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 811-719
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Value Line Premier Growth Fund, Inc.
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(Exact name of registrant as specified in charter)
220 East 42nd Street, New York, N.Y. 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-907-1500
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Date of fiscal year end: December 31, 2006
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Date of reporting period: December 31, 2006
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Item I. Reports to Stockholders.
A copy of the Annual Report to Stockholders for the period ended 12/31/06
is included with this Form.
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ANNUAL REPORT
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December 31, 2006
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Value Line Premier Growth Fund, Inc.
[LOGO]
----------
VALUE LINE
No-Load
Mutual
Funds
Value Line Premier Growth Fund, Inc.
To Our Value Line Premier
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To Our Shareholders:
The Value Line Premier Growth Fund (the "Fund") earned a total return of 10.68%
in 2006, versus a total return of 15.79% for the Standard & Poor's 500(1).
For the five years ended December 31, 2006, your Fund earned an average annual
total return of 9.95%, versus 6.19% for the S&P 500. For ten years, the Fund
earned an annualized 13.09% return, versus 8.42% for the S&P 500.
The Fund continued to do well versus its peer group, the Lipper
Mid-Capitalization Growth Category(2). For the 2006 year, according to mutual
fund analysis company Lipper Inc., the Fund ranked in the top 29% of its
category. Looking at the longer term, the Fund ranks in the top 11% for the five
years ending December 31, 2006, and in the top 3% for ten years.
Our disciplined strategy is responsible for the rewarding results. We focus on
stocks with strong earnings momentum and strong stock price momentum. In
addition, we favor stocks with a multi-year history of consistent growth. Most
important, we emphasize defense as well as offense, quickly selling any holding
that no longer meets our criteria. With approximately 400 holdings in the
portfolio, we do not form attachments to any particular stock. Laggards are
rapidly replaced with issues showing superior momentum.
Representatives of nearly all economic sectors and a variety of company sizes
are included in the Fund. No single holding accounts for as much as 1% of
assets, translating into wide portfolio diversification. By market
capitalization, the year-end breakdown of stockholdings was 35% large-cap, 50%
mid-cap, and 15% small-cap.
Your Fund celebrated its 50th anniversary in the past year, and Steve Grant has
now been the lead portfolio manager for over ten years. We believe our
disciplined investment process will continue to serve you well. Thank you for
investing with us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
January 31, 2007
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(1) The Standard & Poor's 500 Index consists of 500 stocks which are traded on
the New York Stock Exchange, American Stock Exchange and the NASDAQ
National Market System and is representative of the broad stock market.
This is an unmanaged index and does not reflect charges, expenses or
taxes, and it is not possible to directly invest in this index.
(2) The Lipper Mid-Cap Growth Fund Index is a composite of funds that, by
portfolio practice, invest at least 75% of their equity assets in
companies with market capitalizations (on a three-year weighted basis)
less than 300% of the dollar-weighted median market capitalization of the
middle 1,000 securities of the S&P Super Composite 1500 Index. Mid-cap
growth funds typically have an above-average price-to-earnings ratio,
price-to-book ratio, and three-year sales-per-share growth value, compared
to the S&P Mid-Cap 400 Index.
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2
Value Line Premier Growth Fund, Inc.
Growth Fund Shareholders
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Economic Observations
The economy slowed markedly over the final three quarters of 2006, with growth
decelerating from 5.6% in the opening period, to 2.6% in the second three
months, and to just 2.0% and 2.2%, respectively, during the year's closing two
quarters. Further Federal Reserve monetary tightening and soaring oil prices
were initially responsible for the sharp slowdown in the nation's gross domestic
product growth. Later on it was a downward spiral in the housing market that
proved to be the primary culprit.
Now, as we start a new year, we find that the Fed is still on hold: oil prices
seem to be stabilizing in the $55-$65 a barrel range: and there are signs that
the aggregate economy is pressing forward at a modest, but seemingly
sustainable, rate of 2.5%, or so. In our view, such a rate of GDP growth would
allow corporate earnings to move modestly higher, but would be insufficient to
push inflation up sharply.
Helping to sustain this prospective level of economic growth should be solid
levels of activity in the retail sector, comparative stability in oil prices,
and a steady monetary course at the Federal Reserve. The nation's business
expansion is likely to be restrained, however, by weak housing demand, softness
in the auto sector, and sluggish industrial activity.
Gross domestic product growth along these lines and accompanying subdued
inflation probably would have positive ramifications for the stock and bond
markets.
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Performance data shown represents past performance and is no guarantee of future
results. Investment return and principle value will fluctuate, so you may have a
gain or loss when shares are sold. Current performance may be higher or lower
than that quoted. Visit vlfunds.com for most recent month-end performance.
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3
Value Line Premier Growth Fund, Inc.
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FUND EXPENSES (unaudited):
Example
As a shareholder of the Fund, you incur ongoing costs, including management
fees; distribution and service (12b-1) fees; and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2006 through December 31, 2006).
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. 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 in
the first line under the heading "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare 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 the shareholder reports
of the 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. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if transactional
costs were included, your costs would have been higher.
Expenses* paid
Beginning Ending during period
account value account value 7/1/06 thru
7/1/06 12/31/06 12/31/06
--------------- --------------- ---------------
Actual ........................................... $ 1,000.00 $ 1,039.80 $ 6.32
Hypothetical (5% return before expenses) ......... $ 1,000.00 $ 1,019.00 $ 6.26
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* Expenses are equal to the Fund's annualized expense ratio of 1.23%,
multiplied by the average account value over the period, multiplied by
184/365 to reflLect the one-half period. This expense ratio may differ
from the expense ratio shown in the Financial Highlights.
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4
Value Line Premier Growth Fund, Inc.
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The following graph compares the performance of the Value Line Premier Growth
Fund, Inc. to that of the S&P 500 Index. The Value Line Premier Growth Fund,
Inc. is a professionally managed mutual fund, while the Index is not available
for investment and is unmanaged. The returns for the Index do not reflect
charges, expenses or taxes but do include the reinvestment of dividends. The
comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment
in the Value Line Premier Growth Fund, Inc. and the S&P 500 Index*
[THE FOLLOWING WAS DEPICTED BY A LINE CHART IN THE PRINTED MATERIAL]
Value Line
Premier Growth S&P 500
Fund, Inc. Stock Index
-------------- -----------
1/1/1997 10,000 10,000
3/31/1997 9,543 10,267
6/30/1997 11,207 12,059
9/30/1997 13,666 12,963
12/31/1997 13,210 13,336
3/31/1998 15,545 15,196
6/30/1998 15,892 15,698
9/30/1998 13,456 14,136
12/31/1998 17,157 17,146
3/31/1999 17,952 18,001
6/30/1999 19,958 19,270
9/30/1999 20,075 18,066
12/31/1999 27,736 20,755
3/31/2000 31,135 21,231
6/30/2000 29,978 20,666
9/30/2000 31,360 20,466
12/31/2000 25,856 18,865
3/31/2001 20,619 16,628
6/30/2001 23,046 17,601
9/30/2001 19,071 15,018
12/31/2001 21,293 16,623
3/31/2002 21,551 16,669
6/30/2002 20,450 14,435
9/30/2002 18,124 11,941
12/31/2002 18,068 12,949
3/31/2003 17,877 12,541
6/30/2003 19,899 14,472
9/30/2003 21,169 14,854
12/31/2003 23,416 16,663
3/31/2004 24,956 16,945
6/30/2004 25,315 17,237
9/30/2004 24,855 16,914
12/31/2004 27,729 18,475
3/31/2005 27,283 18,079
6/30/2005 28,359 18,326
9/30/2005 30,201 18,987
12/31/2005 30,916 19,383
3/31/2006 33,911 20,199
6/30/2006 32,909 19,909
9/30/2006 32,329 21,036
12/31/2006 34,219 22,445
* The Standard and Poor's 500 Index (S&P 500 Index) is an unmanaged index
that is representative of the larger capitalization stocks traded in the
United States.
The return for the index does not reflect expenses which are deducted from
the Fund's returns.
Performance Data:**
Average Annual Growth of an Assumed
Total Return Investment of $10,000
---------------- ----------------------
1 year ended 12/31/06 ........... 10.68% $11,068
5 years ended 12/31/06 .......... 9.95% $16,071
10 years ended 12/31/06 ......... 13.09% $34,219
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** The performance data quoted represent past performance and are no
guarantee of future performance. The average annual total returns and
growth of an assumed investment of $10,000 include dividends reinvested
and capital gains distributions accepted in shares. The investment return
and principal value of an investment will fluctuate so that an investment,
when redeemed, may be worth more or less than its original cost. The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
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5
Value Line Premier Growth Fund, Inc.
Portfolio Highlights at December 31, 2006 (unaudited)
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Ten Largest Holdings
Percentage of
Issue Shares Value Net Assets
- ------------------------------------------------------ --------- -------------- --------------
Hansen Natural Corp. ................................. 120,000 $ 4,041,600 0.83%
Tenaris S.A. (ADR) ................................... 77,500 $ 3,866,475 0.79%
Cognizant Technology Solutions Corp. Class A ......... 50,000 $ 3,858,000 0.79%
Sonic Corp. .......................................... 126,562 $ 3,031,160 0.62%
Celgene Corp. ........................................ 52,000 $ 2,991,560 0.61%
Landstar System, Inc. ................................ 76,000 $ 2,901,680 0.59%
Henry Schein, Inc. ................................... 56,000 $ 2,742,880 0.56%
Penn National Gaming, Inc. ........................... 64,000 $ 2,663,680 0.54%
Sears Holdings Corp. ................................. 15,400 $ 2,586,122 0.53%
NII Holdings, Inc. Class B ........................... 39,000 $ 2,513,160 0.51%
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Asset Allocation -- Percentage of Net Assets
[THE FOLLOWING WAS DEPICTED BY A PIE CHART IN THE PRINTED MATERIAL]
Common Stocks 93.0%
Cash & Other 7.0%
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Sector Weightings -- Percentage of Total Investment Securities
[THE FOLLOWING WAS DEPICTED BY A BAR CHART IN THE PRINTED MATERIAL]
Consumer, Non-cyclical 20.2%
Industrial 19.2%
Financial 18.6%
Consumer, Cyclical 15.6%
Communications 7.1%
Energy 6.3%
Technology 5.1%
Basic Materials 5.0%
Utilities 2.7%
Diversified 0.2%
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6
Value Line Premier Growth Fund, Inc.
Schedule of Investments December 31, 2006
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Shares Value
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COMMON STOCKS (93.0%)
ADVERTISING (0.6%)
31,000 aQuantive, Inc.* .................................. $ 764,460
15,000 Focus Media Holding Ltd. ADR* ..................... 995,850
17,000 R.H. Donnelley Corp.* ............................. 1,066,410
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2,826,720
AEROSPACE/DEFENSE (2.5%)
28,000 Armor Holdings, Inc.* ............................. 1,535,800
36,000 BE Aerospace, Inc.* ............................... 924,480
13,000 Boeing Co. (The) .................................. 1,154,920
12,989 DRS Technologies, Inc. ............................ 684,261
12,200 Esterline Technologies Corp.* ..................... 490,806
15,600 General Dynamics Corp. ............................ 1,159,860
12,500 L-3 Communications Holdings, Inc. 1,022,250
11,000 Lockheed Martin Corp. ............................. 1,012,770
23,800 Precision Castparts Corp. ......................... 1,863,064
19,600 Rockwell Collins, Inc. ............................ 1,240,484
27,000 Teledyne Technologies, Inc.* ...................... 1,083,510
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12,172,205
AIR TRANSPORT (0.4%)
9,000 FedEx Corp. ....................................... 977,580
21,300 Lan Airlines S.A. ADR ............................. 1,169,157
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2,146,737
APPAREL (1.3%)
18,000 Gildan Activewear, Inc. Class A* .................. 839,340
23,000 Guess?, Inc.* ..................................... 1,458,890
30,000 Phillips-Van Heusen Corp. ......................... 1,505,100
19,800 Polo Ralph Lauren Corp. Class A ................... 1,537,668
15,000 VF Corp. .......................................... 1,231,200
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6,572,198
AUTO & TRUCK (0.2%)
21,000 Oshkosh Truck Corp. ............................... 1,016,820
AUTO PARTS (0.7%)
13,000 Autoliv, Inc. ..................................... 783,900
16,000 BorgWarner, Inc. .................................. 944,320
20,000 Johnson Controls, Inc. ............................ 1,718,400
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3,446,620
BANK (2.3%)
35,000 Bancolombia S.A. ADR .............................. 1,090,250
25,000 Bank of Hawaii Corp. .............................. 1,348,750
39,000 Colonial BancGroup, Inc. (The) .................... 1,003,860
21,000 Compass Bancshares, Inc. .......................... 1,252,650
32,000 ICICI Bank Ltd. ADR ............................... 1,335,680
5,000 Kookmin Bank ADR* ................................. 403,200
8,600 M&T Bank Corp. .................................... 1,050,576
17,500 Mercantile Bankshares Corp. ....................... 818,825
22,000 SVB Financial Group* .............................. 1,025,640
30,000 Wells Fargo & Co. ................................. 1,066,800
19,000 Wilmington Trust Corp. ............................ 801,230
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11,197,461
BANK -- CANADIAN (0.6%)
13,300 Bank of Montreal .................................. 787,227
17,300 Bank of Nova Scotia ............................... 775,040
23,400 Royal Bank of Canada .............................. 1,115,010
7,400 Toronto-Dominion Bank (The) ....................... 443,038
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3,120,315
BANK -- FOREIGN (0.7%)
65,500 Banco Itau Holding Financeira S.A.
ADR ............................................. 2,367,825
53,000 Banco Santander Central Hispano
S.A. ADR ........................................ 988,980
5,500 Banco Santander Chile S.A. ADR .................... 264,880
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3,621,685
BANK -- MIDWEST (0.6%)
18,690 Commerce Bancshares, Inc. ......................... 904,783
21,000 Marshall & Ilsley Corp. ........................... 1,010,310
17,900 Northern Trust Corp. .............................. 1,086,351
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3,001,444
BEVERAGE -- ALCOHOLIC (0.2%)
13,600 Brown-Forman Corp. Class B ........................ 900,864
See Notes to Financial Statements.
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7
Value Line Premier Growth Fund, Inc.
Schedule of Investments
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Shares Value
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BEVERAGE -- SOFT DRINK (1.5%)
29,000 Companhia de Bebidas das
Americas ADR .................................... $ 1,415,200
10,000 Fomento Economico Mexicano
S.A.B. de C.V. ADR Unit 1
Ser. B .......................................... 1,157,600
120,000 Hansen Natural Corp.* ............................. 4,041,600
15,000 PepsiCo, Inc. ..................................... 938,250
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7,552,650
BIOTECHNOLOGY (0.5%)
18,000 Techne Corp.* ..................................... 998,100
17,800 United Therapeutics Corp.* ........................ 967,786
14,000 Vertex Pharmaceuticals, Inc.* ..................... 523,880
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2,489,766
BUILDING MATERIALS (1.0%)
7,400 Fluor Corp. ....................................... 604,210
2,000 Granite Construction, Inc. ........................ 100,640
20,000 Jacobs Engineering Group, Inc.* ................... 1,630,800
17,000 NCI Building Systems, Inc.* ....................... 879,750
24,000 Simpson Manufacturing Company,
Inc. ............................................ 759,600
18,300 Washington Group International,
Inc.* ........................................... 1,094,157
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5,069,157
CABLE TV (0.6%)
25,000 Comcast Corp. Class A* ............................ 1,058,250
18,900 Rogers Communications, Inc.
Class B ......................................... 1,126,440
20,300 Shaw Communications, Inc.
Class B ......................................... 643,713
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2,828,403
CANADIAN ENERGY (1.2%)
23,000 Nexen, Inc. ....................................... 1,265,000
7,000 Petro-Canada ...................................... 287,280
28,000 Suncor Energy, Inc. ............................... 2,209,480
77,000 Talisman Energy, Inc. ............................. 1,308,230
26,000 TransCanada Corp. ................................. 908,700
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5,978,690
CEMENT & AGGREGATES (1.0%)
30,000 Cemex S.A. de C.V. ADR* ........................... 1,016,400
24,900 Eagle Materials, Inc. ............................. 1,076,427
10,650 Florida Rock Industries, Inc. ..................... 458,483
12,000 Martin Marietta Materials, Inc. ................... 1,246,920
11,000 Vulcan Materials Co. .............................. 988,570
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4,786,800
CHEMICAL -- DIVERSIFIED (0.9%)
15,000 Air Products & Chemicals, Inc. .................... 1,054,200
22,000 Albemarle Corp. ................................... 1,579,600
6,000 Bayer AG ADR ...................................... 320,160
28,000 Monsanto Co. ...................................... 1,470,840
1,600 Veolia Environnement ADR .......................... 120,416
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4,545,216
CHEMICAL -- SPECIALTY (1.5%)
29,000 Airgas, Inc. ...................................... 1,175,080
26,000 Ecolab, Inc. ...................................... 1,175,200
9,000 H.B. Fuller Co. ................................... 232,380
30,000 Praxair, Inc. ..................................... 1,779,900
8,000 Sherwin-Williams Co. (The) ........................ 508,640
15,000 Sigma-Aldrich Corp. ............................... 1,165,800
36,800 Syngenta AG ADR ................................... 1,366,752
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7,403,752
COAL (0.9%)
46,750 Joy Global, Inc. .................................. 2,259,895
53,200 Peabody Energy Corp. .............................. 2,149,812
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4,409,707
COMPUTER & PERIPHERALS (0.4%)
32,000 Hewlett-Packard Co. ............................... 1,318,080
14,000 MICROS Systems, Inc.* ............................. 737,800
-------------
2,055,880
COMPUTER SOFTWARE &
SERVICES (2.3%)
28,000 Accenture Ltd. Class A ............................ 1,034,040
30,000 ANSYS, Inc.* ...................................... 1,304,700
See Notes to Financial Statements.
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8
Value Line Premier Growth Fund, Inc.
December 31, 2006
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Shares Value
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50,000 Cognizant Technology Solutions
Corp. Class A* .................................. $ 3,858,000
17,000 DST Systems, Inc.* ................................ 1,064,710
28,400 Infosys Technologies Ltd. ADR ..................... 1,549,504
17,000 SEI Investments Co. ............................... 1,012,520
20,000 Transaction Systems Architects,
Inc.* ........................................... 651,400
48,800 Trident Microsystems, Inc.* ....................... 887,184
-------------
11,362,058
DIVERSIFIED COMPANIES (2.8%)
85,000 ABB Ltd. ADR ...................................... 1,528,300
24,000 Acuity Brands, Inc. ............................... 1,248,960
33,000 AMETEK, Inc. ...................................... 1,050,720
18,300 Brink's Co. (The) ................................. 1,169,736
23,250 Brookfield Asset Management, Inc.
Class A ......................................... 1,120,185
16,000 Danaher Corp. ..................................... 1,159,040
24,000 ESCO Technologies, Inc.* .......................... 1,090,560
9,600 Fortune Brands, Inc. .............................. 819,744
17,200 ITT Corp. ......................................... 977,304
27,750 McDermott International, Inc.* .................... 1,411,365
11,500 Textron, Inc. ..................................... 1,078,355
17,000 United Technologies Corp. ......................... 1,062,840
-------------
13,717,109
DRUG (2.0%)
8,600 Allergan, Inc. .................................... 1,029,764
22,000 Amylin Pharmaceuticals, Inc.* ..................... 793,540
52,000 Celgene Corp.* .................................... 2,991,560
18,400 Covance, Inc.* .................................... 1,083,944
12,700 Genzyme Corp.* .................................... 782,066
21,000 Gilead Sciences, Inc.* ............................ 1,363,530
24,500 Immucor, Inc.* .................................... 716,135
32,000 Pharmaceutical Product
Development, Inc. ............................... 1,031,040
-------------
9,791,579
E-COMMERCE (0.7%)
39,000 Akamai Technologies, Inc.* ........................ 2,071,680
30,000 Salesforce.com, Inc.* ............................. 1,093,500
-------------
3,165,180
EDUCATIONAL SERVICES (0.2%)
15,500 ITT Educational Services, Inc.* ................... 1,028,735
ELECTRICAL EQUIPMENT (2.4%)
11,600 Cooper Industries Ltd. Class A .................... 1,048,988
24,000 Emerson Electric Co. .............................. 1,058,160
24,000 Garmin Ltd. ....................................... 1,335,840
27,000 General Cable Corp.* .............................. 1,180,170
24,000 Harman International Industries,
Inc. ............................................ 2,397,840
14,000 Rockwell Automation, Inc. ......................... 855,120
21,500 Thomas & Betts Corp.* ............................. 1,016,520
20,800 Trimble Navigation Ltd.* .......................... 1,055,184
27,700 WESCO International, Inc.* ........................ 1,629,037
-------------
11,576,859
ELECTRICAL UTILITY -- CENTRAL (0.6%)
13,000 Entergy Corp. ..................................... 1,200,160
34,000 TXU Corp. ......................................... 1,843,140
-------------
3,043,300
ELECTRICAL UTILITY -- EAST (0.4%)
18,000 Exelon Corp. ...................................... 1,114,020
17,000 FirstEnergy Corp. ................................. 1,025,100
-------------
2,139,120
ELECTRICAL UTILITY -- WEST (0.2%)
18,500 Sempra Energy ..................................... 1,036,740
ELECTRONICS (1.0%)
20,400 Amphenol Corp. Class A ............................ 1,266,432
24,700 Diodes, Inc.* ..................................... 876,356
26,500 Harris Corp. ...................................... 1,215,290
31,000 MEMC Electronic Materials, Inc.* .................. 1,213,340
9,000 Rogers Corp.* ..................................... 532,350
-------------
5,103,768
See Notes to Financial Statements.
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9
Value Line Premier Growth Fund, Inc.
Schedule of Investments
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Shares Value
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ENTERTAINMENT (0.2%)
15,100 Central European Media Enterprises
Ltd. Class A* ................................... $ 1,057,000
ENTERTAINMENT TECHNOLOGY (0.1%)
21,000 Scientific Games Corp. Class A* ................... 634,830
ENVIRONMENTAL (0.9%)
25,000 Republic Services, Inc. ........................... 1,016,750
18,300 Stericycle, Inc.* ................................. 1,381,650
25,200 Waste Connections, Inc.* .......................... 1,047,060
28,000 Waste Management, Inc. ............................ 1,029,560
-------------
4,475,020
FINANCIAL SERVICES --
DIVERSIFIED (4.4%)
12,000 Affiliated Managers Group, Inc.* .................. 1,261,560
12,000 Ambac Financial Group, Inc. ....................... 1,068,840
15,500 American Express Co. .............................. 940,385
20,000 Barclays PLC ADR .................................. 1,162,800
10,700 BlackRock, Inc. Class A ........................... 1,625,330
42,000 Brown & Brown, Inc. ............................... 1,184,820
19,000 CIT Group, Inc. ................................... 1,059,630
2,000 Credicorp Ltd. .................................... 81,880
34,000 Eaton Vance Corp. ................................. 1,122,340
15,961 Fidelity National Information
Services, Inc. .................................... 639,876
9,000 Franklin Resources, Inc. .......................... 991,530
28,200 Global Payments, Inc. ............................. 1,305,660
18,300 HDFC Bank Ltd. ADR ................................ 1,381,284
38,000 Leucadia National Corp. ........................... 1,071,600
33,000 MoneyGram International, Inc. ..................... 1,034,880
23,000 Nuveen Investments, Inc. Class A .................. 1,193,240
19,000 Principal Financial Group, Inc. ................... 1,115,300
21,000 ProAssurance Corp.* ............................... 1,048,320
24,000 T. Rowe Price Group, Inc. ......................... 1,050,480
18,000 UBS AG ............................................ 1,085,940
-------------
21,425,695
FOOD PROCESSING (1.9%)
14,400 Bunge Ltd. ........................................ 1,044,144
24,000 Dean Foods Co.* ................................... 1,014,720
37,500 Flowers Foods, Inc. ............................... 1,012,125
30,300 Groupe Danone ADR ................................. 987,780
25,000 Herbalife Ltd.* ................................... 1,004,000
21,000 Hormel Foods Corp. ................................ 784,140
20,000 Ralcorp Holdings, Inc.* ........................... 1,017,800
41,000 United Natural Foods, Inc.* ....................... 1,472,720
19,000 Wm. Wrigley Jr. Co. ............................... 982,680
-------------
9,320,109
FOREIGN TELECOMMUNICATIONS
(0.3%)
34,000 America Movil SAB. de C.V. Ser. L
ADR ............................................. 1,537,480
HEALTH CARE INFORMATION
SYSTEMS (0.3%)
46,000 Allscripts Healthcare Solutions,
Inc.* ........................................... 1,241,540
HOME APPLIANCES (0.4%)
40,000 Toro Co. (The) .................................... 1,865,200
HOME BUILDING (0.3%)
25,600 Forest City Enterprises, Inc.
Class A ......................................... 1,495,040
HOTEL/GAMING (2.1%)
7,000 Boyd Gaming Corp. ................................. 317,170
36,000 Choice Hotels International, Inc. ................. 1,515,600
19,200 Gaylord Entertainment Co.* ........................ 977,856
2,000 InterContinental Hotels Group PLC
ADR ............................................. 50,500
27,000 International Game Technology ..................... 1,247,400
24,500 Marriott International, Inc. Class A .............. 1,169,140
10,000 MGM MIRAGE* ....................................... 573,500
64,000 Penn National Gaming, Inc.* ....................... 2,663,680
23,000 Station Casinos, Inc. ............................. 1,878,410
-------------
10,393,256
HOUSEHOLD PRODUCTS (0.4%)
24,200 Church & Dwight Company, Inc. ..................... 1,032,130
22,000 Scotts Miracle-Gro Co. (The)
Class A .......................................... 1,136,300
-------------
2,168,430
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10
Value Line Premier Growth Fund, Inc.
December 31, 2006
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
HUMAN RESOURCES (0.2%)
25,300 Watson Wyatt Worldwide, Inc.
Class A ......................................... $ 1,142,295
INDUSTRIAL SERVICES (2.5%)
28,250 Aaron Rents, Inc. Class B ......................... 813,035
26,000 Amdocs Ltd.* ...................................... 1,007,500
30,000 C.H. Robinson Worldwide, Inc. ..................... 1,226,700
48,000 CB Richard Ellis Group, Inc.
Class A* ........................................ 1,593,600
31,500 Corrections Corp. of America* ..................... 1,424,745
20,000 EMCOR Group, Inc.* ................................ 1,137,000
34,000 Expeditors International of
Washington, Inc. ................................ 1,377,000
23,000 Iron Mountain, Inc.* .............................. 950,820
21,400 Laidlaw International, Inc. ....................... 651,202
22,400 URS Corp.* ........................................ 959,840
22,500 World Fuel Services Corp. ......................... 1,000,350
-------------
12,141,792
INFORMATION SERVICES (1.2%)
19,000 Alliance Data Systems Corp.* ...................... 1,186,930
11,700 Corporate Executive Board Co.
(The) ........................................... 1,026,090
14,000 Dun & Bradstreet Corp. (The)* ..................... 1,159,060
28,000 Equifax, Inc. ..................................... 1,136,800
21,000 FactSet Research Systems, Inc. .................... 1,186,080
7,600 IHS, Inc. Class A* ................................ 300,048
-------------
5,995,008
INSURANCE -- LIFE (1.2%)
20,600 AFLAC, Inc. ....................................... 947,600
28,650 Delphi Financial Group, Inc.
Class A ......................................... 1,159,179
34,000 Manulife Financial Corp. .......................... 1,148,860
20,000 MetLife, Inc. ..................................... 1,180,200
11,700 Prudential Financial, Inc. ........................ 1,004,562
6,000 Torchmark Corp. ................................... 382,560
-------------
5,822,961
INSURANCE -- PROPERTY &
CASUALTY (3.0%)
13,000 ACE Ltd. .......................................... 787,410
18,000 Allstate Corp. (The) .............................. 1,171,980
15,000 Arch Capital Group Ltd.* .......................... 1,014,150
25,000 Assurant, Inc. .................................... 1,381,250
55,687 Berkley (W.R.) Corp. .............................. 1,921,758
20,000 Chubb Corp. (The) ................................. 1,058,200
15,117 Fidelity National Financial, Inc.
Class A ......................................... 360,994
33,750 HCC Insurance Holdings, Inc. ...................... 1,083,038
3,000 Markel Corp.* ..................................... 1,440,300
24,250 Old Republic International Corp. .................. 564,540
8,800 RLI Corp. ......................................... 496,496
16,500 SAFECO Corp. ...................................... 1,032,075
24,100 Sun Life Financial, Inc. .......................... 1,020,635
23,550 Zenith National Insurance Corp. ................... 1,104,730
-------------
14,437,556
INTERNET (0.8%)
43,000 E*Trade Financial Corp.* .......................... 964,060
5,000 Google, Inc. Class A* ............................. 2,302,400
13,000 Nutri/System, Inc.* ............................... 824,070
-------------
4,090,530
MACHINERY (2.6%)
1,700 Actuant Corp. Class A ............................. 81,005
33,700 CNH Global NV ..................................... 920,010
16,000 Flowserve Corp.* .................................. 807,520
21,300 Foster Wheeler Ltd.* .............................. 1,174,482
38,400 Gardner Denver, Inc.* ............................. 1,432,704
28,125 Graco, Inc. ....................................... 1,114,312
19,900 IDEX Corp. ........................................ 943,459
31,000 Manitowoc Company, Inc. (The) ..................... 1,842,330
20,600 MSC Industrial Direct Co., Inc.
Class A ......................................... 806,490
26,000 Roper Industries, Inc. ............................ 1,306,240
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
Value Line Premier Growth Fund, Inc.
Schedule of Investments
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
31,200 Terex Corp.* ...................................... $ 2,014,896
4,000 Watts Water Technologies, Inc.
Class A ......................................... 164,440
-------------
12,607,888
MARITIME (0.4%)
9,000 American Commercial Lines, Inc.* .................. 589,590
34,000 Kirby Corp.* ...................................... 1,160,420
-------------
1,750,010
MEDICAL SERVICES (4.1%)
24,000 Aetna, Inc. ....................................... 1,036,320
20,700 Coventry Health Care, Inc.* ....................... 1,036,035
24,000 DaVita, Inc.* ..................................... 1,365,120
4,000 Fresenius Medical Care AG & Co.
KGaA ADR ........................................ 177,720
23,000 Healthways, Inc.* ................................. 1,097,330
23,000 Humana, Inc.* ..................................... 1,272,130
36,000 inVentiv Health, Inc.* ............................ 1,272,600
17,000 Laboratory Corporation of America
Holdings* ....................................... 1,248,990
22,000 Manor Care, Inc. .................................. 1,032,240
21,000 Pediatrix Medical Group, Inc.* .................... 1,026,900
42,400 Psychiatric Solutions, Inc.* ...................... 1,590,848
36,000 Sierra Health Services, Inc.* ..................... 1,297,440
27,300 Sunrise Senior Living, Inc.* ...................... 838,656
29,850 UnitedHealth Group, Inc. .......................... 1,603,840
34,400 VCA Antech, Inc.* ................................. 1,107,336
15,000 WellCare Health Plans, Inc.* ...................... 1,033,500
23,630 WellPoint, Inc.* .................................. 1,859,445
-------------
19,896,450
MEDICAL SUPPLIES (5.5%)
25,000 ArthroCare Corp.* ................................. 998,000
12,200 Bard (C.R.), Inc. ................................. 1,012,234
14,500 Becton Dickinson & Co. ............................ 1,017,175
14,600 Cytyc Corp.* ...................................... 413,180
32,000 Dade Behring Holdings, Inc. ....................... 1,273,920
37,000 DENTSPLY International, Inc. ...................... 1,104,450
24,800 DJO, Inc.* ........................................ 1,061,936
16,000 Haemonetics Corp.* ................................ 720,320
56,000 Henry Schein, Inc.* ............................... 2,742,880
41,600 Hologic, Inc.* .................................... 1,966,848
12,000 IDEXX Laboratories, Inc.* ......................... 951,600
23,600 Illumina, Inc.* ................................... 927,716
24,000 Intuitive Surgical, Inc.* ......................... 2,301,600
22,000 Kyphon, Inc.* ..................................... 888,800
18,000 McKesson Corp. .................................... 912,600
27,000 Owens & Minor, Inc. ............................... 844,290
19,600 Palomar Medical Technologies,
Inc.* ........................................... 993,132
26,000 PolyMedica Corp. .................................. 1,050,660
26,000 ResMed, Inc.* ..................................... 1,279,720
34,000 Respironics, Inc.* ................................ 1,283,500
20,000 Varian Medical Systems, Inc.* ..................... 951,400
21,400 Ventana Medical Systems, Inc.* .................... 920,842
20,400 West Pharmaceutical Services, Inc. ................ 1,045,092
-------------
26,661,895
METALS & MINING DIVERSIFIED (0.5%)
27,000 Allegheny Technologies, Inc. ...................... 2,448,360
METALS FABRICATING (0.2%)
13,000 Harsco Corp. ...................................... 989,300
NATURAL GAS -- DISTRIBUTION (0.7%)
18,000 AGL Resources, Inc. ............................... 700,380
15,800 BG Group PLC ADR .................................. 1,081,352
33,600 Southern Union Co. ................................ 939,120
31,000 UGI Corp. ......................................... 845,680
-------------
3,566,532
NATURAL GAS -- DIVERSIFIED (1.5%)
32,000 Energen Corp. ..................................... 1,502,080
20,000 Equitable Resources, Inc. ......................... 835,000
10,000 Questar Corp. ..................................... 830,500
60,000 Southwestern Energy Co.* .......................... 2,103,000
42,776 XTO Energy, Inc. .................................. 2,012,611
-------------
7,283,191
OFFICE EQUIPMENT &
SUPPLIES (0.4%)
24,500 Office Depot, Inc.* ............................... 935,165
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
Value Line Premier Growth Fund, Inc.
December 31, 2006
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
45,000 Staples, Inc. ..................................... $ 1,201,500
-------------
2,136,665
OILFIELD SERVICES/
EQUIPMENT (0.3%)
22,000 FMC Technologies, Inc.* ........................... 1,355,860
8,000 Helix Energy Solutions Group,
Inc.* ........................................... 250,960
-------------
1,606,820
PACKAGING & CONTAINER (0.4%)
7,000 Ball Corp. ........................................ 305,200
34,000 CLARCOR, Inc. ..................................... 1,149,540
18,000 Jarden Corp.* ..................................... 626,220
-------------
2,080,960
PETROLEUM -- INTEGRATED (1.4%)
50,000 Chesapeake Energy Corp. ........................... 1,452,500
61,000 Denbury Resources, Inc.* .......................... 1,695,190
34,800 Frontier Oil Corp. ................................ 1,000,152
16,000 Petroleo Brasileiro S.A. - Petrobras
ADR ............................................. 1,647,840
16,000 Tesoro Corp. ...................................... 1,052,320
-------------
6,848,002
PETROLEUM -- PRODUCING (1.6%)
8,600 CNOOC Ltd. ADR .................................... 813,818
66,000 Range Resources Corp. ............................. 1,812,360
77,500 Tenaris S.A. ADR .................................. 3,866,475
29,000 Unit Corp.* ....................................... 1,405,050
-------------
7,897,703
PHARMACY SERVICES (0.5%)
20,000 Express Scripts, Inc.* ............................ 1,432,000
22,000 Longs Drug Stores Corp. ........................... 932,360
-------------
2,364,360
POWER (0.5%)
49,000 AES Corp. (The)* .................................. 1,079,960
58,000 Covanta Holding Corp.* ............................ 1,278,320
-------------
2,358,280
PRECISION INSTRUMENT (0.8%)
27,300 Applera Corporation - Applied
Biosystems Group ................................ 1,001,637
15,400 Mettler Toledo International, Inc.* ............... 1,214,290
38,000 Thermo Fisher Scientific, Inc.* ................... 1,721,020
-------------
3,936,947
PUBLISHING (0.4%)
18,700 Banta Corp. ....................................... 680,680
17,000 McGraw-Hill Cos, Inc. (The) ....................... 1,156,340
-------------
1,837,020
R.E.I.T. (2.3%)
9,200 AvalonBay Communities, Inc. ....................... 1,196,460
16,000 BRE Properties, Inc. .............................. 1,040,320
30,000 Brookfield Properties Co. ......................... 1,179,900
9,400 Essex Property Trust, Inc. ........................ 1,214,950
20,000 General Growth Properties, Inc. ................... 1,044,600
13,000 Global Signal, Inc. ............................... 684,710
7,958 Host Hotels & Resorts, Inc. ....................... 195,369
3,266 Kimco Realty Corp. ................................ 146,807
24,000 LaSalle Hotel Properties .......................... 1,100,400
21,000 ProLogis .......................................... 1,276,170
8,000 SL Green Realty Corp. ............................. 1,062,240
16,000 Starwood Hotels & Resorts
Worldwide, Inc. ................................. 1,000,000
-------------
11,141,926
RAILROAD (1.2%)
13,500 Burlington Northern Santa Fe Corp. 996,435
22,900 Canadian National Railway Co. ..................... 985,387
19,000 Canadian Pacific Railway Ltd. ..................... 1,002,440
22,500 Genesee & Wyoming, Inc.
Class A* ........................................ 590,400
41,000 Kansas City Southern* ............................. 1,188,180
20,000 Norfolk Southern Corp. ............................ 1,005,800
-------------
5,768,642
RECREATION (0.7%)
45,000 Pool Corp. ........................................ 1,762,650
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
13
Value Line Premier Growth Fund, Inc.
Schedule of Investments
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
56,250 Shuffle Master, Inc.* ............................. $ 1,473,750
-------------
3,236,400
RESTAURANT (1.9%)
27,000 Darden Restaurants, Inc. .......................... 1,084,590
16,500 Panera Bread Co. Class A* ......................... 922,515
28,500 RARE Hospitality International,
Inc.* ........................................... 938,505
126,562 Sonic Corp.* ...................................... 3,031,160
27,000 Starbucks Corp.* .................................. 956,340
24,376 Tim Hortons, Inc. ................................. 705,929
18,000 Wendy's International, Inc. ....................... 595,620
17,000 Yum! Brands, Inc. ................................. 999,600
-------------
9,234,259
RETAIL -- AUTOMOTIVE (0.2%)
33,600 O'Reilly Automotive, Inc.* ........................ 1,077,216
RETAIL -- SPECIAL LINES (1.8%)
45,000 Coach, Inc.* ...................................... 1,933,200
65,250 Coldwater Creek, Inc.* ............................ 1,599,930
22,500 Dick's Sporting Goods, Inc.* ...................... 1,102,275
46,400 Dress Barn, Inc. (The)* ........................... 1,082,512
22,000 GameStop Corp. Class A* ........................... 1,212,420
30,000 Men's Wearhouse, Inc. (The) ....................... 1,147,800
16,000 Pantry, Inc. (The)* ............................... 749,440
-------------
8,827,577
RETAIL BUILDING SUPPLY (0.6%)
28,000 Fastenal Co. ...................................... 1,004,640
38,000 Lowe's Cos, Inc. .................................. 1,183,700
9,200 Tractor Supply Co.* ............................... 411,332
8,700 Watsco, Inc. ...................................... 410,292
-------------
3,009,964
RETAIL STORE (1.2%)
20,000 J.C. Penney Company, Inc. ......................... 1,547,200
33,000 Nordstrom, Inc. ................................... 1,628,220
15,400 Sears Holdings Corp.* ............................. 2,586,122
-------------
SECURITIES BROKERAGE (1.6%)
8,000 Bear Stearns Companies, Inc. (The) 1,302,240
2,200 Chicago Mercantile Exchange
Holdings, Inc. .................................. 1,121,450
6,200 Goldman Sachs Group, Inc. (The) ................... 1,235,970
28,000 Investment Technology Group, Inc.* 1,200,640
36,000 Jefferies Group, Inc. ............................. 965,520
13,000 Merrill Lynch & Co., Inc. ......................... 1,210,300
33,000 Raymond James Financial, Inc. ..................... 1,000,230
-------------
8,036,350
SEMICONDUCTOR (0.2%)
21,000 FormFactor, Inc.* ................................. 782,250
SHOE (0.8%)
9,000 Deckers Outdoor Corp.* ............................ 539,550
15,200 Genesco, Inc.* .................................... 566,960
10,000 NIKE, Inc. Class B ................................ 990,300
26,000 Steven Madden Ltd. ................................ 912,340
35,000 Wolverine World Wide, Inc. ........................ 998,200
-------------
4,007,350
STEEL -- GENERAL (0.9%)
11,000 Carpenter Technology Corp. ........................ 1,127,720
28,000 Commercial Metals Co. ............................. 722,400
11,500 IPSCO, Inc. ....................................... 1,079,505
22,000 Nucor Corp. ....................................... 1,202,520
-------------
4,132,145
TELECOMMUNICATION
SERVICES (2.2%)
35,750 American Tower Corp. Class A* ..................... 1,332,760
9,000 BT Group PLC ADR .................................. 539,010
33,000 Crown Castle International Corp.* ................. 1,065,900
16,000 Equinix, Inc.* .................................... 1,209,920
8,000 Millicom International Cellular
S.A.* ........................................... 493,120
39,000 NII Holdings, Inc. Class B* ....................... 2,513,160
25,500 OAO Vimpel-Communications
ADR* ............................................ 2,013,225
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14
Value Line Premier Growth Fund, Inc.
December 31, 2006
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
116,000 Qwest Communications
International, Inc.* ............................ $ 970,920
22,000 Time Warner Telecom, Inc.
Class A* ........................................ 438,460
-------------
10,576,475
TELECOMMUNICATIONS
EQUIPMENT (0.5%)
22,700 Anixter International, Inc.* ...................... 1,232,610
34,000 CommScope, Inc.* .................................. 1,036,320
-------------
2,268,930
THRIFT (0.6%)
11,000 FirstFed Financial Corp.* ......................... 736,670
89,768 Hudson City Bancorp, Inc. ......................... 1,245,980
22,500 People's Bank ..................................... 1,003,950
-------------
2,986,600
TIRE & RUBBER (0.2%)
12,200 Carlisle Companies, Inc. .......................... 957,700
TOBACCO (0.2%)
15,600 British American Tobacco PLC
ADR ............................................. 883,896
TOILETRIES & COSMETICS (0.2%)
34,800 Luxottica Group S.p.A. ADR ........................ 1,067,316
TRUCKING (0.9%)
5,000 Forward Air Corp. ................................. 144,650
29,000 Hunt (J.B.) Transport Services, Inc. .............. 602,330
44,700 Knight Transportation, Inc. ....................... 762,135
76,000 Landstar System, Inc. ............................. 2,901,680
-------------
4,410,795
UTILITY -- FOREIGN (0.0%)
2,000 Scottish Power PLC ADR ............................ 116,860
WATER UTILITY (0.2%)
40,000 Aqua America, Inc. ................................ 911,200
WIRELESS NETWORKING (0.4%)
12,700 Itron, Inc.* ...................................... 658,367
43,000 SBA Communications Corp.
Class A* ........................................ 1,182,500
-------------
1,840,867
TOTAL COMMON STOCKS
AND TOTAL INVESTMENT
SECURITIES (93.0%)
(Cost $294,442,072) ............................. $ 455,657,923
=============
Principal
Amount Value
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (6.6%)
$16,400,000 With Morgan Stanley & Co.,
4.60%, dated 12/29/06, due
1/2/07, delivery value
$16,408,382 (collateralized by
$16,655,000 U.S. Treasury
Notes 2.25%, due 2/15/07,
with a value of $16,738,841) .................... $ 16,400,000
16,000,000 With UBS Securities, LLC,
4.50%, dated 12/29/06, due
1/2/07, delivery value
$16,008,000 (collateralized by
$11,544,000 U.S. Treasury
Notes 8.75%, due 8/15/20,
with a value of $16,331,074) .................... 16,000,000
-------------
TOTAL REPURCHASE
AGREEMENTS
(Cost $32,400,000) .............................. 32,400,000
-------------
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES (0.4%) 1,728,068
-------------
NET ASSETS (100%) $ 489,785,991
-------------
NET ASSET VALUE OFFERING AND
REDEMPTION PRICE, PER
OUTSTANDING SHARE
($489,785,991 \ 18,408,419 shares
outstanding) $ 26.61
-------------
* Non-income producing.
ADR American Depositary Receipt
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
15
Value Line Premier Growth Fund, Inc.
Statement of Assets and Liabilities
at December 31, 2006
- --------------------------------------------------------------------------------
Assets:
Investment securities, at value
(Cost - $294,442,072) ................................... $ 455,657,923
Repurchase agreements (Cost - $32,400,000) ................. 32,400,000
Cash ....................................................... 135,331
Receivable for securities sold ............................. 1,659,624
Receivable for capital shares sold ......................... 915,849
Interest and dividends receivable .......................... 335,997
-------------
Total Assets .......................................... 491,104,724
-------------
Liabilities:
Payable for securities purchased ........................... 311,756
Payable for capital shares repurchased ..................... 431,543
Accrued expenses:
Advisory fee ............................................ 313,853
Service and distribution plan fees payable .............. 104,618
Directors' fees and expenses ............................ 9,662
Other ................................................... 147,301
-------------
Total Liabilities ..................................... 1,318,733
-------------
Net Assets ................................................. $ 489,785,991
=============
Net assets consist of:
Capital stock, at $1.00 par value
(authorized 100,000,000, outstanding
18,408,419 shares) ...................................... $ 18,408,419
Additional paid-in capital ................................. 302,120,205
Undistributed net investment income ........................ 1,537
Accumulated net realized gain on
investments ............................................. 8,040,272
Net unrealized appreciation of investments
and foreign currency translations ....................... 161,215,558
-------------
Net Assets ................................................. $ 489,785,991
=============
Net Asset Value, Offering and
Redemption Price Per Outstanding
Share ($489,785,991 \ 18,408,419
shares outstanding) ..................................... $ 26.61
=============
Statement of Operations
for the Year Ended December 31, 2006
- --------------------------------------------------------------------------------
Investment Income:
Dividends (Net of foreign withholding tax
of $81,077) ............................................. $ 4,053,770
Interest ................................................... 1,261,647
-------------
Total Income .......................................... 5,315,417
-------------
Expenses:
Advisory fee ............................................... 3,542,261
Service and distribution plan fees ......................... 1,180,754
Printing and postage ....................................... 165,450
Transfer agent ............................................. 154,500
Auditing and legal fees .................................... 146,199
Proxy Fee Expense .......................................... 110,000
Custodian fees ............................................. 101,681
Insurance .................................................. 65,704
Registration and filing fees ............................... 55,875
Directors' fees and expenses ............................... 46,225
Telephone .................................................. 9,725
Other ...................................................... 14,396
-------------
Total Expenses Before Custody Credits ................... 5,592,770
Less: Custody Credits ................................... (7,405)
-------------
Net Expenses ............................................ 5,585,365
-------------
Net Investment Loss ........................................ (269,948)
-------------
Net Realized and Unrealized Gain/(Loss)
on Investments and Foreign Exchange
Transactions:
Net Realized Gain ....................................... 30,116,141
Change in Net Unrealized Appreciation/
(Depreciation) ........................................ 17,238,314
-------------
Net Realized Gain and Change in Net
Unrealized Appreciation/(Depreciation)
on Investments and Foreign Exchange
Transactions ............................................ 47,354,455
-------------
Net Increase in Net Assets from
Operations ............................................ $ 47,084,507
=============
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16
Value Line Premier Growth Fund, Inc.
Statement of Changes in Net Assets
for the Years Ended December 31, 2006 and December 31, 2005
- --------------------------------------------------------------------------------
Year Ended Year Ended
December 31, 2006 December 31, 2005*
----------------- ------------------
Operations:
Net investment loss ................................................. $ (269,948) $ (225,386)
Net realized gain on investments .................................... 30,116,141 24,671,770
Change in net unrealized appreciation ............................... 17,238,314 20,178,559
------------- -------------
Net increase in net assets from operations .......................... 47,084,507 44,624,943
------------- -------------
Distributions to Shareholders:
Net realized gain on investment transactions ........................ (30,048,237) (23,222,282)
------------- -------------
Capital Share Transactions:
Proceeds from sale of shares ........................................ 102,143,231 89,522,091
Proceeds from reinvestment of distributions to shareholders ......... 28,814,224 21,844,324
Cost of shares repurchased .......................................... (99,322,215) (75,684,311)
------------- -------------
Net increase from capital share transactions ........................ 31,635,240 35,682,104
------------- -------------
Total Increase in Net Assets .......................................... 48,671,510 57,084,765
Net Assets:
Beginning of year ................................................... 441,114,481 384,029,716
------------- -------------
End of year ......................................................... $ 489,785,991 $ 441,114,481
============= =============
Undistributed net investment income, at end of year ................... $ 1,537 $ 1,863
============= =============
* Numbers were previously presented rounded to thousands.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
17
Value Line Premier Growth Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Value Line Premier Growth Fund, Inc. (the "Fund") (formerly known as The Value
Line Special Situations Fund, Inc.) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company whose primary investment objective is long-term growth of capital. The
Fund invests primarily in a diversified portfolio of U.S. equity securities with
favorable growth potential.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
(A) Security Valuation. Securities listed on a securities exchange are valued at
the closing sales prices on the date as of which the net asset value is being
determined. Securities traded on the NASDAQ Stock Market are valued at the
NASDAQ Official Closing Price. In the absence of closing sales prices for such
securities and for securities traded in the over-the-counter market, the
security is valued at the midpoint between the latest available and
representative asked and bid prices. Short-term instruments with maturities of
60 days or less at the date of purchase are valued at amortized cost which
approximates market value. Short-term instruments with maturities greater than
60 days at the date of purchase are valued at the midpoint between the latest
available and representative asked and bid prices, and commencing 60 days prior
to maturity such securities are valued at amortized cost. Securities for which
market quotations are not readily available or that are not readily marketable
and all other assets of the Fund are valued at fair value as the Board of
Directors may determine in good faith.
In addition, the Fund may use the fair value of a security when the closing
market price on the primary exchange where the security is traded no longer
accurately reflects the value of a security due to factors affecting one or more
relevant securities markets or the specific issuer.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
(SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in accordance with generally accepted accounting principles
and expands disclosure about fair value measurements. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007. Management is currently
evaluating the impact the adoption of SFAS No. 157 will have on the Fund's
financial statement disclosures.
(B) Repurchase Agreements. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, it is the Fund's policy to mark-to-market
the collateral on a daily basis to ensure the adequacy of the collateral. In the
event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) Federal Income Taxes. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
In July 2006, the Financial Accounting Standards Board issued Interpretation No.
48, "Accounting for Uncertainty in Income Taxes -- an Interpretation of FASB
Statement No. 109" (the "Interpretation"). The Interpretation establishes for
all entities, including pass-through entities such as the Fund, a minimum
threshold for financial statement recognition of the benefit of positions taken
in filing tax returns (including whether an entity is taxable in a parrticular
jurisdiction), and requires certain expanded tax disclosures. The Interpretation
is effective for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the date of effectiveness. Management has
recently begun to evaluate the application of the Interpretation to the Fund,
and is not in a position at this time to estimate the significance of its
impact, if any, on the Fund's financial statements.
- --------------------------------------------------------------------------------
18
Value Line Premier Growth Fund, Inc.
December 31, 2006
- --------------------------------------------------------------------------------
(D) Security Transactions and Distributions. Security transactions are accounted
for on the date the securities are purchased or sold. Interest income is accrued
as earned. Realized gains and losses on sales of securities are calculated for
financial accounting and federal income tax purposes on the identified cost
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
Dividends received in excess of income are recorded as a reduction of cost of
investments and/or realized gain on Real Estate Investment Trusts (REITs).
(E) Foreign Currency Translation. The books and records of the Fund are
maintained in U.S. dollars. Assets and liabilities which are denominated in
foreign currencies are translated to U.S. dollars at the prevailing rates of
exchange. The Fund does not isolate changes in the value of investments caused
by foreign exchange rate differences from the changes due to other
circumstances.
Income and expenses are translated to U.S dollars based upon the rates of
exchange on the respective dates of such transactions.
Net realized foreign exchange gains or losses arise from currency fluctuations
realized between the trade and settlement dates on securities transactions, the
differences between the U.S. dollar amounts of dividends, interest, and foreign
withholding taxes recorded by the Fund, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities, other than
investments, at the end of the fiscal period, resulting from changes in the
exchange rates. The effect of the change in foreign exchange rates on the value
of investments is included in realized gain/loss on investments and change in
net unrealized appreciation/depreciation on investments.
(F) Representations and Indemnifications. In the normal course of business, the
Fund enters into contracts that contain a variety of representations and
warranties which provide general indemnifications. The Fund's maximum exposure
under these arrangements is unknown, as this would involve future claims that
may be made against the Fund that have not yet occurred. However, based on
experience, the Fund expects the risk of loss to be remote.
2. Capital Share Transactions and Distributions to Shareholders
Transactions in capital stock were as follows:
Year Ended Year Ended
December 31, 2006 December 31, 2005
----------------- -----------------
Shares sold .......................... 3,766,825 3,562,820
Shares issued to
shareholders in
reinvestment of
distributions ..................... 1,079,194 852,200
------------ ------------
4,846,019 4,415,020
Shares repurchased ................... (3,665,496) (3,034,292)
------------ ------------
Net increase ......................... 1,180,523 1,380,728
============ ============
Distributions per
share from net
realized gains .................... $ 1.7309 $ 1.4165
============ ============
3. Purchases and Sales of Securities
Purchases and sales of investment securities, excluding short-term securities,
were as follows:
Year Ended
December 31, 2006
-----------------
Purchases:
Investment Securities ................................. $ 169,293,111
=============
Sales
Investment Securities ................................. $ 177,812,703
=============
- --------------------------------------------------------------------------------
19
Value Line Premier Growth Fund, Inc.
Notes to Financial Statements December 31, 2006
- --------------------------------------------------------------------------------
4. Income Taxes
At December 31, 2006, information on the tax components of capital is as
follows:
Cost of investments for tax purposes ..................... $ 326,858,001
=============
Gross tax unrealized appreciation ........................ $ 162,808,625
Gross tax unrealized depreciation ........................ (1,608,703)
-------------
Net tax unrealized appreciation on
investments ........................................... $ 161,199,922
=============
Undistributed long-term gain ............................. $ 8,060,522
-------------
Net unrealized gain (loss) differs for financial statements and tax purposes
primarily due to wash sales.
The tax composition of distributions to shareholders for the years ended
December 31, 2006 and December 31, 2005 were all from net long-term capital
gains.
Permanent book-tax differences relating to the current year were reclassified
within the composition of the net asset accounts. The Fund increased
undistributed net investment income by approximately $269,622, decreased
accumulated net realized gain by approximately $89,571, and decreased additional
paid-in-capital by $180,051. Net assets were not affected by this
reclassification. These reclasses are primarily due to differing treatments of
net operating losses for tax purposes.
5. Investment Advisory Fee, Service and Distribution Fees, and Transactions
With Affiliates
An advisory fee of $3,542,261 was paid or payable to Value Line, Inc., the
Fund's investment adviser (the "Adviser"), for the year ended December 31, 2006.
This was computed at the rate of 3/4 of 1% of the average daily net assets
during the year and paid monthly. The Adviser provides research, investment
programs, supervision of the investment portfolio and pays costs of
administrative services, office space, equipment and compensation of
administrative, bookkeeping and clerical personnel necessary for managing the
affairs of the Fund. The Adviser also provides persons, satisfactory to the
Fund's Board of Directors, to act as officers and employees of the Fund and pays
their salaries and wages. Direct expenses of the Fund are charged to the Fund
while common expenses of the Value Line Funds are allocated proportionately
based upon the Funds' respective net assets. The Fund bears all other costs and
expenses.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, for the payment of certain
expenses incurred by Value Line Securities, Inc. (the "Distributor"), a
wholly-owned subsidiary of the Adviser, in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders at an
annual rate of 0.25% of the Fund's average daily net assets. For the year ended
December 31, 2006, fees amounting to $1,180,754 were paid or payable to the
Distributor under this Plan.
For the year ended December 31, 2006, the Fund's expenses were reduced by $7,405
under a custody credit agreement with the custodian.
Certain officers and directors of the Adviser and the Distributor are also
officers and directors of the Fund.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan owned 51,367 shares of the Fund's capital stock, representing
less than 1% of the outstanding shares at December 31, 2006. In addition, the
officers and directors of the Fund as a group owned 1,139 shares of the Fund,
representing less than 1% of the outstanding shares.
- --------------------------------------------------------------------------------
20
Value Line Premier Growth Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each year:
Years Ended December 31,
-----------------------------------------------------------------------
2006 2005 2004 2003 2002
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of year ................... $ 25.60 $ 24.23 $ 20.84 $ 16.08 $ 18.95
----------- ----------- ----------- ----------- -----------
Income (loss) from Investment Operations:
Net investment loss ................................. (0.01) (0.01) (0.06) (0.04) (0.05)
Net gains or losses on securities (both
realized and unrealized) ........................... 2.75 2.80 3.89 4.80 (2.82)
----------- ----------- ----------- ----------- -----------
Total income from investment operations ............. 2.74 2.79 3.83 4.76 (2.87)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net realized gains ............... (1.73) (1.42) (0.44) -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ......................... $ 26.61 $ 25.60 $ 24.23 $ 20.84 $ 16.08
=========== =========== =========== =========== ===========
Total return ......................................... 10.68% 11.49% 18.42% 29.60% (15.15)%
=========== =========== =========== =========== ===========
Ratios/Supplemental Data:
Net assets, end of year (in thousands) ............... $ 489,786 $ 441,114 $ 384,030 $ 309,825 $ 242,394
Ratio of expenses to average net assets(1) ........... 1.18% 1.13% 1.15% 1.18% 1.20%
Ratio of net investment loss to average
net assets .......................................... (0.06)% (0.06)% (0.31)% (0.21)% (0.31)%
Portfolio turnover rate .............................. 38% 44% 54% 52% 66%
(1) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been unchanged for the years ended December 31, 2006, 2005, 2004, 2003 and
2002.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
21
Value Line Premier Growth Fund, Inc.
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders
of Value Line Premier Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Value Line Premier Growth Fund,
Inc. (the "Fund") at December 31, 2006, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2006 by correspondence with the
custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP New York, New York
February 26, 2007
- --------------------------------------------------------------------------------
22
Value Line Premier Growth Fund, Inc.
Federal Tax Status of Distributions (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
During the calendar year 2006, the Fund distributed $30,048,237 of long-term
capital gain to its shareholders.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
23
Value Line Premier Growth Fund, Inc.
- --------------------------------------------------------------------------------
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at
http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. Information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities, and information regarding
how the Fund voted these proxies during the most recent 12-month period ended
June 30 is available through the Fund's website at http://www.vlfunds.com and
on the SEC's website at http://www.sec.gov. The description of the policies and
procedures is also available without charge, upon request, by calling
1-800-243-2729.
- --------------------------------------------------------------------------------
24
Value Line Premier Growth Fund, Inc.
- --------------------------------------------------------------------------------
[This page is intentionally left blank.]
- --------------------------------------------------------------------------------
25
Value Line Premier Growth Fund, Inc.
Management of the Fund
- --------------------------------------------------------------------------------
MANAGEMENT INFORMATION
The business and affairs of the Fund are managed by the Fund's officers under
the direction of the Board of Directors. The following table sets forth
information on each Director and Officer of the Fund. Each Director serves as a
director or trustee of each of the 14 Value Line Funds. Each Director serves
until his or her successor is elected and qualified.
Other
Length of Principal Occupation Directorships
Name, Address, and Age Position Time Served During the Past 5 Years Held by Director
- ------------------------------------------------------------------------------------------------------------------------
Interested Director*
Jean Bernhard Buttner Chairman of the Since 1983 Chairman, President and Chief Value Line, Inc.
Age 72 Board of Directors Executive Officer of Value Line,
and President Inc. (the "Adviser") and Value
Line Publishing, Inc. Chairman
and President of each of the 14
Value Line Funds and Value Line
Securities, Inc. (the
"Distributor").
- ------------------------------------------------------------------------------------------------------------------------
Non-Interested Directors
John W. Chandler Director Since 1991 Consultant, Academic Search None
18 Victoria Lane Consultation Service, Inc.,
Lanesboro, MA 01237 (1994-2004); Trustee Emeritus
Age 83 and Chairman (1993-1994) of the
Board of Trustees of Duke
University; President Emeritus,
Williams College.
- ------------------------------------------------------------------------------------------------------------------------
Frances T. Newton Director Since 2000 Customer Support Analyst, Duke None
4921 Buckingham Drive Power Company.
Charlotte, NC 28209
Age 65
- ------------------------------------------------------------------------------------------------------------------------
Francis C. Oakley Director Since 2000 Professor of History, Berkshire Life
54 Scott Hill Road Williams College, (1961 to 2002); Insurance
Williamstown, MA 01267 Professor Emeritus since 2002. Company
Age 75 President Emeritus since 1994 of America
and President, (1985-1994);
Chairman (1993-1997) and
Interim President (2002-2003) of
the American Council of Learned
Societies. Trustee since 1997 and
Chairman of the Board since
2005, National Humanities Center.
- ------------------------------------------------------------------------------------------------------------------------
David H. Porter Director Since 1997 Visiting Professor of Classics, None
5 Birch Run Drive Williams College, since 1999;
Saratoga Springs, NY 12866 President Emeritus, Skidmore
Age 71 College since 1999 and President,
(1987-1998).
- --------------------------------------------------------------------------------
26
Value Line Premier Growth Fund, Inc.
Management of the Fund
- --------------------------------------------------------------------------------
Other
Length of Principal Occupation Directorships
Name, Address, and Age Position Time Served During the Past 5 Years Held by Director
- ------------------------------------------------------------------------------------------------------------------------
Paul Craig Roberts Director Since 1983 Chairman, Institute for A. Schulman Inc.
169 Pompano St. Political Economy. (plastics)
Panama City Beach, FL 32413
Age 68
- ------------------------------------------------------------------------------------------------------------------------
Nancy-Beth Sheerr Director Since 1996 Senior Financial Adviser, None
1409 Beaumont Drive Veritable L.P. (investment adviser)
Gladwyne, PA 19035 since 2004; Senior Financial
Age 58 Advisor, Hawthorn, (2001-2004).
- ------------------------------------------------------------------------------------------------------------------------
Officers
David T. Henigson Vice President, Since 1994 Director, Vice President and
Age 49 Secretary and Chief Compliance Officer of the
Compliance Officer Adviser. Director and Vice
President of the Distributor. Vice
President, Secretary, and Chief
Compliance Officer of each of the
14 Value Line Funds.
- ------------------------------------------------------------------------------------------------------------------------
Stephen R. Anastasio Treasurer Since 2005 Controller of the Adviser until
Age 47 2003; Chief Financial Officer of
the Adviser, (2003-2005);
Treasurer of the Adviser since
2005. Treasurer of each of the 14
Value Line Funds.
- ------------------------------------------------------------------------------------------------------------------------
Howard A. Brecher Assistant Secretary/ Since 2005 Director, Vice President and
Age 53 Assistant Treasurer Secretary of the Adviser. Director
and Vice President of the
Distributor.
- ------------------------------------------------------------------------------------------------------------------------
* Mrs. Buttner is an "interested person" as defined in the Investment
Company Act of 1940 by virtue of her positions with the Adviser and her
indirect ownership of a controlling interest in the Adviser.
Unless otherwise indicated, the address f or each of the above is 220 East 42nd
Street, New York, NY 10017.
- --------------------------------------------------------------------------------
The Fund's Statement of Additional Information (SAI) includes additional
information about the Fund's directors and is available, without charge, upon
request by calling 1-800-243-2729.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
27
Value Line Premier Growth Fund, Inc.
The Value Line Family of Funds
- --------------------------------------------------------------------------------
1950 -- The Value Line Fund seeks long-term growth of capital. Current income
is a secondary objective.
1952 -- Value Line Income and Growth Fund's primary investment objective is
income, as high and dependable as is consistent with reasonable risk. Capital
growth to increase total return is a secondary objective.
1956 -- Value Line Premier Growth Fund seeks long-term growth of capital. No
consideration is given to current income in the choice of investments.
1972 -- Value Line Larger Companies Fund's sole investment objective is to
realize capital growth.
1979 -- The Value Line Cash Fund, a money market fund, seeks to secure as high
a level of current income as is consistent with maintaining liquidity and
preserving capital. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other 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.
1981 -- Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. Under normal conditions, at least 80% of the value of
its net assets will be invested in securities issued or guaranteed by the U.S.
Government and its agencies and instrumentalities.
1983 -- Value Line Centurion Fund* seeks long-term growth of capital.
1984 -- The Value Line Tax Exempt Fund seeks to provide investors with the
maximum income exempt from federal income taxes while avoiding undue risk to
principal. The Fund may be subject to state and local taxes and the Alternative
Minimum Tax (if applicable).
1985 -- Value Line Convertible Fund seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986 -- Value Line Aggressive Income Trust seeks to maximize current income.
1987 -- Value Line New York Tax Exempt Trust seeks to provide New York
taxpayers with the maximum income exempt from New York State, New York City and
federal income taxes while avoiding undue risk to principal. The Trust may be
subject to state and local taxes and the Alternative Minimum Tax (if
applicable).
1987 -- Value Line Strategic Asset Management Trust* seeks to achieve a high
total investment return consistent with reasonable risk.
1993 -- Value Line Emerging Opportunities Fund invests primarily in common
stocks or securities convertible into common stock, with its primary objective
being long-term growth of capital.
1993 -- Value Line Asset Allocation Fund seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the asset mix.
* Only available through the purchase of Guardian Investor, a tax deferred
variable annuity, or ValuePlus, a variable life insurance policy.
For more complete information about any of the Value Line Funds, including
charges and expenses, send for a prospectus from Value Line Securities, Inc.,
220 East 42nd Street, New York, New York 10017-5891 or call 1-800-243-2729,
9am-5pm CST, Monday-Friday, or visit us at www.valueline.com. Read the
prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
28
INVESTMENT ADVISER Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o BFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
REGISTERED PUBLIC 300 Madison Avenue
ACCOUNTING FIRM New York, NY 10017
LEGAL COUNSEL Peter D. Lowenstein, Esq.
496 Valley Road
Cos Cob, CT 06807
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
David T. Henigson
Vice President/Secretary/
Chief Compliance Officer
Stephen R. Anastasio
Treasurer
Howard A. Brecher
Assistant Secretary/
Assistant Treasurer
This report is issued for information of shareholders. It is not authorized for
distribution to prospective investors unless preceded or accompanied by a
currently effective prospectus of the Trust (obtainable from the Distributor).
#537651
Item 2. Code of Ethics
(a) The Registrant has adopted a Code of Ethics that applies to its
principal executive officer, and principal financial officer and principal
accounting officer.
(f) Pursuant to item 12(a), the Registrant is attaching as an exhibit a
copy of its Code of Ethics that applies to its principal executive officer, and
principal financial officer and principal accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1)The Registrant has an Audit Committee Financial Expert serving on
its Audit Committee.
(2) The Registrant's Board has designated John W. Chandler, a member of
the Registrant's Audit Committee, as the Registrant's Audit Committee Financial
Expert. Mr. Chandler is an independent director who is a senior consultant with
Academic Search Consultation Service. He spent most of his professional career
at Williams College, where he served as a faculty member, Dean of the Faculty,
and President (1973-85). He also served as President of Hamilton College
(1968-73), and as President of the Association of American Colleges and
Universities (1985-90). He has also previously served as Trustee Emeritus and
Chairman of the Board of Trustees of Duke University.
A person who is designated as an "audit committee financial expert" shall not
make such person an "expert" for any purpose, including without limitation under
Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as
a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees 2006 - $56,452
(b) Audit-Related fees - None.
(c) Tax Preparation Fees 2006 -$10,514
(d) All Other Fees -None
(e) (1) Audit Committee Pre-Approval Policy. All services to be
performed for the Registrant by PricewaterhouseCoopers LLP
must be pre-approved by the audit committee. All services
performed were pre-approved by the committee.
(e) (2) Not applicable.
(f) Not applicable.
(g) Aggregate Non-Audit Fees 2006 -$10,514
(h) Not applicable.
Item 11. 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 a date within 90 days of the filing date of this
report, are appropriately 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 12. Exhibits.
(a) Code of Business Conduct and Ethics for Principal Executive and
Senior Financial Officers attached hereto as Exhibit 100.COE
(b) (1) Certification pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2) attached hereto as
Exhibit 99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 attached hereto as Exhibit 99.906.CERT.
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/ Jean B. Buttner
--------------------------
Jean B. Buttner, President
Date: March 12, 2007
--------------
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/ Jean B. Buttner
-------------------------------------------------------
Jean B. Buttner, President, Principal Executive Officer
By: /s/ Stephen R. Anastasio
------------------------------------------------------------
Stephen R. Anastasio, Treasurer, Principal Financial Officer
Date: March 12, 2007
--------------