UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05848
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The Gabelli Value Fund Inc.
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2006
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI VALUE FUND INC.
SEMI-ANNUAL REPORT
JUNE 30, 2006
TO OUR SHAREHOLDERS,
During the second quarter of 2006, The Gabelli Value Fund Inc. (the
"Fund") rose 1.0%, while the Standard & Poor's ("S&P") 500 Index declined 1.4%
and the Dow Jones Industrial Average rose 0.9%. For the six month period ended
June 30, 2006, the Fund was up 8.2% versus gains of 2.7% and 5.3% for the S&P
500 Index and the Dow Jones Industrial Average, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2006.
COMPARATIVE RESULTS
- ---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2006 (A)
------------------------------------------------
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year (9/29/89)
------- ---- ------ ------ ------ ------- ------- ---------
GABELLI VALUE FUND CLASS A ..... 1.03% 8.23% 8.22% 12.56% 5.43% 11.80% 13.67% 12.64%
(4.53)(B) 2.27(B) 2.26(B) 10.46(B) 4.24(B) 11.17(B) 13.24(B) 12.27(B)
S&P 500 Index .................. (1.44) 2.71 8.62 11.21 2.49 8.32 10.73 10.35
Dow Jones Industrial Average ... 0.93 5.25 11.07 9.95 3.47 9.17 11.87 11.50
Nasdaq Composite Index ......... (7.17) (1.51) 5.60 10.21 0.10 6.25 10.65 9.53
Class B ........................ 0.81 7.81 7.45 11.73 4.63 11.27 13.31 12.33
(4.19)(c) 2.81(c) 2.45(c) 10.93(c) 4.30(c) 11.27(c) 13.31(c) 12.33(c)
Class C ........................ 0.81 7.81 7.44 11.72 4.64 11.30 13.33 12.35
(0.19)(c) 6.81(c) 6.44(c) 11.72(c) 4.64(c) 11.30(c) 13.33(c) 12.35(c)
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND
REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. 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.
PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND
SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE CLASS A SHARES' NET ASSET VALUES ARE USED TO CALCULATE PERFORMANCE FOR
THE PERIODS PRIOR TO THE ISSUANCE OF CLASS B SHARES AND CLASS C SHARES ON
MARCH 15, 2000. THE ACTUAL PERFORMANCE FOR THE CLASS B SHARES AND CLASS C
SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH
THESE CLASSES OF SHARES. THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED
INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 INDEX AND THE NASDAQ
COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE.
DIVIDENDS ARE REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.5% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT
THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY.
CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
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We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
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THE GABELLI VALUE FUND INC.
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from January 1, 2006 through June 30, 2006
EXPENSE TABLE
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We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the six months ended June 30, 2006.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
01/01/06 06/30/06 Ratio Period*
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THE GABELLI VALUE FUND INC.
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class A $1,000.00 $1,082.30 1.42% $ 7.33
Class B $1,000.00 $1,078.10 2.17% $11.18
Class C $1,000.00 $1,078.10 2.17% $11.18
HYPOTHETICAL 5% RETURN
Class A $1,000.00 $1,017.75 1.42% $ 7.10
Class B $1,000.00 $1,014.03 2.17% $10.84
Class C $1,000.00 $1,014.03 2.17% $10.84
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.
2
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of June 30, 2006:
THE GABELLI VALUE FUND INC.
Entertainment ................................. 11.9%
Publishing .................................... 10.8%
Cable and Satellite ........................... 8.4%
Telecommunications ............................ 7.5%
Food and Beverage ............................. 5.8%
Broadcasting .................................. 5.6%
Metals and Mining ............................. 4.8%
Diversified Industrial ........................ 4.7%
Financial Services ............................ 4.3%
Energy and Utilities .......................... 3.7%
Equipment and Supplies ........................ 3.4%
Electronics ................................... 3.1%
Consumer Products ............................. 3.0%
Repurchase Agreements ......................... 2.9%
Environmental Services ........................ 2.7%
Communications Equipment ...................... 2.7%
Hotels and Gaming ............................. 2.6%
Consumer Services ............................. 2.2%
Automotive: Parts and Accessories ............. 2.2%
Aviation: Parts and Services .................. 1.9%
Specialty Chemicals ........................... 1.2%
Agriculture ................................... 0.9%
Aerospace ..................................... 0.9%
Manufactured Housing .......................... 0.6%
Retail ........................................ 0.6%
Machinery ..................................... 0.6%
Real Estate ................................... 0.5%
Wireless Communications ....................... 0.3%
Computer Software and Services ................ 0.2%
Business Services ............................. 0.2%
Transportation ................................ 0.0%
Other Assets and Liabilities (Net) ............ (0.2)%
------
100.0%
======
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS
FILED FOR THE QUARTER ENDED MARCH 31, 2006. SHAREHOLDERS MAY OBTAIN THIS
INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI
(800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT
WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, (i)
by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at
One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting the Securities
and Exchange Commission's website at www.sec.gov.
3
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS -- JUNE 30, 2006 (UNAUDITED)
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MARKET
SHARES COST VALUE
------ ---- -------
COMMON STOCKS -- 97.3%
AEROSPACE -- 0.9%
1,000 Lockheed Martin Corp. .........$ 25,800 $ 71,740
1,000,000 Rolls-Royce Group plc+ ........ 7,007,796 7,655,750
53,800,000 Rolls-Royce Group plc, Cl. B .. 55,145 101,975
------------ -----------
7,088,741 7,829,465
------------ -----------
AGRICULTURE -- 0.9%
185,000 Archer-Daniels-Midland Co. .... 2,275,910 7,636,800
30,000 Mosaic Co.+ ................... 373,124 469,500
------------ -----------
2,649,034 8,106,300
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AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.2%
38,000 China Yuchai International Ltd.+ 300,576 277,780
450,000 Dana Corp. .................... 6,036,030 1,188,000
250,000 Genuine Parts Co. ............. 6,600,695 10,415,000
275,000 Navistar International Corp.+ 7,392,667 6,767,750
28,000 Proliance International Inc.+ 131,723 129,360
------------ -----------
20,461,691 18,777,890
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AVIATION: PARTS AND SERVICES -- 1.9%
34,000 Curtiss-Wright Corp. .......... 441,649 1,049,920
350,000 Fairchild Corp., Cl. A+ ....... 2,502,891 728,000
340,000 GenCorp Inc.+ ................. 3,135,471 5,450,200
80,000 Sequa Corp., Cl. A+ ........... 3,464,314 6,520,000
33,000 Sequa Corp., Cl. B+ ........... 1,673,268 2,697,750
------------ -----------
11,217,593 16,445,870
------------ -----------
BROADCASTING -- 5.6%
1,200,000 CBS Corp., Cl. A .............. 21,763,305 32,472,000
132,000 Gray Television Inc. .......... 1,558,505 764,280
187,500 Liberty Media Holding Corp. -
Capital, Cl. A+ .............. 11,537,181 15,706,875
30,000 Young Broadcasting Inc.,
Cl. A+ ....................... 270,342 94,200
------------ -----------
35,129,333 49,037,355
------------ -----------
BUSINESS SERVICES -- 0.2%
15,000 ChoicePoint Inc.+ ............. 540,551 626,550
30,000 Intermec Inc.+ ................ 695,161 688,200
30,000 Nashua Corp.+ ................. 258,767 206,100
------------ -----------
1,494,479 1,520,850
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CABLE AND SATELLITE -- 8.4%
130,000 Adelphia Communications Corp.,
Cl. A+ ...................... 91,925 5,850
2,175,000 Cablevision Systems Corp.,
Cl. A+ ...................... 6,855,175 46,653,750
335,000 DIRECTV Group Inc.+ ........... 5,907,032 5,527,500
120,000 EchoStar Communications
Corp., Cl. A+ ............... 3,707,953 3,697,200
250,000 Liberty Global Inc., Cl. A+ ... 4,300,954 5,375,000
MARKET
SHARES COST VALUE
------ ---- -------
15,000 Liberty Global Inc., Cl. C+ ...$ 256,685 $ 308,550
302,000 Rogers Communications Inc.,
Cl. B ....................... 2,470,978 12,200,800
------------ -----------
23,590,702 73,768,650
------------ -----------
COMMUNICATIONS EQUIPMENT -- 2.7%
100,000 Agere Systems Inc.+ ........... 1,576,057 1,470,000
429,000 Corning Inc.+ ................. 3,895,784 10,377,510
740,000 Lucent Technologies Inc.+ ..... 3,096,298 1,790,800
390,000 Motorola Inc. ................. 4,128,840 7,858,500
830,000 Nortel Networks Corp.+ ........ 3,825,530 1,859,200
------------ -----------
16,522,509 23,356,010
------------ -----------
COMPUTER SOFTWARE AND SERVICES -- 0.2%
56,000 Yahoo! Inc.+ .................. 1,968,559 1,848,000
------------ -----------
CONSUMER PRODUCTS -- 3.0%
85,000 Energizer Holdings Inc.+ ...... 1,992,017 4,978,450
93,000 Gallaher Group plc, ADR ....... 2,374,002 5,816,220
500 Givaudan SA ................... 135,440 393,645
130,000 Hartmarx Corp.+ ............... 606,544 780,000
6,200 National Presto Industries Inc. 179,358 324,136
175,000 Pactiv Corp.+ ................. 1,690,548 4,331,250
600,000 Swedish Match AB .............. 6,254,604 9,671,032
4,000 Wolverine World Wide Inc. ..... 38,937 93,320
------------ -----------
13,271,450 26,388,053
------------ -----------
CONSUMER SERVICES -- 2.2%
90,000 IAC/InterActiveCorp+ .......... 1,685,751 2,384,100
720,000 Liberty Media Holding Corp. -
Interactive, Cl. A+ .......... 14,491,020 12,427,200
205,000 Rollins Inc. .................. 1,500,548 4,026,200
------------ -----------
17,677,319 18,837,500
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DIVERSIFIED INDUSTRIAL -- 4.7%
49,000 Ampco-Pittsburgh Corp. ........ 245,017 1,403,850
73,000 Cooper Industries Ltd., Cl. A 4,890,363 6,783,160
210,000 Crane Co. ..................... 5,510,883 8,736,000
29,000 Griffon Corp.+ ................ 644,825 756,900
50,000 Harbor Global Co. Ltd.+ ....... 88,471 455,500
375,000 Honeywell International Inc. .. 11,514,241 15,112,500
150,000 ITT Industries Inc. ........... 5,499,219 7,425,000
220,000 Katy Industries Inc.+ ......... 1,802,518 514,800
3,000 Lamson & Sessions Co.+ ........ 34,956 85,080
------------ -----------
30,230,493 41,272,790
------------ -----------
ELECTRONICS -- 3.1%
220,000 Texas Instruments Inc. ........ 5,563,627 6,663,800
60,000 Thermo Electron Corp.+ ........ 1,162,178 2,174,400
300,000 Thomas & Betts Corp.+ ......... 5,345,034 15,390,000
110,000 Tyco International Ltd. ....... 3,076,417 3,025,000
------------ -----------
15,147,256 27,253,200
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See accompanying notes to financial statements.
4
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2006 (UNAUDITED)
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MARKET
SHARES COST VALUE
------ ---- -------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES -- 3.7%
6,000 Allegheny Energy Inc.+ ........$ 74,092 $ 222,420
20,000 Chevron Corp. ................. 1,223,550 1,241,200
195,000 ConocoPhillips ................ 5,417,216 12,778,350
110,000 Kerr-McGee Corp. .............. 3,962,186 7,628,500
5,420 Mirant Corp.+ ................. 25,619 145,256
135,000 Northeast Utilities ........... 2,589,737 2,790,450
70,000 Southwest Gas Corp. ........... 1,400,502 2,193,800
59,600 TransMontaigne Inc.+ .......... 666,308 668,116
72,755 Western Gas Resources Inc. .... 4,349,067 4,354,387
------------ ------------
19,708,277 32,022,479
------------ ------------
ENTERTAINMENT -- 11.9%
8,570 Chestnut Hill Ventures+ (a) ... 233,241 184,031
400,000 Discovery Holding Co., Cl. A+ 4,551,612 5,852,000
60,000 Dover Motorsports Inc. ........ 309,314 352,200
1,300,000 Gemstar-TV Guide International
Inc.+ ....................... 6,278,509 4,576,000
330,000 Grupo Televisa SA, ADR ........ 3,045,483 6,372,300
170,000 The Walt Disney Co. ........... 4,427,710 5,100,000
1,260,000 Time Warner Inc. .............. 18,053,221 21,798,000
34,000 Triple Crown Media Inc.+ ...... 365,718 294,780
1,225,000 Viacom Inc., Cl. A+ ........... 34,565,509 44,038,750
450,000 Vivendi SA, ADR ............... 6,072,068 15,709,500
------------ ------------
77,902,385 104,277,561
------------ ------------
ENVIRONMENTAL SERVICES -- 2.7%
240,000 Republic Services Inc. ........ 4,425,922 9,681,600
390,000 Waste Management Inc. ......... 9,151,151 13,993,200
------------ ------------
13,577,073 23,674,800
------------ ------------
EQUIPMENT AND SUPPLIES -- 3.4%
210,000 CIRCOR International Inc. ..... 2,325,092 6,402,900
185,000 Flowserve Corp.+ .............. 2,864,920 10,526,500
95,000 Gerber Scientific Inc.+ ....... 650,912 1,235,950
98,000 GrafTech International Ltd.+ .. 1,196,563 568,400
330,000 Watts Water Technologies Inc.,
Cl. A ....................... 4,325,964 11,071,500
------------ ------------
11,363,451 29,805,250
------------ ------------
FINANCIAL SERVICES -- 4.3%
530,000 American Express Co. .......... 17,244,922 28,206,600
100,000 Ameriprise Financial Inc. ..... 2,346,124 4,467,000
27,000 Deutsche Bank AG .............. 1,569,799 3,037,500
110,000 Phoenix Companies Inc. ........ 1,214,393 1,548,800
------------ ------------
22,375,238 37,259,900
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -------
FOOD AND BEVERAGE -- 5.8%
17,000 Corn Products International
Inc. ........................$ 209,567 $ 520,200
67,000 Del Monte Foods Co. ........... 508,135 752,410
208,000 Diageo plc, ADR ............... 7,993,283 14,050,400
220,000 Flowers Foods Inc. ............ 1,587,151 6,300,800
81,500 Fomento Economico Mexicano
SA de CV, ADR ............... 2,988,579 6,823,180
56,000 General Mills Inc. ............ 2,795,872 2,892,960
210,000 H.J. Heinz Co. ................ 7,326,640 8,656,200
70,000 Kerry Group plc, Cl. A ........ 797,221 1,485,524
380,000 PepsiAmericas Inc. ............ 5,294,953 8,401,800
3,000 The Hershey Co. ............... 145,382 165,210
15,000 Wm. Wrigley Jr. Co. ........... 727,034 680,400
3,750 Wm. Wrigley Jr. Co., Cl. B .... 193,262 169,875
------------ ------------
30,567,079 50,898,959
------------ ------------
HOTELS AND GAMING -- 2.6%
18,000 Aztar Corp.+ .................. 197,676 935,280
72,000 Dover Downs Gaming &
Entertainment Inc. .......... 483,202 1,414,080
190,000 Gaylord Entertainment Co.+ .... 5,345,735 8,291,600
177,500 Hilton Hotels Corp. ........... 1,385,106 5,019,700
3,000 Kerzner International Ltd.+ ... 239,530 237,840
352,941 Ladbrokes plc ................. 3,502,007 2,659,606
19,000 Las Vegas Sands Corp.+ ........ 670,772 1,479,340
65,000 MGM Mirage+ ................... 1,478,602 2,652,000
------------ ------------
13,302,630 22,689,446
------------ ------------
MACHINERY -- 0.6%
85,800 CNH Global NV ................. 1,604,960 2,052,336
38,000 Deere & Co. ................... 1,565,024 3,172,620
------------ ------------
3,169,984 5,224,956
------------ ------------
MANUFACTURED HOUSING -- 0.6%
485,000 Champion Enterprises Inc.+ .... 4,782,947 5,354,400
------------ ------------
METALS AND MINING -- 4.8%
478,000 Barrick Gold Corp. ............ 7,651,550 14,148,800
30,000 Falconbridge Ltd. ............. 1,546,633 1,585,500
123,133 Kinross Gold Corp.+ ........... 1,119,195 1,340,918
471,000 Newmont Mining Corp. .......... 9,100,344 24,930,030
------------ ------------
19,417,722 42,005,248
------------ ------------
PUBLISHING -- 10.8%
150,000 Belo Corp., Cl. A ............. 2,592,090 2,340,000
925,000 Media General Inc., Cl. A ..... 18,185,500 38,748,250
70,000 Meredith Corp. ................ 1,404,532 3,467,800
1,110,000 News Corp., Cl. A ............. 16,418,747 21,289,800
332,000 PRIMEDIA Inc.+ ................ 962,615 607,560
See accompanying notes to financial statements.
5
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -------
COMMON STOCKS (CONTINUED)
PUBLISHING (CONTINUED)
300,000 Reader's Digest Association
Inc. ........................$ 4,510,861 $ 4,188,000
300,000 The E.W. Scripps Co., Cl. A ... 10,208,574 12,942,000
330,000 Tribune Co. ................... 13,661,669 10,701,900
------------ ------------
67,944,588 94,285,310
------------ ------------
REAL ESTATE -- 0.5%
134,000 Griffin Land & Nurseries Inc.+ 1,587,460 4,187,500
------------ ------------
RETAIL -- 0.6%
85,000 Ingles Markets Inc., Cl. A .... 976,701 1,445,000
145,000 Safeway Inc. .................. 2,964,686 3,770,000
1,820 SUPERVALU Inc. ................ 54,145 55,874
------------ ------------
3,995,532 5,270,874
------------ ------------
SPECIALTY CHEMICALS -- 1.2%
220,000 Ferro Corp. ................... 4,605,734 3,511,200
400,000 Hercules Inc.+ ................ 5,049,452 6,104,000
15,000 Sensient Technologies Corp. ... 300,492 313,650
8,065 Tronox Inc., Cl. B ............ 78,763 106,216
------------ ------------
10,034,441 10,035,066
------------ ------------
TELECOMMUNICATIONS -- 7.5%
650,000 Cincinnati Bell Inc.+ ......... 2,508,755 2,665,000
25,000 Commonwealth Telephone
Enterprises Inc. ............ 989,702 829,000
74,500 Embarq Corp.+ ................. 2,005,804 3,053,755
530,000 Qwest Communications
International Inc.+ ......... 1,421,227 4,287,700
1,490,000 Sprint Nextel Corp. ........... 20,280,904 29,785,100
425,000 Telephone & Data Systems Inc. 9,269,310 17,595,000
185,000 Telephone & Data Systems
Inc., Special ............... 4,120,871 7,196,500
------------ ------------
40,596,573 65,412,055
------------ ------------
TRANSPORTATION -- 0.0%
99,000 Grupo TMM SA, Cl. A, ADR+ ..... 780,160 402,930
------------ ------------
WIRELESS COMMUNICATIONS -- 0.3%
40,000 United States Cellular Corp.+ 1,880,524 2,424,000
------------ ------------
TOTAL COMMON STOCKS ........... 539,435,223 849,672,667
------------ ------------
WARRANTS -- 0.0%
ENERGY AND UTILITIES -- 0.0%
17,405 Mirant Corp., Ser. A,
expire 01/03/11+ ............ 35,380 175,791
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- -------
REPURCHASE AGREEMENTS -- 2.9%
$25,300,000 Barclays Capital Inc.,
4.400%, dated 6/30/06,
due 07/03/06, proceeds at
maturity, $25,309,277 (b) ...$ 25,300,000 $ 25,300,000
------------ ------------
TOTAL
INVESTMENTS -- 100.2% .......$564,770,603 875,148,458
============
OTHER ASSETS AND LIABILITIES (NET) -- (0.2)% (1,776,227)
------------
NET ASSETS -- 100.0% ............................. $873,372,231
============
- ----------------------------
(a) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing the valuation of comparable
securities and other factors on a regular basis. At June 30, 2006, the
market value of the fair valued security amounted to $184,031 or 0.02% of
total net assets.
(b) Collateralized by U.S. Treasury Bond, 7.68%, due 02/15/21, market value
$25,806,000.
+ Non-income producing security.
ADR American Depository Receipt
See accompanying notes to financial statements.
6
THE GABELLI VALUE FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $564,770,603) .............. $875,148,458
Cash ................................................... 597
Receivable for investments sold ........................ 1,626,364
Dividends and interest receivable ...................... 620,513
Receivable for Fund shares sold ........................ 226,486
Other assets ........................................... 19,154
------------
TOTAL ASSETS ........................................... 877,641,572
------------
LIABILITIES:
Payable for Fund shares redeemed ....................... 1,291,511
Payable for investment advisory fees ................... 710,046
Payable for investments purchased ...................... 1,492,811
Payable for shareholder services fees .................. 348,064
Payable for distribution fees .......................... 195,829
Payable for shareholder communications expenses ........ 163,908
Other accrued expenses ................................. 67,172
------------
TOTAL LIABILITIES ...................................... 4,269,341
------------
NET ASSETS applicable to 44,650,506
shares outstanding ................................... $873,372,231
============
NET ASSETS CONSIST OF:
Capital stock, each class at $0.001 par value .......... $ 44,651
Additional paid-in capital ............................. 417,319,038
Accumulated net investment income ...................... 2,848,796
Accumulated net realized gain on investments
and foreign currency transactions .................... 142,781,681
Net unrealized appreciation on investments ............. 310,377,855
Net unrealized appreciation on foreign
currency translations ................................ 210
------------
NET ASSETS ............................................. $873,372,231
============
SHARES OF CAPITAL STOCK:
CLASS A:
Net Asset Value and redemption price per share
($843,355,148 / 43,039,271 shares
outstanding; 100,000,000 shares authorized) .......... $19.60
======
Maximum offering price per share (NAV / .945,
based on maximum sales charge of 5.50%
of the offering price) ............................... $20.74
======
CLASS B:
Net Asset Value and offering price per share
($16,900,684 / 907,398 shares outstanding;
100,000,000 shares authorized) ....................... $18.63(a)
======
CLASS C:
Net Asset Value and offering price per share
($13,116,399 / 703,837 shares outstanding;
50,000,000 shares authorized) ........................ $18.64(a)
======
- ------------------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $149,781) ........... $ 9,593,048
Interest ............................................... 683,455
------------
TOTAL INVESTMENT INCOME ................................ 10,276,503
------------
EXPENSES:
Investment advisory fees ............................... 5,152,146
Distribution fees - Class A ............................ 1,249,376
Distribution fees - Class B ............................ 86,763
Distribution fees - Class C ............................ 67,878
Shareholder services fees .............................. 453,983
Shareholder communications expenses .................... 137,347
Custodian fees ......................................... 68,573
Interest expense ....................................... 59,528
Legal and audit fees ................................... 34,502
Directors' fees ........................................ 34,200
Registration expenses .................................. 21,642
Miscellaneous expenses ................................. 76,483
------------
TOTAL EXPENSES ......................................... 7,442,421
Less: Custodian fee credits ............................ (15,603)
------------
NET EXPENSES ........................................... 7,426,818
------------
NET INVESTMENT INCOME .................................. 2,849,685
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments ....................... 148,310,866
Net realized gain on foreign currency transactions ..... 11,867
------------
Net realized gain on investments and
foreign currency transactions ........................ 148,322,733
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations ........................ (65,656,373)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY ..................... 82,666,360
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................................... $ 85,516,045
============
See accompanying notes to financial statements.
7
THE GABELLI VALUE FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2006 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2005
----------------- -----------------
OPERATIONS:
Net investment income ........................................................... $ 2,849,685 $ 744,617
Net realized gain on investments and foreign currency transactions .............. 148,322,733 77,766,169
Net change in unrealized appreciation/depreciation on investments and
foreign currency translations ................................................. (65,656,373) (82,512,239)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................. 85,516,045 (4,001,453)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ....................................................................... -- (666,736)
-------------- --------------
-- (666,736)
-------------- --------------
Net realized gains on investments
Class A ....................................................................... -- (73,800,544)
Class B ....................................................................... -- (1,289,884)
Class C ....................................................................... -- (1,025,214)
-------------- --------------
-- (76,115,642)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ............................................. -- (76,782,378)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Class A ....................................................................... (302,923,749) (120,095,977)
Class B ....................................................................... (2,235,507) (1,087,763)
Class C ....................................................................... (1,929,899) (1,199,523)
-------------- --------------
NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ...................... (307,089,155) (122,383,263)
-------------- --------------
REDEMPTION FEES ................................................................. 1,131 52,322
-------------- --------------
NET DECREASE IN NET ASSETS ...................................................... (221,571,979) (203,114,772)
NET ASSETS:
Beginning of period ............................................................. 1,094,944,210 1,298,058,982
-------------- --------------
End of period (including undistributed net investment income of
$2,848,796 and $0, respectively) .............................................. $ 873,372,231 $1,094,944,210
============== ==============
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 United States ("U.S.") 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 or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price 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. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Directors (the "Board") so determines, by such other method as the
Board shall determine in good faith to reflect
8
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
its fair market value. Portfolio securities traded on more than one national
securities exchange or market are valued according to the broadest and most
representative market, as determined by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued as determined by the Board. Debt instruments having a maturity
greater than 60 days for which market quotations are readily available are
valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price.
Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are
fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. 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 as collateral whose market
value, including accrued interest, will be at least equal to 102% 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
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2006, the Fund had an investment of $25,300,000 in a repurchase agreement.
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 fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as a
hedging instrument. 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
9
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
not be able to enter into a closing transaction because of an illiquid secondary
market. At June 30, 2006, there were no open futures contracts.
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions. Short
selling involves selling securities that may or may not be owned and, at times,
borrowing the same securities for delivery to the purchaser, with an obligation
to replace such borrowed securities at a later date. The proceeds received from
short sales are recorded as liabilities and the Fund records an unrealized gain
or loss to the extent of the difference between the proceeds received and the
value of an open short position on the day of determination. The Fund records a
realized gain or loss when the short position is closed out. By entering into a
short sale, the Fund bears the market risk of an unfavorable change in the price
of the security sold short. Dividends on short sales are recorded as an expense
by the Fund on the ex-dividend date and interest expense is recorded on the
accrual basis. The Fund did not hold any short positions as of June 30, 2006.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
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 that 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
translations. 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.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
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 on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each
10
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
Fund's average net assets or other criteria directly affecting the expenses as
determined by the Adviser pursuant to procedures established by the Board.
In calculating the net asset value ("NAV") per share of each class, investment
income, realized and unrealized gains and losses, redemption fees, and expenses
other than class specific expenses, are allocated daily to each class of shares
based upon the proportion of net assets of each class at the beginning of each
day. Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS. When cash balances are maintained in the custody account,
the Fund receives credits which are used to offset custodian fees. The gross
expenses paid under the custody arrangement are included in custodian fees in
the Statement of Operations with the corresponding expense offset, if any, shown
as "custodian fee credits".
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with Federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund. For the fiscal year
ended December 31, 2005, reclassifications were made to increase accumulated
distributions in excess of net investment income by $78,770 and decrease
accumulated distributions in excess of net realized gain on investments by
$78,770.
The tax character of distributions paid during the fiscal year ended December
31, 2005 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income (inclusive of short-term
capital gains) ....................................... $ 1,290,094
Net long-term capital gains ............................ 75,492,284
-----------
Total distributions paid ............................... $76,782,378
===========
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
As of December 31, 2005, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Undistributed ordinary income ............................ $ 820
Undistributed long-term capital gains .................... 1,032,106
Net unrealized appreciation on investments and
foreign currency ....................................... 369,459,571
-----------
Total accumulated gain ................................... $370,492,497
============
11
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The following summarizes the tax cost of investments and the related unrealized
appreciation/depreciation at June 30, 2006:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------- ---------------
Investments ............. $571,310,253 $334,945,776 $(31,107,571) $303,838,205
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 its 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 affiliated persons of the Adviser.
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Fund. Under the Class A, Class B, and Class C Share
Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%,
1.00%, and 1.00%, respectively, of the average daily net assets of those
classes, the annual limitations under each Plan. Such payments are accrued daily
and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2006, other than short-term securities, aggregated
$60,635,287 and $331,062,674, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2006, the
Fund paid brokerage commissions of $337,616 to Gabelli & Company. Additionally,
Gabelli & Company informed the Fund that it received $51,305 from investors
representing commissions (sales charges and underwriting fees) on sales and
redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the six months
ended June 30, 2006, the Fund paid or accrued $22,500 to the Adviser in
connection with the cost of computing the Fund's NAV, which is included in
miscellaneous expenses in the Statement of Operations.
7. CAPITAL STOCK TRANSACTIONS. The Fund currently offers three classes of shares
- -- Class A Shares, Class B Shares, and Class C Shares. Class A Shares are
subject to a maximum front-end sales charge of 5.50%. Class B Shares are subject
to a contingent deferred sales charge ("CDSC") upon redemption within six years
of purchase and automatically convert to Class A Shares approximately eight
years after the original purchase. The applicable CDSC is equal to a declining
percentage of the lesser of the NAV per share at the date of the original
purchase or at the date of redemption, based on the length of time held. Class C
Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares
are available only through exchange of Class B Shares of other funds distributed
by Gabelli & Company. The Board has approved Class I Shares which have not been
offered publicly.
Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class A
Shares, Class B Shares, and Class C Shares that are redeemed or exchanged on or
before the seventh day after the date of a purchase. (Prior to June 15, 2005,
the Fund imposed a redemption fee on shares that were redeemed or exchanged on
or before the sixtieth day after the date of a purchase.) The redemption fee is
deducted from the proceeds otherwise payable to the redeeming shareholders and
is retained by the Fund. The redemption fees retained by the Fund during the six
months ended June 30, 2006 and the fiscal year ended December 31, 2005 amounted
to $1,131 and $52,322, respectively.
12
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The redemption fee does not apply to shares purchased through programs that the
Adviser determined to have appropriate short-term trading policies in place.
Additionally, certain recordkeepers for qualified and non-qualified retirement
plans that could not collect the redemption fee at the participant level due to
systems limitations have received an extension to implement such systems.
Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED
JUNE 30, 2006 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2005
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
CLASS A CLASS A
--------------------------- ----------------------------
Shares sold ........................................ 1,928,362 $ 37,112,526 3,107,146 $ 59,989,477
Shares issued upon reinvestment of dividends ....... 53 976 3,721,831 67,513,966
Shares redeemed .................................... (17,591,377) (340,037,251) (12,826,666) (247,599,420)
----------- ------------- ----------- -------------
Net decrease .................................. (15,662,962) $(302,923,749) (5,997,689) $(120,095,977)
=========== ============= =========== =============
CLASS B CLASS B
--------------------------- ----------------------------
Shares sold ........................................ 2,787 $ 52,020 20,985 $ 381,787
Shares issued upon reinvestment of dividends ....... 5 90 60,316 1,043,462
Shares redeemed .................................... (125,903) (2,287,617) (134,928) (2,513,012)
----------- ------------- ----------- -------------
Net decrease .................................. (123,111) $ (2,235,507) (53,627) $ (1,087,763)
=========== ============= =========== =============
CLASS C CLASS C
--------------------------- ----------------------------
Shares sold ........................................ 16,007 $ 293,365 119,549 $ 2,220,629
Shares issued upon reinvestment of dividends ....... -- -- 41,465 717,762
Shares redeemed .................................... (122,226) (2,223,264) (223,193) (4,137,914)
----------- ------------- ----------- -------------
Net decrease .................................. (106,219) $ (1,929,899) (62,179) $ (1,199,523)
=========== ============= =========== =============
8. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
9. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund trading practices involving certain funds managed by the Adviser.
GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company, is responding to
these requests for documents and testimony. In June 2006, GAMCO began
discussions with the SEC regarding a possible resolution of their inquiry. Since
these discussions are ongoing, it cannot be determined at this time whether they
will ultimately result in a settlement of this matter. On a separate matter, in
September 2005, the Adviser was informed by the staff of the SEC that the staff
may recommend to the Commission that an administrative remedy and a monetary
penalty be sought from the Adviser in connection with the actions of two of
seven closed-end funds managed by the Adviser relating to Section 19(a) and Rule
19a-1 of the 1940 Act. These provisions require registered investment companies
to provide written statements to shareholders when a dividend is made from a
source other than net investment income. While the two closed-end funds sent
annual statements and provided other materials containing this information, the
funds did not send written statements to shareholders with each distribution in
2002 and 2003. The Adviser believes that all of the funds are now in compliance.
The Adviser believes that these matters would have no effect on the Fund or any
material adverse effect on the Adviser or its ability to manage the Fund.
13
THE GABELLI VALUE FUND INC.
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
INCOME
FROM INVESTMENT OPERATIONS DISTRIBUTIONS
----------------------------------------- ---------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized
Ended Beginning Income/ Gain/(Loss) on Investment Investment Gain on Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Distributions
----------- --------- --------- ----------- ---------- ------ ----------- -------------
CLASS A
2006(c) $18.11 $ 0.05 $ 1.44 $ 1.49 -- -- --
2005 19.49 0.02 (0.05) (0.03) $(0.01) $(1.34) $(1.35)
2004 17.97 (0.02) 2.31 2.29 -- (0.77) (0.77)
2003 13.81 (0.05) 4.45 4.40 -- (0.24) (0.24)
2002 16.43 (0.04) (2.58) (2.62) -- -- --
2001 16.13 (0.05) 0.93 0.88 -- (0.58) (0.58)
CLASS B
2006(c) $17.28 $ 0.00 $ 1.35 $ 1.35 -- -- --
2005 18.79 (0.12) (0.05) (0.17) -- $(1.34) $(1.34)
2004 17.47 (0.15) 2.24 2.09 -- (0.77) (0.77)
2003 13.53 (0.17) 4.35 4.18 -- (0.24) (0.24)
2002 16.23 (0.14) (2.56) (2.70) -- -- --
2001 16.07 (0.18) 0.92 0.74 -- (0.58) (0.58)
CLASS C
2006(c) $17.29 $ 0.00 $ 1.35 $ 1.35 -- -- --
2005 18.80 (0.12) (0.05) (0.17) -- $(1.34) $(1.34)
2004 17.49 (0.15) 2.23 2.08 -- (0.77) (0.77)
2003 13.54 (0.17) 4.36 4.19 -- (0.24) (0.24)
2002 16.24 (0.14) (2.56) (2.70) -- -- --
2001 16.07 (0.18) 0.93 0.75 -- (0.58) (0.58)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
------------------------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income/ Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses (b) Rate
----------- ------- ------ ------- ---------- ------ ------------ ----
CLASS A
2006(c) $0.00(d) $19.60 8.2% $ 843,355 0.57%(e) 1.42%(e)(f) 6%
2005 0.00(d) 18.11 (0.2) 1,063,137 0.08 1.40 3
2004 0.00(d) 19.49 12.8 1,261,293 (0.11) 1.39 12
2003 -- 17.97 31.9 1,255,668 (0.35) 1.44(g) 8
2002 -- 13.81 (16.0) 1,024,452 (0.28) 1.40 16
2001 -- 16.43 5.4 1,267,975 (0.30) 1.40 29
CLASS B
2006(c) $0.00(d) $18.63 7.8% $ 16,901 (0.04)%(e) 2.17%(e)(f) 6%
2005 0.00(d) 17.28 (0.9) 17,804 (0.67) 2.15 3
2004 0.00(d) 18.79 12.0 20,366 (0.86) 2.14 12
2003 -- 17.47 30.9 18,059 (1.10) 2.19(g) 8
2002 -- 13.53 (16.6) 10,493 (1.01) 2.16 16
2001 -- 16.23 4.6 5,505 (1.10) 2.19 29
CLASS C
2006(c) $0.00(d) $18.64 7.8% $ 13,116 (0.04)%(e) 2.17%(e)(f) 6%
2005 0.00(d) 17.29 (0.9) 14,003 (0.67) 2.15 3
2004 0.00(d) 18.80 11.9 16,400 (0.85) 2.14 12
2003 -- 17.49 30.9 14,973 (1.10) 2.19(g) 8
2002 -- 13.54 (16.6) 8,078 (1.01) 2.16 16
2001 -- 16.24 4.6 4,170 (1.08) 2.19 29
- --------------------------------------------------------------------------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for the period of less than one year is not
annualized.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios would have been 1.39% (Class A), 2.18% (Class
B), and 2.18% (Class C) for 2001. For the fiscal years ended December 31,
2002 and 2003, and the six months ended June 30, 2006, the effect of the
custodian fee credits were minimal. For the fiscal years ended December 31,
2004 and 2005, there were no custodian fee credits.
(c) For the period ended June 30, 2006, unaudited.
(d) Amount reprsents less than $0.005 per share.
(e) Annualized
(f) The Fund incurred interest expense during the six months ended June 30,
2006. If interest expense had not been incurred, the ratios of operating
expenses to average net assets would have been 1.41% (Class A), 2.16% (Class
B), and 2.16% (Class C), respectively.
(g) The Fund incurred dividend expense on securities sold short for the year
ended December 31, 2003. If dividend expense had not been incurred, the
ratios of operating expenses to average net assets would have been 1.43%
(Class A), 2.18% (Class B), and 2.18% (Class C), respectively.
See accompanying notes to financial statements.
14
THE GABELLI VALUE FUND INC.
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
Section 15(c) of the Investment Company Act of 1940, as amended (the "1940
Act"), contemplates that the Board of Directors (the "Board") of The Gabelli
Value Fund Inc. (the "Fund"), including a majority of the Directors who have no
direct or indirect interest in the investment advisory agreement and are not
"interested persons" of the Fund, as defined in the 1940 Act (the "independent
board members"), are required to annually review and re-approve the terms of the
Fund's existing investment advisory agreement and approve any newly proposed
terms therein. In this regard, the Board reviewed and re-approved, during the
most recent six month period covered by this report, the Investment Advisory
Agreement (the "Advisory Agreement") with Gabelli Funds, LLC (the "Adviser") for
the Fund.
More specifically, at a meeting held on February 15, 2006, the independent board
members, meeting in executive session with their counsel, reviewed the written
and oral information that had been made available, and considered the factors
and reached the conclusions described below relating to the selection of the
Adviser and the re-approval of the Advisory Agreement.
1. NATURE, EXTENT, AND QUALITY OF SERVICES. The independent board members
considered the nature, quality, and extent of administrative and shareholder
services performed by the Adviser, including portfolio management, supervision
of Fund operations and compliance and regulatory filings and disclosures to
shareholders, general oversight of other service providers, coordination of Fund
marketing initiatives, review of Fund legal issues, assisting the independent
board members in their capacity as directors, and other services. The
independent board members concluded that the services are extensive in nature
and that the Adviser consistently delivered a high level of service.
2. INVESTMENT PERFORMANCE OF THE FUND AND ADVISER. The independent board members
considered short-term and long-term investment performance for the Fund over
various periods of time as compared to both relevant equity indices and the
performance of the Fund's Lipper, Inc. peer group, and concluded that the
Adviser was delivering superior performance results over the long term
consistent with the long-term investment strategies being pursued by the Fund.
3. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER.
(A) COSTS OF SERVICES TO FUND: FEES AND EXPENSES. The independent board members
considered the Fund's advisory fee rate and expense ratio relative to industry
averages for the Fund's peer group category and the advisory fees charged by the
Adviser and its affiliates to other fund and non-fund clients. The independent
board members noted that the mix of services under the Advisory Agreement are
much more extensive than those under the advisory agreements for non-fund
clients. While the independent board members recognized that the advisory fee
paid by the Fund is generally at the high end of its peer group, they concluded
that the fee is acceptable based upon the qualifications, experience,
reputation, and performance of the Adviser and the moderate overall expense
ratio of the Fund.
(B) PROFITABILITY AND COSTS OF SERVICES TO ADVISER. The independent board
members considered the Adviser's overall profitability and costs, and pro-forma
estimates of the Adviser's profitability and costs attributable to the Fund (i)
as part of the Gabelli fund complex and (ii) assuming the Fund constituted the
Adviser's only investment company under its management. The independent board
members also considered whether the amount of profit is a fair entrepreneurial
profit for the management of the Fund, and noted that the Adviser has
substantially increased its resources devoted to Fund matters in response to
recently-enacted
15
regulatory requirements and new or enhanced Fund policies and procedures. The
independent board members concluded that the Adviser's profitability was at an
acceptable level, particularly in light of the high quality of the services
being provided to the Fund.
4. EXTENT OF ECONOMIES OF SCALE AS FUND GROWS. The independent board members
considered whether there have been economies of scale with respect to the
management of the Fund and whether the Fund has appropriately benefited from any
economies of scale. The independent board members noted that economies of scale
may develop for certain funds as their assets increase and their fund-level
expenses decline as a percentage of assets, but that fund-level economies of
scale may not necessarily result in Adviser-level economies of scale. The
Adviser had stated during the main meeting that the expenses incurred by the
Adviser relating to management of the Fund have increased substantially in
recent years as a percentage of advisory fees, rather than declining as might be
anticipated as the assets of the Fund increase. The independent board members
agreed that it was possible that Adviser-level expenses incurred in managing the
Fund eventually may level off or decline as a percentage of advisory fees,
especially if the assets of the Fund continue to grow beyond certain thresholds.
5. WHETHER FEE LEVELS REFLECT ECONOMIES OF SCALE. The independent board members
also considered whether the advisory fee rate is reasonable in relation to the
asset size of the Fund and any economies of scale that may exist, and concluded
that it currently was reasonable.
6. OTHER RELEVANT CONSIDERATIONS.
(A) ADVISER PERSONNEL AND METHODS. The independent board members considered the
size, education, and experience of the Adviser's staff, the Adviser's
fundamental research capabilities, and the Adviser's approach to recruiting,
training, and retaining portfolio managers and other research and management
personnel, and concluded that in each of these areas the Adviser was structured
in such a way to support the high level of services being provided to the Fund.
(B) OTHER BENEFITS TO THE ADVISER. The independent board members also considered
the character and amount of other incidental benefits received by the Adviser
and its affiliates from its association with the Fund. The independent board
members concluded that potential "fall-out" benefits that the Adviser and its
affiliates may receive, such as greater name recognition or increased ability to
obtain research services, appear to be reasonable, and may in some cases benefit
the Fund.
CONCLUSIONS. In considering the Advisory Agreement, the independent board
members did not identify any factor as all-important or all-controlling and
instead considered these factors collectively in light of the Fund's surrounding
circumstances. Based on this review, it was the judgment of the independent
board members that shareholders had received very favorable absolute and
relative performance at reasonable fees and, therefore, re-approval of the
Agreement was in the best interests of the Fund and its shareholders. As a part
of its decision making process, the independent board members noted that the
Adviser has managed the Fund since its inception, and the independent board
members believe that a long-term relationship with a capable, conscientious
adviser is in the best interests of the Fund. The independent board members
considered, generally, that shareholders invested in the Fund knowing that the
Adviser managed the Fund and knowing its investment advisory fee schedule. As
such, the independent board members considered, in particular, whether the
Adviser managed the Fund in accordance with its investment objectives and
policies as disclosed to shareholders. The independent board members concluded
that the Fund was managed by the Adviser consistent with its investment
objectives and policies. Upon conclusion of their review and discussion, the
independent board members unanimously agreed to recommend the continuation of
the Advisory Agreement for the Fund.
16
- --------------------------------------------------------------------------------
GABELLI FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. We are managed by Gabelli Funds, LLC and Gabelli Advisers, Inc.,
which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a
publicly held company that has subsidiaries that provide investment
advisory or brokerage services for a variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
GABELLI CUSTOMER?
If you apply to open an account directly with us, you will be giving us
some non-public information about yourself. The non-public information we
collect about you is:
o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include
your name, address, telephone number, social security number, bank
account number, and other information.
o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR
AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE
SERVICES TO YOU. This would include information about the shares that
you buy or redeem. If we hire someone else to provide services--like a
transfer agent--we will also have information about the transactions
that you conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers
or former customers to anyone other than our affiliates, our service
providers who need to know such information, and as otherwise permitted by
law. If you want to find out what the law permits, you can read the privacy
rules adopted by the Securities and Exchange Commission. They are in volume
17 of the Code of Federal Regulations, Part 248. The Commission often posts
information about its regulations on its web site, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the
people who need to know that information in order to provide services to
you or the Fund and to ensure that we are complying with the laws governing
the securities business. We maintain physical, electronic, and procedural
safeguards to keep your personal information confidential.
- --------------------------------------------------------------------------------
GABELLI FAMILY OF FUNDS
VALUE _______________________________________
GABELLI ASSET FUND
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND
Seeks long term growth of capital through investment primarily in the common
stocks of established companies which are temporarily out of favor. The fund's
objective is to identify a catalyst or sequence of events that will return the
company to a higher value.
(MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA
WESTWOOD EQUITY FUND
Seeks to invest primarily in the common stock of well-seasoned companies that
have recently reported positive earnings surprises and are trading below
Westwood's proprietary growth rate estimates. The Fund's primary objective is
capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE
FOCUSED VALUE _______________________________
GABELLI VALUE FUND
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
SMALL CAP VALUE _____________________________
GABELLI SMALL CAP FUND
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $1 billion) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
WESTWOOD SMALLCAP EQUITY FUND
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $2.5 billion or less. The Fund's primary objective is long-term capital
appreciation. (MULTICLASS) TEAM MANAGED
GABELLI WOODLAND SMALL CAP VALUE FUND
Seeks to invest primarily in the common stocks of smaller companies (market
capitalizations less than $1.5 billion) believed to be undervalued with
shareholder oriented management teams that are employing strategies to grow the
company's value. The Fund's primary objective is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
GROWTH ______________________________________
GAMCO GROWTH FUND
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GAMCO INTERNATIONAL GROWTH FUND
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN
AGGRESSIVE GROWTH ___________________________
GAMCO GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing on
the globalization and interactivity of the world's marketplace. The Fund invests
in companies at the forefront of accelerated growth. The Fund's primary
objective is capital appreciation. (MULTICLASS) TEAM MANAGED
MICRO-CAP ___________________________________
WESTWOOD MIGHTY MITES(SM) FUND
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(MULTICLASS) TEAM MANAGED
EQUITY INCOME _______________________________
GABELLI EQUITY INCOME FUND
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays monthly dividends and seeks a high level of total return with an
emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
WESTWOOD BALANCED FUND
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE
MARK FREEMAN, CFA
WESTWOOD INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (MULTICLASS) TEAM MANAGED
SPECIALTY EQUITY ____________________________
GAMCO GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are convertible
into common stock of foreign and domestic companies. The Fund's primary
objective is total return through a combination of current income and capital
appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in revenues
and earnings and potential for above average capital appreciation or are
undervalued. The Fund's primary objective is capital appreciation.
(MULTICLASS) TEAM MANAGED
SECTOR ______________________________________
GAMCO GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world - targeting
undervalued companies with strong earnings and cash flow dynamics. The Fund's
primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GOLD FUND
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial, and political factors. (MULTICLASS)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI UTILITIES FUND
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (MULTICLASS) TEAM MANAGED
MERGER AND ARBITRAGE ________________________
GABELLI ABC FUND
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss.
(NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
CONTRARIAN___________________________________
GAMCO MATHERS FUND
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (CLASS AAA-NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
COMSTOCK CAPITAL VALUE FUND
Seeks capital appreciation and current income. The Fund may use either long or
short positions to achieve its objective.
(MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA
COMSTOCK STRATEGY FUND
The Fund emphasizes investments in debt securities, which maximize total return
in light of credit risk, interest rate risk, and the risk associated with the
length of maturity of debt instruments. (MULTICLASS)
PORTFOLIO MANAGER: MARTIN WEINER, CFA
FIXED INCOME ________________________________
WESTWOOD INTERMEDIATE BOND FUND
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return.
(MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA
CASH MANAGEMENT-MONEY MARKET ________________
GABELLI U.S. TREASURY MONEY MARKET FUND
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
AN INVESTMENT IN THE ABOVE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
THE FUNDS MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY
ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION,
ECONOMIC, AND POLITICAL RISKS.
TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE GABELLI VALUE FUND INC.
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value available
daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT,
EXECUTIVE OFFICER PROFESSOR EMERITUS
GAMCO INVESTORS, INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT SECRETARY
Agnes Mullady Peter D. Goldstein
TREASURER CHIEF COMPLIANCE OFFICER
CUSTODIAN
Mellon Trust of New England, N.A.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
DISTRIBUTOR
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.
- --------------------------------------------------------------------------------
GAB409Q206SR
[GRAPHIC OMITTED] E P
Gabelli Triangle P M
MANAGEMENT S V
CASH FLOW
RESEARCH
THE
GABELLI
VALUE
FUND
INC.
SEMI-ANNUAL REPORT
JUNE 30, 2006
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Value Fund Inc.
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 1, 2006
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 1, 2006
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer & Treasurer
Date September 1, 2006
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.