,000 Nu Horizons Electronics Corp.*... 139,063
6,300 Planar Systems, Inc.*............ 117,337
2,000 Plantronics, Inc.*............... 76,000
3,200 Plexus Corp.*.................... 225,600
6,000 Richardson Electronics, Ltd...... 100,500
3,800 Rogers Corp.*.................... 120,175
3,900 Symbol Technologies, Inc......... 140,156
5,000 3 D Systems Corp.*............... 93,750
1,999 Three-Five Systems, Inc.*........ 58,471
6,000 Titan Corp.*..................... 99,000
5,000 Universal Electronics Inc.*...... 120,937
5,000 Valence Technology, Inc.*........ 86,250
5,000 Viasystems Group, Inc.*.......... 85,000
3,000 Virata Corporation*.............. 198,375
----------
4,098,465
--------------------------------------------------------------------------------
6
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
September 30, 2000
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
ENTERTAINMENT (0.6%)
800 Clear Channel
Communications, Inc.*.......... $ 45,200
2,000 Emmis Communications
Corp. Class "A"*............... 49,500
1,500 Entercom Communications
Corp.*......................... 44,906
4,700 Liberty Satellite & Technology,
Inc. Class "A"*................ 49,938
1,600 Univision Communications,
Inc. Class "A"*................ 59,800
1,302 Viacom, Inc. Class "B"*.......... 76,167
----------
325,511
ENVIRONMENTAL (0.3%)
100 Proton Energy Systems, Inc.*..... 2,862
3,000 TRC Companies, Inc.*............. 51,146
3,900 Tetra Tech, Inc.*................ 111,394
----------
165,402
FINANCIAL SERVICES (2.1%)
4,500 AmeriCredit Corp.*............... 129,656
2,700 CompuCredit Corp.*............... 151,453
3,000 Countrywide Credit
Industries, Inc................ 113,250
6,500 IndyMac Bancorp, Inc.*........... 133,656
2,300 Investment Technology
Group, Inc.*................... 91,856
2,000 LaBranche & Co., Inc.*........... 66,750
2,100 Metris Companies Inc............. 82,950
900 Providian Financial Corp......... 114,300
700 White Mountains Insurance
Group, Inc..................... 191,013
----------
1,074,884
FOOD PROCESSING (0.4%)
3,300 Hain Celestial Group, Inc.*...... 115,913
1,500 Keebler Foods Co................. 63,000
1,800 McCormick & Co., Inc............. 53,550
----------
232,463
FURNITURE/HOME
FURNISHINGS (0.1%)
2,250 Ethan Allen Interiors, Inc....... 63,703
HEALTHCARE INFORMATION SYSTEMS (0.5%)
3,000 Cerner Corp.*.................... 139,312
14,000 Hooper Holmes, Inc............... 133,140
----------
272,452
HOMEBUILDING (0.4%)
3,300 Centex Corp...................... 106,013
3,800 Ryland Group, Inc. (The)......... 117,800
----------
223,813
HOTEL/GAMING (1.1%)
1,500 Anchor Gaming*................... 119,344
3,400 International Game
Technology*.................... 114,325
7,000 Isle of Capri Casinos, Inc.*..... 108,500
3,000 MGM Mirage Inc................... 114,563
4,000 Mandalay Resort Group*........... 102,500
----------
559,232
HOUSEHOLD
PRODUCTS (0.5%)
2,000 Pfeiffer Vacuum Technology
AG (ADR)....................... 78,500
6,000 Salton, Inc.*.................... 193,875
----------
272,375
INDUSTRIAL SERVICES (3.1%)
8,000 ASI Solutions, Inc.*............. 149,000
5,800 Actrade Financial
Technologies, Ltd.*............ 174,362
3,000 Administaff, Inc.*............... 227,100
1,800 Catalina Marketing Corp.*........ 67,725
2,400 Convergys Corp.*................. 93,300
2,800 homestore.com, Inc.*............. 130,900
3,000 Korn/Ferry International*........ 113,438
3,800 Professional Detailing, Inc.*.... 216,600
3,300 Quanta Services, Inc.*........... 90,750
6,000 SCP Pool Corp.*.................. 177,750
2,300 SmartForce PLC (ADR)*............ 108,963
2,800 TeleTech Holdings, Inc.*......... 69,300
----------
1,619,188
--------------------------------------------------------------------------------
7
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments (unaudited)
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
INSURANCE--LIFE (0.2%)
2,800 StanCorp Financial Group, Inc.... $ 119,700
INSURANCE--PROPERTY
& CASUALTY (0.5%)
5,000 Old Republic International Corp.. 120,312
2,700 PartnerRe Ltd.................... 128,081
----------
248,393
INTERNET (2.3%)
1,500 Agile Software Corp.*............ 134,906
800 Alteon WebSystems, Inc.*......... 86,713
5,200 Exodus Communications, Inc.*..... 256,750
2,800 iBasis, Inc.*.................... 44,450
2,800 JNI Corporation*................. 249,200
2,000 Kana Communications, Inc.*....... 44,500
1,400 Netopia, Inc.*................... 15,400
2,200 PurchasePro.com Inc.*............ 193,325
2,500 Retek Inc.*...................... 132,500
6,000 Sequoia Software Corp.*.......... 38,812
----------
1,196,556
MACHINERY (0.5%)
1,500 Dover Corp....................... 70,406
7,000 GenTek, Inc...................... 106,750
3,000 Graco Inc........................ 96,750
----------
273,906
MANUFACTURED HOUSING/RECREATIONAL
VEHICLE (0.1%)
1,500 Oshkosh Truck Corp............... 58,125
MARITIME (0.3%)
5,625 A.C.L.N. Ltd.*................... 150,469
MEDICAL SERVICES (3.8%)
2,400 Accredo Health, Inc.*............ 117,300
2,800 Advance Paradigm, Inc.*.......... 118,125
1,500 Laboratory Corp. of America
Holdings*...................... 179,625
3,900 Morrison Management
Specialists, Inc............... 115,245
1,600 Myriad Genetics, Inc.*........... 137,600
5,500 Oxford Health Plans, Inc.*....... 169,039
2,200 Quest Diagnostics, Inc.*......... 252,450
6,000 Rehabcare Group, Inc.*........... 255,000
5,000 RightCHOICE Managed
Care, Inc. Class "A"*.......... 121,250
4,000 Syncor International Corp.*...... 147,250
4,400 Triad Hospitals, Inc.*........... 129,250
1,600 Universal Health Services, Inc.*. 137,000
1,300 Wellpoint Health
Networks, Inc.*................ 124,800
----------
2,003,934
MEDICAL SUPPLIES (7.0%)
2,000 Allergan, Inc.................... 168,875
2,800 Alpharma Inc. Class "A".......... 171,150
3,300 AmeriSource Health Corp.
Class OAO*..................... 155,100
6,000 Beckman Coulter, Inc............. 462,750
4,533 Bindley Western Industries, Inc.. 145,056
6,000 Candela Corp.*................... 66,000
6,000 Connetics Corp.*................. 144,750
3,000 Cytyc Corp.*..................... 129,375
8,000 D & K Healthcare
Resources, Inc.*............... 96,500
3,000 DENTSPLY International, Inc...... 104,813
5,000 Diagnostic Products Corp......... 268,125
4,000 Digene Corp.*.................... 144,000
200 Durect Corporation*.............. 3,000
7,000 Intuitive Surgical, Inc.*........ 82,250
8,000 Inverness Medical
Technology, Inc.*.............. 154,000
6,200 Meridian Medical
Technologies, Inc.*............ 106,950
2,000 1-800 CONTACTS, INC.*............ 96,000
5,000 Orthofix International N.V.*..... 123,750
4,000 Patterson Dental Co.*............ 90,000
4,000 PolyMedica Corp.*................ 171,500
2,000 Surmodics, Inc.*................. 109,500
2,800 Techne Corp.*.................... 313,600
2,800 Varian Medical Systems, Inc.*.... 126,525
4,000 Zoll Medical Corp.*.............. 195,000
----------
3,628,569
--------------------------------------------------------------------------------
8
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
September 30, 2000
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
METAL FABRICATING (1.1%)
2,500 CoorsTek, Inc.*.................. $ 95,625
3,400 Pitt-Des Moines, Inc............. 103,275
2,300 SPS Technologies, Inc.*.......... 111,550
4,000 Shaw Group, Inc.*................ 282,000
----------
592,450
NEWSPAPER (0.1%)
1,100 Dow Jones & Co., Inc............. 66,550
OILFIELD SERVICES/
EQUIPMENT (1.2%)
1,300 Cooper Cameron Corp.*............ 95,794
3,600 Hanover Compressor Co.*.......... 118,575
3,000 National-Oilwell, Inc.*.......... 93,750
9,000 Seitel, Inc.*.................... 129,375
3,800 Teekay Shipping Corp............. 178,362
----------
615,856
PACKAGING &
CONTAINER (0.2%)
11,000 Pactiv Corp.*.................... 123,063
PETROLEUMN
INTEGRATED (0.1%)
1,000 Williams (Clayton) Energy, Inc.*. 40,500
PRECISION
INSTRUMENT (4.2%)
2,500 Applied Films Corp.*............. 67,813
2,300 BEI Technologies, Inc............ 96,025
5,600 Esterline Technologies Corp.*.... 110,250
2,400 Mettler Toledo
International, Inc.*........... 105,600
3,600 Newport Corp..................... 573,356
3,375 Orbotech Ltd.*................... 184,570
1,600 PerkinElmer, Inc................. 167,000
1,300 Tektronix, Inc................... 99,856
3,400 Therma-Wave Inc.*................ 97,750
3,000 Varian, Inc.*.................... 129,187
1,200 Veeco Instruments, Inc.*......... 127,519
4,800 Waters Corp.*.................... 427,200
----------
2,186,126
PUBLISHING (0.3%)
1,300 Reader's Digest Association,
Inc. Class "A" ................ 45,906
1,500 Scholastic Corp.*................ 119,344
----------
165,250
RECREATION (0.3%)
2,000 Harley-Davidson, Inc............. 95,750
2,000 WMS Industries, Inc.*............ 43,235
----------
138,985
RESTAURANT (1.7%)
3,300 Brinker International, Inc.*..... 99,413
3,500 CEC Entertainment, Inc.*......... 112,000
3,050 Cheesecake Factory, Inc. (The)*.. 131,912
2,500 Darden Restaurants, Inc.......... 52,031
7,000 Panera Bread Company
Class "A"*..................... 146,125
6,000 RARE Hospitality
International, Inc.*........... 122,250
10,400 Ruby Tuesday, Inc................ 117,000
3,000 Sonic Corp.*..................... 94,500
----------
875,231
RETAIL BUILDING
SUPPLY (0.4%)
3,000 Fastenal Co...................... 172,875
1,280 Lowe's Companies, Inc............ 57,440
----------
230,315
RETAIL--SPECIAL
LINES (4.6%)
4,400 Blair Corp....................... 103,400
4,500 Charlotte Russe Holding, Inc.*... 59,625
7,000 Chico's FAS, Inc.*............... 238,000
4,000 Children's Place Retail
Stores Inc. (The)*............. 103,000
7,200 Christopher & Banks Corp.*....... 279,900
2,250 Cost Plus, Inc.*................. 67,781
1,800 Dollar Tree Stores, Inc.*........ 73,013
3,900 Insight Enterprises, Inc.*....... 106,275
6,500 Intertan, Inc.*.................. 93,844
--------------------------------------------------------------------------------
9
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments (unaudited)
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
RETAIL--SPECIAL
LINES (4.6%)(continued)
5,670 Intimate Brands, Inc.
Class "A"...................... $ 105,958
2,000 Linens ONO Things, Inc.*......... 51,000
3,200 Michaels Stores, Inc.*........... 128,000
9,000 Pier 1 Imports, Inc.............. 122,062
3,750 Quiksilver, Inc.*................ 72,188
1,200 RadioShack Corp.................. 77,550
1,200 Talbots, Inc. (The).............. 79,500
4,000 Tiffany & Co..................... 154,250
2,400 Tweeter Home Entertainment
Group, Inc.*................... 87,150
3,700 Ultimate Electronics, Inc.*...... 152,162
2,400 ValueVision International,
Inc. Class "A"*................ 60,300
5,850 Wilsons The Leather
Experts Inc.*.................. 105,666
2,000 Zale Corp.*...................... 64,875
----------
2,385,499
RETAIL STORE (1.0%)
2,500 BJ's Wholesale Club Inc.*........ 85,312
2,700 Factory 2-U Stores, Inc.*........ 82,519
5,000 Family Dollar Stores, Inc........ 96,250
2,000 Kohl's Corp.*.................... 115,375
8,000 Stein Mart, Inc.*................ 86,500
1,600 Target Corp...................... 41,000
----------
506,956
SEMICONDUCTOR (8.4%)
3,700 Applied Micro Circuits Corp.*.... 766,131
2,500 Bell Microproducts Inc.*......... 78,125
3,200 Cirrus Logic, Inc.*.............. 129,000
2,400 Cree, Inc.*...................... 279,000
2,000 Cymer, Inc.*..................... 61,375
2,200 Dallas Semiconductor Corp........ 72,325
1,300 Elantec Semiconductor, Inc.*..... 129,513
3,000 Galileo Technology Ltd.*......... 103,992
3,300 GaSonics International Corp.*.... 40,425
3,600 IC's Vision Systems
Corporation N.V.*.............. 109,125
4,500 inSilicon Corporation*........... 65,250
2,000 Integrated Device
Technology, Inc.*.............. 181,000
2,500 International Rectifier Corp.*... 126,406
9,000 JACO Electronics, Inc.*.......... 135,000
9,000 Mattson Technology, Inc.*........ 133,875
2,500 Nanometrics, Inc.*............... 133,594
3,000 NVIDIA Corp.*.................... 245,625
1,600 PMC-Sierra, Inc.*................ 344,400
2,000 QLogic Corp.*.................... 176,000
8,000 Semitool, Inc.*.................. 102,500
4,000 Silicon Image, Inc.*............. 99,250
2,400 Siliconix, Inc.*................. 113,250
10,200 TelCom Semiconductor, Inc.*...... 151,725
4,600 TranSwitch Corp.*................ 293,250
4,700 Trikon Technologies, Inc.*....... 66,387
5,000 TriQuint Semiconductor, Inc.*.... 182,188
2,500 Varian Semiconductor
Equipment Associates, Inc.*.... 93,594
----------
4,412,305
SHOE (0.9%)
2,250 Kenneth Cole Productions,
Inc. Class "A"*................ 79,453
6,000 Genesco Inc.*.................... 101,625
9,000 Maxwell Shoe Co., Inc.*.......... 100,688
4,800 Timberland Co. Class "A"*........ 196,800
----------
478,566
STEEL--GENERAL (0.2%)
3,500 Carpenter Technology Corp........ 101,937
TELECOMMUNICATIONS EQUIPMENT (4.0%)
3,500 Andrew Corp.*.................... 91,656
3,000 Anixter International, Inc.*..... 87,375
5,000 Arguss Holdings, Inc.*........... 102,188
1,600 Black Box Corp.*................. 74,600
3,800 C-Cor.net Corp.*................. 58,187
1,600 Carrier Access Corp.*............ 31,700
3,000 Communications Systems, Inc...... 40,125
3,800 International Fibercom, Inc.*.... 55,575
--------------------------------------------------------------------------------
10
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
September 30, 2000
--------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (4.0%)(continued)
2,800 Natural MicroSystems Corp.*...... $ 150,631
5,500 Oak Technology, Inc.*............ 150,563
6,000 Polycom, Inc.*................... 401,813
4,350 REMEC, Inc.*..................... 128,053
2,800 Scientific-Atlanta, Inc.......... 178,150
4,500 SpectraSite Holdings, Inc.*...... 83,531
2,600 Tekelec*......................... 85,475
1,500 Tollgrade Communications,
Inc.*.......................... 208,219
1,200 Tut Systems, Inc.*............... 103,575
5,000 Westell Technologies, Inc.
Class "A"*..................... 64,375
-----------
2,095,791
TELECOMMUNICATION
SERVICES (1.6%)
6,000 Boston Communications
Group, Inc.*................... 115,500
1,100 Digital Lightwave, Inc.*......... 79,887
3,200 DSET Corp.*...................... 66,000
3,900 DyCom Industries, Inc.*.......... 162,338
5,000 FiberNet Telecom Group, Inc.*.... 84,687
1,600 Global Crossing Ltd.*............ 49,600
4,000 Metromedia Fiber Network,
Inc. Class "A"*................ 97,250
1,800 Qwest Communications
International, Inc.*........... 86,513
4,700 RMH Teleservices, Inc.*.......... 75,494
-----------
817,269
TRUCKING/
TRANSPORTATION
LEASING (0.4%)
2,700 Forward Air Corp.*............... 95,006
2,000 Landstar System, Inc.*........... 89,250
-----------
184,256
WATER UTILITY (0.1%)
4,500 Southwest Water Co............... 59,344
WIRELESS NETWORKING (1.1%)
600 Aether Systems, Inc.*............ 63,300
6,000 InterWAVE Communications
International, Ltd.*........... 48,000
1,500 Netro Corp.*..................... 88,875
3,000 Puma Technology, Inc.*........... 60,938
4,000 RF Micro Devices Inc.*........... 125,500
1,800 Sawtek Inc.*..................... 69,328
1,700 Sierra Wireless, Inc.*........... 104,550
-----------
560,491
-----------
TOTAL COMMON
STOCKS AND TOTAL
INVESTMENT
SECURITIES (100.2%)
(Cost $32,917,780) .............. 52,358,205
-----------
REPURCHASE AGREEMENT (1.3%)
(Including accrued interest)
$700,000 Collateralized by $640,000
U.S. Treasury Bonds
14.25%, due 2/15/02,
with a value of $718,352
(with Morgan Stanley
Dean Witter & Co. 6.35%,
dated 9/29/00, due 10/2/00,
delivery value $700,370)....... 700,247
LIABILITIES IN EXCESS OF
CASH & RECEIVABLES (-1.5%) .................. (812,607)
-----------
NET ASSETS (100%) ........................... $52,245,845
===========
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER OUTSTANDING SHARE
$52,245,845 / 2,035,613
shares outstanding) ......................... $ 25.67
===========
* Non-income producing
(ADR) American Depositary Receipts
See Notes to Financial Statements
--------------------------------------------------------------------------------
11
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Statement of Assets and Liabilities
at September 30, 2000 (unaudited)
--------------------------------------------------------------------------------
Assets:
Investment securities, at value
(Cost--$32,917,780)...................... $52,358,205
Repurchase agreement
(Cost--$700,247)......................... 700,247
Cash ..................................... 23,435
Receivable for securities sold ........... 294,905
Receivable for capital shares sold ....... 218,145
Dividends receivable ..................... 4,117
-----------
Total Assets ......................... 53,599,054
-----------
Liabilities:
Payable for capital shares
repurchased ............................ 900,818
Payable for securities purchased ......... 369,671
Accrued expenses:
Advisory fee payable ................... 32,245
Service and distribution plan
fees payable.......................... 10,748
Other .................................. 39,727
-----------
Total Liabilities .................... 1,353,209
-----------
Net Assets ............................... $52,245,845
===========
Net Assets consist of:
Capital stock, at $.001 par value
(authorized 300,000,000,
outstanding 2,035,613 shares)........... $ 2,036
Additional paid-in capital ............... 26,577,850
Accumulated net investment loss .......... (253,204)
Undistributed net realized gain
on investments.......................... 6,478,738
Net unrealized appreciation
of investments.......................... 19,440,425
-----------
Net Assets ............................... $52,245,845
===========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($52,245,845 / 2,035,613
shares outstanding) .................... $ 25.67
===========
Statement of Operations
for the six months ended September 30, 2000 (unaudited)
--------------------------------------------------------------------------------
Investment Income:
Interest income .......................... $ 73,438
Dividend income (net of foreign
withholding tax of $250)................ 26,280
-----------
Total Income ......................... 99,718
-----------
Expenses:
Advisory fee ............................. 179,946
Service and distribution plan fee ........ 59,982
Auditing and legal fees .................. 20,816
Custodian fees ........................... 18,344
Accounting and bookkeeping expense ....... 16,200
Quote charge ............................. 14,914
Registration and filing fees ............. 13,149
Directors' fees and expenses ............. 12,413
Printing ................................. 7,138
Transfer agent fees ...................... 6,391
Insurance, dues and other ................ 6,132
-----------
Total expenses before
custody credits .................... 355,425
Less: custody credits ................ (2,503)
-----------
Net Expenses ......................... 352,922
-----------
Net Investment Loss ...................... (253,204)
-----------
Net Realized and Unrealized
Gain (Loss) on Investments:
Net Realized Loss .................... (67,635)
Change in Net Unrealized
Appreciation........................ 1,461,812
-----------
Net Realized Loss and Change in
Net Unrealized Appreciation
on Investments ......................... 1,394,177
-----------
Net Increase in Net Assets
from Operations ........................ $ 1,140,973
===========
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
for the six months ended September 30, 2000 (unaudited) and for the year ended March 31, 2000
---------------------------------------------------------------------------------------------
Six Months
Ended
September 30, Year Ended
2000 March 31,
(unaudited) 2000
-------------------------------------
<S> <C> <C>
Operations:
Net investment loss ....................................................... $ (253,204) $ (305,905)
Net realized (loss) gain on investments ................................... (67,635) 8,847,788
Change in net unrealized appreciation ..................................... 1,461,812 13,241,090
-------------------------------------
Net increase in net assets from operations ................................ 1,140,973 21,782,973
-------------------------------------
Distributions to Shareholders:
Net realized gain from investment transactions ............................ -- (919,488)
-------------------------------------
Capital Share Transactions:
Proceeds from sale of shares .............................................. 18,112,948 24,072,879
Proceeds from reinvestment of distributions to shareholders ............... -- 916,146
Cost of shares repurchased ................................................ (17,792,530) (16,628,899)
-------------------------------------
Net increase from capital share transactions .............................. 320,418 8,360,126
-------------------------------------
Total Increase in Net Assets ................................................ 1,461,391 29,223,611
Net Assets:
Beginning of period ....................................................... 50,784,454 21,560,843
-------------------------------------
End of period ............................................................. $ 52,245,845 $ 50,784,454
=====================================
Accumulated Net Investment Loss, at end of period ........................... $ (253,204) $ --
=====================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
13
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
Value Line Emerging Opportunities Fund, Inc., formerly Value Line Small-Cap
Growth Fund, Inc., (the "Fund") is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company
whose primary investment objective is long-term growth of capital. The Fund
invests primarily in "small-cap" common stocks.
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. Such policies are
consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
(A) Security Valuation. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales prices on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the Fund are valued at fair value
as the Board of Directors may determine in good faith. Short-term instruments
with maturities of 60 days or less at the date of purchase are valued at
amortized cost, which approximates market value.
(B) Repurchase Agreements. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. 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 ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) Federal Income Taxes. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) Security Transactions and Distributions. Security transactions are accounted
for on the date the securities are purchased or sold. Interest income is accrued
as earned. Realized gains and losses on sales of securities are calculated for
financial accounting purposes and federal income tax purposes on the identified
cost basis. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
--------------------------------------------------------------------------------
14
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
September 30, 2000
--------------------------------------------------------------------------------
2. Capital Share Transactions
Transactions in capital stock, were as follows:
Six Months
Ended Year
September 30, Ended
2000 March 31,
(unaudited) 2000
------------------------
Shares sold ........................... 762,735 1,193,793
Shares issued to shareholders
in reinvestment of
distributions ....................... -- 48,041
------------------------
762,735 1,241,834
Shares repurchased .................... 760,547 837,228
------------------------
Net increase .......................... 2,188 404,606
========================
3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Six Months Ended
September 30, 2000
(unaudited)
------------------
PURCHASES:
Investment Securities..................... $21,527,858
===========
SALES:
Investment Securities..................... $19,843,684
===========
At September 30, 2000, the aggregate cost of investment securities and
repurchase agreement for federal income tax purposes was $33,628,726. The
aggregate appreciation and depreciation of investments at September 30, 2000,
based on a comparison of investment values and their costs for federal income
tax purposes was $21,551,556 and $2,121,830, respectively, resulting in a net
appreciation of $19,429,726.
4. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates:
An advisory fee of $179,946 was paid or payable to the Adviser for the six
months ended September 30, 2000. The fee was computed at an annual rate of .75
of 1% of the daily net assets during the period and paid monthly. The Adviser
provides research, investment programs and supervision of the investment
portfolio and pays costs of certain administrative services and office space.
The Adviser also provides persons, satisfactory to the Fund's Board of
Directors, to act as officers of the Fund and pays their salaries and wages. The
Fund bears all other costs and expenses.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, for the payment of certain
expenses incurred by Value Line Securities, Inc. (the "Distributor") a
wholly-owned subsidiary of the Adviser, in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders at an
annual rate of 0.25% of the Fund's average daily net assets. For the six months
ended September 30, 2000, fees amounting to $59,982 were paid or payable to the
Distributor under this plan.
For the six months ended September 30, 2000, the Fund's expenses were reduced by
$2,503 under a custody credit arrangement with the Custodian.
Certain officers and directors of the Adviser and the Distributor, are also
officers and a director of the Fund. During the six months ended September 30,
2000, the Fund paid brokerage commissions totaling $10,169 to the Distributor, a
registered broker/dealer, which clears its transactions through unaffiliated
brokers.
At September 30, 2000, the Adviser, and/or affiliated companies, and the Value
Line, Inc. Profit Sharing and Savings Plan, owned 1,415,394 shares of the Fund's
capital stock, representing 69.5% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 49,549 shares of capital stock,
representing 2.4% of the outstanding shares.
--------------------------------------------------------------------------------
15
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months Ended Years Ended March 31,
September 30, 2000 ---------------------------------------------------------------------------
(unaudited) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
Net asset value,
beginning of period .............. $ 24.97 $ 13.24 $ 13.37 $ 12.67 $ 15.11 $ 12.33
-------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss .............. (.12) (.15)(3) (.11)(3) (.15) (.13) (.18)
Net gains or (losses) on
securities (both realized
and unrealized) ................ .82 12.39 .21 3.34 (.08) 3.08
-------------------------------------------------------------------------------------------
Total from investment
operations ..................... .70 12.24 .10 3.19 (.21) 2.90
-------------------------------------------------------------------------------------------
Less distributions:
Distributions from
realized gains ................. -- (.51) (.23) (2.49) (2.23) (.12)
-------------------------------------------------------------------------------------------
Total distributions .............. -- (.51) (.23) (2.49) (2.23) (.12)
-------------------------------------------------------------------------------------------
Net asset value, end of period ..... $ 25.67 $ 24.97 $ 13.24 $ 13.37 $ 12.67 $ 15.11
===========================================================================================
Total return ....................... 2.80% 93.59% 1.01% 27.50% (2.07)% 23.58%
===========================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) ................... $ 52,246 $ 50,784 $ 21,561 $ 21,490 $ 16,974 $ 19,106
Ratio of operating expenses to
average net assets ............... 1.45%*(2) 1.34%(2)(3) 1.34%(2)(3) 1.81%(1) 1.87%(1) 2.15%(1)
Ratio of net investment loss to
average net assets ............... (1.04)% (0.96%)(3) (0.90)%(3) (1.10)% (1.07)% (1.27)%
Portfolio turnover rate ............ 42%+ 104% 203% 149% 100% 57%
</TABLE>
(1) Before offset of custody credits.
(2) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been 1.44% for the six month period ended September 30, 2000 (unaudited),
1.32% for the year ended 3/31/2000 and 1.29% for the year ended 3/31/1999.
(3) Net of waived advisory fee and service and distribution plan fees. Had
these expenses been fully paid by the Fund for the years ended March 31,
2000 and March 31, 1999, net investment loss per share would have been
$(.21) and $(.18), the ratio of expenses to average net assets would have
been 1.69% and 1.91%, and the ratio of net investment loss to average net
assets would have been 1.31% and (1.47)%, respectively.
+ Not annualized
* Annualized
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16
<PAGE>
INVESTMENT ADVISER Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Marion N. Ruth
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Stephen E. Grant
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
Small-Cap investments entail special risk considerations including liquidity and
volatility.
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and, accordingly, they
do not express an opinion thereon.
This unaudited report is issued for information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from the
Distributor).
#514996
