N-Q 1 t77867_nq.htm FORM N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
 REGISTERED MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file Number 811-01807
 
Value Line Larger Companies, Inc.
(Exact name of registrant as specified in charter)
 
7 Times Square, New York, NY 10036
 
Mitchell E. Appel
(Name and address of agent for service)
 
Registrant’s telephone number, including area code:  212-907-1900
 
Date of fiscal year end: December 31
 
Date of reporting period: September 30, 2013
 
 
 

 

 
Item 1: Schedule of Investments.
A copy of Schedule of Investments for the period ended 9/30/13 is included with this Form.
   
Value Line Larger Companies Fund, Inc.
  
   
Schedule of Investments (unaudited)
September 30, 2013
               
Shares
      
Value
  
COMMON STOCKS (96.7%)
        
     
CONSUMER DISCRETIONARY (18.0%)
        
 
5,000
  
AutoZone, Inc. *
  
$
2,113,650
  
 
60,000
  
Comcast Corp. Class A
    
2,602,200
  
 
42,000
  
DIRECTV *
    
2,509,500
  
 
41,000
  
Las Vegas Sands Corp.
    
2,723,220
  
 
24,000
  
McDonald's Corp.
    
2,309,040
  
 
40,000
  
NIKE, Inc. Class B
    
2,905,600
  
 
3,000
  
Priceline.com, Inc. *
    
3,032,850
  
 
13,000
  
Ralph Lauren Corp.
    
2,141,490
  
 
39,000
  
Starbucks Corp.
    
3,001,830
  
 
33,000
  
Target Corp.
    
2,111,340
  
 
50,000
  
TJX Companies, Inc. (The)
    
2,819,500
  
 
30,000
  
Viacom, Inc. Class B
    
2,507,400
  
 
36,000
  
Walt Disney Co. (The)
    
2,321,640
  
 
28,000
  
Yum! Brands, Inc.
    
1,998,920
  
           
35,098,180
  
     
CONSUMER STAPLES (4.5%)
        
 
24,000
  
Costco Wholesale Corp.
    
2,762,880
  
 
24,000
  
CVS Caremark Corp.
    
1,362,000
  
 
44,000
  
General Mills, Inc.
    
2,108,480
  
 
31,000
  
PepsiCo, Inc.
    
2,464,500
  
           
8,697,860
  
               
     
ENERGY (7.9%)
        
 
33,000
  
Cameron International Corp. *
    
1,926,210
  
 
16,000
  
Chevron Corp.
    
1,944,000
  
 
39,000
  
Enterprise Products Partners L.P.
    
2,380,560
  
 
15,000
  
EOG Resources, Inc.
    
2,539,200
  
 
26,000
  
Exxon Mobil Corp.
    
2,237,040
  
 
28,000
  
Schlumberger Ltd.
    
2,474,080
  
 
45,000
  
TransCanada Corp. (1)
    
1,977,300
  
           
15,478,390
  
     
FINANCIALS (7.6%)
        
 
19,000
  
American Tower Corp. REIT
    
1,408,470
  
 
8,000
  
BlackRock, Inc.
    
2,164,960
  
 
37,000
  
Capital One Financial Corp.
    
2,543,380
  
 
30,000
  
Franklin Resources, Inc.
    
1,516,500
  
 
48,000
  
JPMorgan Chase & Co.
    
2,481,120
  
 
21,700
  
M&T Bank Corp.
    
2,428,664
  
 
65,000
  
U.S. Bancorp
    
2,377,700
  
           
14,920,794
  
     
HEALTH CARE (14.9%)
        
 
20,000
  
Actavis, Inc. *
    
2,880,000
  
 
23,000
  
Allergan, Inc.
    
2,080,350
  
 
23,000
  
Amgen, Inc.
    
2,574,620
  
 
10,000
  
Biogen Idec, Inc. *
    
2,407,600
  
 
45,000
  
Bristol-Myers Squibb Co.
    
2,082,600
  
 
36,000
  
Express Scripts Holding Co. *
    
2,224,080
  
 
46,000
  
Gilead Sciences, Inc. *
    
2,890,640
  
 
21,000
  
McKesson Corp.
    
2,694,300
  
 
27,000
  
Novartis AG ADR
    
2,071,170
  
 
15,000
  
Novo Nordisk A/S ADR
    
2,538,300
  
 
21,000
  
Thermo Fisher Scientific, Inc.
    
1,935,150
  
 
38,000
  
UnitedHealth Group, Inc.
    
2,721,180
  
           
29,099,990
  
               
Shares
      
Value
  
     
INDUSTRIALS (11.9%)
        
 
45,000
  
ADT Corp. (The)
  
$
1,829,700
  
 
22,000
  
Boeing Co. (The)
    
2,585,000
  
 
25,000
  
Canadian National Railway Co.
    
2,534,250
  
 
39,000
  
Danaher Corp.
    
2,703,480
  
 
53,085
  
Expeditors International of
        
     
Washington, Inc.
    
2,338,925
  
 
21,000
  
FedEx Corp.
    
2,396,310
  
 
11,000
  
Precision Castparts Corp.
    
2,499,640
  
 
40,000
  
Tyco International Ltd.
    
1,399,200
  
 
15,000
  
Union Pacific Corp.
    
2,330,100
  
 
25,000
  
United Technologies Corp.
    
2,695,500
  
           
23,312,105
  
     
INFORMATION TECHNOLOGY (22.3%)
        
 
34,000
  
Accenture PLC Class A
    
2,503,760
  
 
6,500
  
Apple, Inc.
    
3,098,875
  
 
49,700
  
ARM Holdings PLC ADR (1)
    
2,391,564
  
 
36,000
  
Cognizant Technology Solutions
        
     
Corp. Class A *
    
2,956,320
  
 
40,000
  
eBay, Inc. *
    
2,231,600
  
 
95,000
  
EMC Corp.
    
2,428,200
  
 
3,700
  
Google, Inc. Class A *
    
3,240,867
  
 
91,000
  
Intel Corp.
    
2,085,720
  
 
12,000
  
International Business Machines
        
     
Corp.
    
2,222,160
  
 
33,900
  
Intuit, Inc.
    
2,247,909
  
 
36,071
  
Motorola Solutions, Inc.
    
2,141,896
  
 
64,000
  
Oracle Corp.
    
2,122,880
  
 
36,000
  
QUALCOMM, Inc.
    
2,424,960
  
 
49,000
  
Salesforce.com, Inc. *
    
2,543,590
  
 
29,900
  
SAP AG ADR (1)
    
2,210,208
  
 
55,000
  
Texas Instruments, Inc.
    
2,214,850
  
 
13,000
  
Visa, Inc. Class A
    
2,484,300
  
 
24,000
  
VMware, Inc. Class A *
    
1,941,600
  
           
43,491,259
  
     
MATERIALS (6.7%)
        
 
18,000
  
Air Products & Chemicals, Inc.
    
1,918,260
  
 
32,000
  
BHP Billiton Ltd. ADR (1)
    
2,128,000
  
 
33,000
  
E.I. du Pont de Nemours & Co.
    
1,932,480
  
 
30,000
  
Ecolab, Inc.
    
2,962,800
  
 
22,000
  
Monsanto Co.
    
2,296,140
  
 
16,000
  
Praxair, Inc.
    
1,923,360
  
           
13,161,040
  
     
TELECOMMUNICATION SERVICES (2.0%)
    
 
  
 
92,000
  
America Movil S.A.B. de C.V.
        
     
Series L, ADR (1)
    
1,822,520
  
 
50,000
  
BCE, Inc. (1)
    
2,135,000
  
           
3,957,520
  
     
UTILITIES (0.9%)
        
 
26,333
  
Duke Energy Corp.
    
1,758,518
  
     
TOTAL COMMON STOCKS
        
     
(Cost $118,384,588) (96.7%)
    
188,975,656
  
 
1
 

 

 
 
Value Line Larger Companies Fund, Inc.
 
September 30, 2013
               
Principal
Amount
       Value  
SHORT-TERM INVESTMENTS (7.1%)
        
     
REPURCHASE AGREEMENTS (3.2%)
        
$
 6,300,000
  
With Morgan Stanley, 0.02%,
        
     
dated 09/30/13, due 10/01/13,
        
     
delivery value $6,300,004
        
     
(collateralized by $6,400,000
        
     
U.S. Treasury Notes 1.000% due
        
     
03/31/17, with a value of
        
     
$6,431,926)
  
$
6,300,000
  
               
     
JOINT REPURCHASE AGREEMENTS
(INVESTMENTS OF CASH COLLATERAL FOR
SECURITIES ON LOAN) (3.9%)
        
 
2,776,042
  
Joint Repurchase Agreement with Morgan
        
     
Stanley, 0.05%, dated 09/30/13, due
        
     
10/01/13, delivery value $2,776,046
        
     
(collateralized by $2,831,563 U.S.
        
     
Treasury STRIPS Zero Coupon Notes
        
     
due 11/15/15 - 08/15/23, U.S. Treasury
        
     
Notes 0.250% - 1.250% due 09/15/15 -
        
     
09/30/15, and U.S. Treasury Bonds
        
     
6.125% due 11/15/27, with a value of
        
     
$2,802,549)
    
2,776,042
  
 
2,902,225
  
Joint Repurchase Agreement with
        
     
Barclays, 0.06%, dated 09/30/13, due
        
     
10/01/13, delivery value $2,902,230
        
     
(collateralized by $2,960,279 U.S.
        
     
Treasury Inflation Indexed Notes
        
     
0.500% due 04/15/15, with a value of
        
     
$2,953,646)
    
2,902,225
  
 
1,892,756
  
Joint Repurchase Agreement with Credit
        
     
Suisse First Boston, 0.05%, dated
        
     
09/30/13, due 10/01/13, delivery value
        
     
$1,892,758 (collateralized by
        
     
$1,930,798 U.S. Treasury Notes
        
     
0.250% due 10/15/15, with a value of
        
     
$1,928,581)
    
1,892,756
  
           
7,571,023
  
     
TOTAL SHORT-TERM
        
     
INVESTMENTS
        
     
(Cost $13,871,023) (7.1%)
    
13,871,023
  
     
TOTAL INVESTMENT
        
     
SECURITIES (103.8%)
        
     
(Cost $132,255,611)
  
$
202,846,679
  
EXCESS OF LIABILITIES OVER CASH AND
        
OTHER ASSETS (-3.8%)
    
(7,491,137
 )
NET ASSETS (2) (100%)
  
$
195,355,542
  
NET ASSET VALUE OFFERING AND
        
REDEMPTION PRICE, PER OUTSTANDING
        
SHARE
        
($195,355,542 ÷ 8,398,786 shares outstanding)
  
$
23.26
  
 
*
Non-income producing.
(1)
A portion or all of the security was held on loan. As of September 30, 2013, the market value of the securities on loan was $7,382,456.
(2)
For federal income tax purposes, the aggregate cost was $132,255,611, aggregate gross unrealized appreciation was $71,122,341, aggregate gross unrealized depreciation was $531,273 and the net unrealized appreciation was $70,591,068.
ADR
American Depositary Receipt.
REIT
Real Estate Investment Trust.
STRIPS
Separate Trading of Registered Interest and Principal Securities.
 
2
 

 

 
The Fund follows fair valuation accounting standards (FASB ASC 820-10) which establish a definition of fair value and set out a hierarchy for measuring fair value.  These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period.  These inputs are summarized in the three broad levels listed below:
 
●
Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date;
●
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;
●
Level 3 – Inputs that are unobservable.
 
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
The following table summarizes the inputs used to value the Fund’s investments in securities as of September 30, 2013:
 
Investments in Securities:
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Assets
                        
Common Stocks
   $ 188,975,656     $ 0     $ 0     $ 188,975,656  
Short-Term Investments
     0       13,871,023       0       13,871,023  
     Total Investments in Securities
   $ 188,975,656     $ 13,871,023     $ 0     $ 202,846,679  
 
The Fund follows the updated provisions surrounding fair value measurements and disclosures on transfers in and out of all levels of the fair value hierarchy on a gross basis and the reasons for the transfers as well as to disclosures about the valuation techniques and inputs used to measure fair value for investments that fall in either Level 2 or Level 3 of the fair value hierarchy.
 
The Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.
 
The amounts and reasons for all transfers in and out of each level within the three-tier hierarchy are disclosed when the Fund had an amount of total transfers during the reporting period that was meaningful in relation to its net assets as of the end of the reporting period. An investment asset’s or liability’s level within the fair value hierarchy is based on the lowest level input, individually or in aggregate, that is significant to fair value measurement. The objective of fair value measurement remains the same even when there is a significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation techniques used.
 
For the period ended September 30, 2013 there were no Level 3 investments. The Schedule of Investments includes a breakdown of the Schedule’s investments by category.
 
 
 

 

 
Item 2. Controls and Procedures.
(a)  
The registrant’s principal executive officer and principal financial officer have concluded that the   registrant’s disclosure controls and procedures (as defined in rule 30a-2(c) under the Act (17 CFR 270.30a-2(c) ) based on their evaluation of these controls and procedures as of the date within 90 days of filing date of this report, are approximately designed to ensure that material information relating to the registrant is made known to such officers and are operating effectively.
 
(b)  
The registrant’s principal executive officer and principal financial officer have determined that there have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including corrective actions with regard to significant deficiencies and material weaknesses.
 
Item 3. Exhibits:
(a)  
Certifications of principal executive officer and principal financial officer of the registrant.
 
 
 

 

 
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.
     
By /s/ Mitchell E. Appel  
  Mitchell E. Appel, President  
     
Date: November 25, 2013  
 
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:  /s/ Mitchell E. Appel  
 
Mitchell E. Appel, President, Principal Executive Officer
     
By:  /s/ Emily D. Washington  
  Emily D. Washington, Treasurer, Principal Financial Officer
     
Date: November 25, 2013