JUNE 30, 2017 ANNUAL REPORT. BlackRock Basic Value Fund, Inc. Not FDIC Insured May Lose Value No Bank Guarantee

Transcription

1 JUNE 30, 2017 ANNUAL REPORT BlackRock Basic Value Fund, Inc. Not FDIC Insured May Lose Value No Bank Guarantee

2 The Markets in Review Dear Shareholder, In the 12 months ended June 30, 2017, risk assets, such as stocks and high-yield bonds, delivered strong performance. These markets showed great resilience during a period with big surprises, including the aftermath of the U.K. s vote to leave the European Union and the outcome of the U.S. presidential election, which brought only brief spikes in equity market volatility. However, interest rates rose, which worked against high-quality assets with more interest rate sensitivity. Aside from the shortest-term Treasury bills, most U.S. Treasuries posted negative returns, as rising energy prices, modest wage increases and steady job growth led to expectations of higher inflation and anticipation of interest rate increases by the U.S. Federal Reserve (the Fed ). The global reflationary theme rising nominal growth, wages and inflation was the dominant driver of asset returns during the period, outweighing significant political upheavals and economic uncertainty. Reflationary expectations accelerated after the U.S. election in November 2016 and continued into the beginning of 2017, stoked by expectations that the new administration s policies would provide an extra boost to U.S. growth. The Fed has responded to these positive developments by increasing interest rates three times in the last six months, setting expectations for additional interest rate increases and moving toward normalizing monetary policy. For its part, the European Central Bank also began to signal its intent to wind down asset purchases and begin the long move toward policy normalization, contingent upon further improvement in economic growth. In recent months, growing skepticism about the near-term likelihood of significant U.S. tax reform and infrastructure spending has tempered enthusiasm around the reflation trade. Similarly, renewed concern about oversupply has weighed on energy prices. Nonetheless, financial markets and to an extent the Fed have adopted a wait-and-see approach to the economic data and potential fiscal stimulus. Although uncertainty has persisted, benign credit conditions, modest inflation and the outlook for economic growth have kept markets relatively tranquil. In the fifth edition of our Global Investor Pulse Survey, we heard from 28,000 individuals across 18 countries, including more than 4,000 respondents from the United States. While retirement remains the single most important issue for American investors, only a third of respondents feel confident that they will have enough retirement income, and nearly 40% of respondents have yet to begin saving for retirement. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today s markets. Sincerely, Rob Kapito President, BlackRock Advisors, LLC Total Returns as of June 30, 2017 U.S. large cap equities (S&P 500 Index) U.S. small cap equities (Russell 2000 Index) International equities (MSCI Europe, Australasia, Far East Index) Emerging market equities (MSCI Emerging Markets Index) 3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index) U.S. Treasury securities (BofA Merrill Lynch 10- Year U.S. Treasury Index) U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index) 6-month 12-month 9.34% 17.90% (5.58) 2.27 (0.31) Tax-exempt municipal bonds (S&P Municipal Bond Index) 3.26 (0.28) Rob Kapito President, BlackRock Advisors, LLC U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index) Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. 2 THIS PAGE NOT PART OF YOUR FUND REPORT

3 Table of Contents Page The Markets in Review... 2 Annual Report: Fund Summary... 4 About Fund Performance... 6 Disclosure of Expenses... 6 Financial Statements: Schedule of Investments... 7 Statement of Assets and Liabilities Statement of Operations Statements of Changes in Net Assets Financial Highlights Notes to Financial Statements Report of Independent Registered Public Accounting Firm Important Tax Information Disclosure of Investment Advisory Agreement Officers and Directors Additional Information BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

4 Fund Summary as of June 30, 2017 Investment Objective BlackRock Basic Value Fund, Inc. s (the Fund ) investment objective is to seek capital appreciation and, secondarily, income by investing in securities, primarily equity securities, that management of the Fund believes are undervalued and therefore represent basic investment value. Portfolio Management Commentary How did the Fund perform? For the 12-month period ended June 30, 2017, the Fund underperformed its benchmark, the Russell 1000 Value Index. What factors influenced performance? Stock selection within the energy sector was the most significant detractor from performance over the period. Falling oil prices weighed on the Fund s overweight positions in oil producers Gulfport Energy Corp., Apache Corp., and Devon Energy Corp. While exposure to these names was maintained based on company-specific value opportunities, the Fund has trimmed the positions to reduce and diversify the portfolio s energy risk exposure. An underweight allocation to and stock selection within the industrials sector detracted over the period, most notably a position in marketing research firm Nielsen Holdings PLC. Stock selection in consumer staples, specifically an overweight position in grocery store operator Kroger Co., detracted. The stock came under pressure after the company lowered 2017 earnings guidance and in the wake of the announced acquisition of Whole Foods by Amazon. The Fund maintained the position on the view that Kroger Co. is a quality franchise and well-positioned relative to its peers to withstand the secular pressures impacting the food retailing industry. The largest contributor to relative performance over the period was an overweight allocation to and stock selection within the financials sector. Most notably, overweight positions in banks Citigroup, Inc. and JPMorgan Chase & Co. generated positive performance on the prospects for reduced industry regulation and higher interest rates. An underweight allocation to the real estate sector contributed positively over the period. The Fund maintained its underweight exposure to the sector due to concerns related to valuation and waning growth prospects. An overweight allocation to information technology ( IT ) and an underweight allocation to consumer staples also produced positive results over the 12-month period. Describe recent portfolio activity. During the period, the Fund s allocation to the consumer staples and materials sectors increased modestly, while the weightings in energy and industrials declined. Describe portfolio positioning at period end. Relative to the Russell 1000 Value Index, the Fund ended the period with the largest sector overweights in IT, health care, financials, telecommunication services and utilities, while the most significant underweights were in industrials, real estate, consumer staples and energy. The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. Portfolio Information Percent of Ten Largest Holdings Net Assets Cisco Systems, Inc.... 5% Citigroup, Inc JPMorgan Chase & Co Pfizer, Inc BlackRock Liquidity Funds, T-Fund, Institutional Class... 4 QUALCOMM, Inc Baxter International, Inc Zimmer Biomet Holdings, Inc Exelon Corp Bank of America Corp Percent of Sector Allocation Net Assets Financials... 27% Health Care Information Technology Energy... 9 Consumer Staples... 7 Consumer Discretionary... 7 Utilities Telecommunication Services... 4 Industrials Materials... 3 Short-Term Securities... 4 Liabilities in Excess of Other Assets.... (1) For Fund compliance purposes, the Fund s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease. 4 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

5 Total Return Based on a $10,000 Investment $20,000 15,000 Institutional Shares 1,2 Investor A Shares 1,2 Russell 1000 Value Index 3 $17,187 $16,504 $15,193 10,000 5,000 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 6/16 6/17 1 Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees, if any. Institutional Shares do not have a sales charge. 2 The Fund invests primarily in equity securities that Fund management believes are undervalued, which means that their prices are less than Fund management believes they are worth. 3 An unmanaged index that is a subset of the Russell 1000 Index that consists of those Russell 1000 securities with lower price-to-book ratios and lower expected growth values. Performance Summary for the Period Ended June 30, 2017 Average Annual Total Returns 4 1 Year 5 Years 10 Years 6-Month Total Returns w/o sales charge w/ sales charge w/o sales charge w/ sales charge w/o sales charge w/ sales charge Institutional... (0.67)% 11.87% N/A 12.80% N/A 5.14% N/A InvestorA... (0.84) % % % InvestorB... (1.41) InvestorC... (1.21) ClassK... (0.67) N/A N/A 5.24 N/A ClassR... (0.97) N/A N/A 4.47 N/A Russell 1000 Value Index N/A N/A 5.57 N/A 4 Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See About Fund Performance on page 6 for a detailed description of share classes, including any related sales charges and fees. N/A Not applicable as share class and index do not have a sales charge. Past performance is not indicative of future results. Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles. Expense Example Beginning Account Value January 1, 2017 Actual Hypothetical 6 Ending Account Value June 30, 2017 Expenses Paid During the Period 5 Beginning Account Value January 1, 2017 Ending Account Value June 30, 2017 Expenses Paid During the Period 5 Annualized Expense Ratio Institutional... $1, $ $2.55 $1, $1, $ % Investor A $1, $ $3.91 $1, $1, $ % InvestorB... $1, $ $9.86 $1, $1, $ % Investor C $1, $ $7.78 $1, $1, $ % ClassK... $1, $ $2.03 $1, $1, $ % Class R $1, $ $5.54 $1, $1, $ % 5 For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/ 365 (to reflect the one-half year period shown). 6 Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. See Disclosure of Expenses on page 6 for further information on how expenses were calculated. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

6 About Fund Performance Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Prior to February 4, 2015, Class K Shares performance results are those of Institutional Shares restated to reflect Class K Share fees. Investor A Shares are subject to a maximum initial sales charge (frontend load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge ( CDSC ) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries. Investor B Shares are subject to a maximum CDSC of 4.50%, declining to 0% after six years. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares automatically convert to Investor A Shares after approximately eight years. (There is no initial sales charge for automatic share conversions.) All returns for periods greater than eight years reflect this conversion. These shares are only available through exchanges and distribution reinvestments by current holders and for purchase by certain employersponsored retirement plans. Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. Class R Shares are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employersponsored retirement plans. Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance table on the previous page assume reinvestment of all distributions, if any, at net asset value on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. Disclosure of Expenses Shareholders of the Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on January 1, 2017 and held through June 30, 2017) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds. The expense example provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their share class under the heading entitled Expenses Paid During the Period. The expense example also 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. In order to assist shareholders in comparing the ongoing expenses of investing in this Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds. The expenses shown in the expense example are intended to highlight shareholders ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher. 6 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

7 Schedule of Investments June 30, 2017 (Percentages shown are based on Net Assets) Common Stocks Shares Value Aerospace & Defense 0.1% Northrop Grumman Corp. 10,630 $ 2,728,827 Raytheon Co. 11,824 1,909,340 4,638,167 Airlines 0.2% Delta Air Lines, Inc. 144,360 7,757,906 Auto Components 0.8% Lear Corp. 195,095 27,719,098 Banks 13.7% Bank of America Corp. 3,708,820 89,975,973 Citigroup, Inc. 2,533, ,413,795 JPMorgan Chase & Co. 1,669, ,609,118 KeyCorp 1,390,380 26,055,721 Regions Financial Corp. 2,241,694 32,818, ,873,007 Beverages 0.3% PepsiCo, Inc. 88,710 10,245,118 Biotechnology 2.5% Gilead Sciences, Inc. 1,241,340 87,862,045 Capital Markets 2.3% Morgan Stanley 632,720 28,194,003 Nasdaq, Inc. 718,707 51,380,363 79,574,366 Chemicals 0.6% Akzo Nobel NV - ADR 731,700 21,226,617 Communications Equipment 5.1% Cisco Systems, Inc. 5,571, ,390,454 Consumer Finance 5.2% Capital One Financial Corp. 897,638 74,162,852 Discover Financial Services 1,208,305 75,144,488 SLM Corp. (a) 2,503,132 28,786, ,093,358 Containers & Packaging 1.5% Avery Dennison Corp. 88,050 7,780,979 Bemis Co., Inc. 228,080 10,548,700 Crown Holdings, Inc. (a)(b) 211,670 12,628,232 Graphic Packaging Holding Co. 583,940 8,046,693 Owens-Illinois, Inc. (a) 485,800 11,620,336 50,624,940 Diversified Telecommunication Services 1.9% Verizon Communications, Inc. 1,482,940 66,228,100 Electric Utilities 3.6% American Electric Power Co., Inc. 157,750 10,958,893 Duke Energy Corp. 101,460 8,481,041 Exelon Corp. 2,895, ,450, ,890,358 Common Stocks Shares Value Equity Real Estate Investment Trusts (REITs) 0.2% Brixmor Property Group, Inc. 374,880 $ 6,702,854 Food & Staples Retailing 4.2% CVS Health Corp. 145,290 11,690,033 Kroger Co. 2,606,050 60,773,086 Walgreens Boots Alliance, Inc. 915,370 71,682, ,145,744 Food Products 1.8% General Mills, Inc. 473,990 26,259,046 Hormel Foods Corp. 178,650 6,093,752 JM Smucker Co. 160,790 19,026,281 Mondelez International, Inc., Class A 285,780 12,342,838 63,721,917 Health Care Equipment & Supplies 7.7% Baxter International, Inc. 1,785, ,084,786 Hologic, Inc. (a) 334,278 15,169,536 Medtronic PLC 377,576 33,509,870 Zimmer Biomet Holdings, Inc. 829, ,502, ,267,113 Household Durables 1.0% Newell Brands, Inc. 650,712 34,891,177 Independent Power and Renewable Electricity Producers 2.9% AES Corp. 7,882,840 87,578,352 Dynegy, Inc. (a)(b) 1,393,100 11,520,937 99,099,289 Industrial Conglomerates 0.3% Honeywell International, Inc. 75,315 10,038,736 Insurance 5.4% American International Group, Inc. 447,550 27,980,826 Hartford Financial Services Group, Inc. 828,903 43,575,431 Lincoln National Corp. 481,771 32,558,084 Prudential Financial, Inc. 462,323 49,995,609 XL Group Ltd. 699,873 30,654, ,764,387 Internet Software & Services 0.9% ebay, Inc. (a) 855,030 29,857,648 IT Services 0.2% First Data Corp., Class A (a) 400,700 7,292,740 Media 4.1% Comcast Corp., Class A 1,354,330 52,710,524 Interpublic Group of Cos., Inc. 1,642,340 40,401,564 Omnicom Group, Inc. 157,570 13,062,553 Scripps Networks Interactive, Inc., Class A 499,469 34,118, ,293,368 Metals & Mining 0.5% Reliance Steel & Aluminum Co. 226,880 16,519,133 Portfolio Abbreviation ADR American Depositary Receipts See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

8 Schedule of Investments (continued) Common Stocks Shares Value Multiline Retail 0.8% Dollar General Corp. 396,520 $ 28,585,127 Multi-Utilities 0.1% Public Service Enterprise Group, Inc. 98,620 4,241,646 Oil, Gas & Consumable Fuels 9.5% Apache Corp. 729,826 34,980,560 ConocoPhillips 1,527,990 67,170,440 Devon Energy Corp. 2,181,880 69,754,704 Gulfport Energy Corp. (a) 2,413,270 35,595,733 Marathon Oil Corp. 2,787,563 33,032,622 Marathon Petroleum Corp. 595,532 31,164,190 Occidental Petroleum Corp. 114,510 6,855,714 Suncor Energy, Inc. 586,760 17,133,392 Valero Energy Corp. 440,060 29,686, ,373,803 Personal Products 0.2% Unilever NV - NY Shares 141,720 7,832,864 Pharmaceuticals 6.3% Novartis AG - ADR 825,130 68,873,601 Pfizer, Inc. 4,385, ,315, ,188,760 Professional Services 2.1% Nielsen Holdings PLC 1,835,060 70,943,420 Road & Rail 0.7% Norfolk Southern Corp. 198,030 24,100,251 Semiconductors & Semiconductor Equipment 3.9% NXP Semiconductors NV (a) 102,730 11,243,798 QUALCOMM, Inc. 2,224, ,833, ,077,375 Software 1.1% Oracle Corp. 768,170 38,516,044 Technology Hardware, Storage & Peripherals 2.1% Apple Inc. 499,070 71,876,061 Common Stocks Shares Value Thrifts & Mortgage Finance 0.2% New York Community Bancorp, Inc. 569,890 $ 7,482,656 Tobacco 0.5% Philip Morris International, Inc. 137,880 16,194,006 Wireless Telecommunication Services 1.7% Telephone & Data Systems, Inc. 1,933,614 53,657,788 United States Cellular Corp. (a)(b) 142,391 5,456,423 59,114,211 Total Common Stocks 96.2% 3,308,243,864 Preferred Stocks Food Products 0.5% Tyson Foods, Inc., 4.75% (c) 225,238 15,266,632 Total Long-Term Investments (Cost $2,499,056,492) 96.7% 3,323,510,496 Short-Term Securities BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.84% (d)(e) 125,806, ,806,939 SL Liquidity Series, LLC, Money Market Series, 1.27% (d)(e)(f) 15,098,149 15,099,658 Total Short-Term Securities, (Cost $140,907,219) 4.1% 140,906,597 Total Investments (Cost $2,639,963,711) 100.8% 3,464,417,093 Liabilities in Excess of Other Assets (0.8)% (25,940,434) Net Assets 100.0% $3,438,476,659 Notes to Schedule of Investments (a) Non-income producing security. (b) Security, or a portion of the security, is on loan. (c) Convertible security. (d) During the year ended June 30, 2017, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: Shares Held at June 30, 2016 Net Activity Shares Held at June 30, 2017 Value at June 30, 2017 Income Net Realized Gain 1 Change in Unrealized Appreciation (Depreciation) Affiliate BlackRock Liquidity Funds, TempFund, InstitutionalClass... 47,502,455 (47,502,455) $ 18,177 BlackRock Liquidity Funds, T-Fund, InstitutionalClass ,806, ,806,939 $125,806, ,448 $ 275 SL Liquidity Series, LLC, Money Market Series. 1,643,124 13,455,025 15,098,149 15,099,658 25, ,386 $(622) Total $140,906,597 $185,747 $4,661 $(622) 1 Includes net capital gain distributions. 2 Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. (e) Current yield as of period end. (f) Security was purchased with the cash collateral from loaned securities. For Fund compliance purposes, the Fund s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease. See Notes to Financial Statements. 8 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

9 Schedule of Investments (concluded) Fair Value Hierarchy as of Period End Various inputs are used in determining the fair value of investments. For information about the Fund s policy regarding valuation of investments, refer to the Notes to Financial Statements. The following table summarizes the Fund s investments categorized in the disclosure hierarchy: Level 1 Level 2 Level 3 Total Assets: Investments: Long-Term Investments 1...$ 3,323,510,496 $ 3,323,510,496 Short-TermSecurities ,806, ,806,939 Subtotal $ 3,449,317,435 $ 3,449,317,435 Investments Valued at NAV 2 15,099,658 Total Investments $ 3,464,417,093 1 See above Schedule of Investments for values in each industry. 2 As of June 30, 2017, certain of the Fund s investments were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy. During the year ended June 30, 2017, there were no transfers between levels. See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

10 Statement of Assets and Liabilities June 30, 2017 Assets Investments at value unaffiliated (including securities loaned at value of $14,763,101)(cost $2,499,056,492) $ 3,323,510,496 Investments at value affiliated (cost $140,907,219) ,906,597 Receivables: Investmentssold... 5,248,723 Securities lending income affiliated... 2,305 Capital shares sold ,407,720 Dividends affiliated ,205 Dividends unaffiliated ,837,046 Prepaidexpenses... 64,825 Total assets... 3,477,045,917 Liabilities Cash collateral on securities loaned at value ,095,894 Payables: Investmentspurchased... 3,323,617 Capital shares redeemed ,347,408 Investmentadvisoryfees... 1,157,801 Officer sanddirectors fees... 31,409 Other accrued expenses ,650 Other affiliates ,445 Serviceanddistributionfees ,034 Total liabilities ,569,258 Net Assets... $ 3,438,476,659 Net Assets Consist of Paid-incapital... $ 2,566,581,983 Undistributednetinvestmentincome... 23,161,429 Undistributednetrealizedgain... 24,279,865 Net unrealized appreciation (depreciation) ,453,382 Net Assets... $ 3,438,476,659 NetAssetValue Institutional Based on net assets of $1,689,348,580 and 67,099,506 shares outstanding, 400 million shares authorized, $0.10 par value $ Investor A Based on net assets of $1,509,457,937 and 60,675,730 shares outstanding, 200 million shares authorized, $0.10 par value $ Investor B Based on net assets of $223,312 and 8,863 shares outstanding, 400 million shares authorized, $0.10 par value $ Investor C Based on net assets of $163,671,116 and 7,451,005 shares outstanding, 200 million shares authorized, $0.10 par value... $ Class K Based on net assets of $60,153,117 and 2,387,738 shares outstanding, 200 million shares authorized, $0.10 par value $ Class R Based on net assets of $15,622,597 and 665,396 shares outstanding, 400 million shares authorized, $0.10 par value... $ See Notes to Financial Statements. 10 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

11 Statement of Operations Year Ended June 30, 2017 Investment Income Dividends affiliated... $ 160,625 Dividends unaffiliated ,379,689 Foreigntaxeswithheld... (461,942) Securities lending affiliated net ,122 Total investment income ,103,494 Expenses Investmentadvisory... 15,156,115 Service and distribution class specific... 7,140,339 Transfer agent class specific.... 4,555,093 Accounting services ,847 Registration ,282 Printing ,678 Professional... 97,603 OfficerandDirectors... 70,328 Custodian... 60,167 Miscellaneous... 84,624 Total expenses ,970,076 Less: Fees waived by the Manager... (26,699) Transfer agent fees reimbursed class specific..... (93) Total expenses after fees waived and/or reimbursed... 27,943,284 Netinvestmentincome... 51,160,210 Realized and Unrealized Gain Net realized gain from: Investments unaffiliated ,718,657 Investments affiliated ,386 Capital gain distributions from investment companies affiliated ,723,318 Net change in unrealized appreciation (depreciation) on: Investments unaffiliated ,262,846 Investments affiliated..... (622) 268,262,224 Netrealizedandunrealizedgain ,985,542 Net Increase in Net Assets Resulting from Operations... $ 412,145,752 See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

12 Statements of Changes in Net Assets Year Ended June 30, Decrease in Net Assets: Operations Netinvestmentincome... $ 51,160,210 $ 60,985,505 Netrealizedgain... 92,723, ,976,504 Net change in unrealized appreciation (depreciation) ,262,224 (367,813,250) Net increase (decrease) in net assets resulting from operations ,145,752 (186,851,241) Distributions to Shareholders 1 From net investment income: Institutional (32,267,339) (29,861,395) InvestorA... (23,146,016) (22,366,748) InvestorC... (3,299,857) (2,831,439) ClassK... (1,061,217) (866,650) ClassR... (225,881) (181,062) From net realized gain: Institutional (26,396,679) (197,494,848) InvestorA... (22,464,809) (178,963,028) InvestorB... (22,561) (399,486) InvestorC... (5,798,872) (47,925,640) ClassK... (820,709) (5,377,198) ClassR... (264,011) (1,826,745) Decrease in net assets resulting from distributions to shareholders... (115,767,951) (488,094,239) Capital Share Transactions Net increase (decrease) in net assets derived from capital share transactions (547,115,707) 146,349,758 Net Assets Total decrease in net assets (250,737,906) (528,595,722) Beginningofyear... 3,689,214,565 4,217,810,287 Endofyear... $ 3,438,476,659 $ 3,689,214,565 Undistributednetinvestmentincome,endofyear... $ 23,161,429 $ 31,696,349 1 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. See Notes to Financial Statements. 12 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

13 Financial Highlights Institutional Year Ended June 30, Per Share Operating Performance Net asset value, beginning of year $ $ $ $ $ Net investment income Net realized and unrealized gain (loss) (1.79) Net increase (decrease) from investment operations (1.35) Distributions: 2 From net investment income From net realized gain (0.45) (0.37) (0.43) (2.86) (0.50) (5.98) (0.49) (3.79) (0.56) (1.74) Total distributions (0.82) (3.29) (6.48) (4.28) (2.30) Net asset value, end of year $ $ $ $ $ Total Return3 Based on net asset value % (3.94)% 5.48% 25.22% 28.67% Ratios to Average Net Assets Total expenses % 0.55% 0.55% 4,5 0.54% 4,5 0.55% 4,5 Total expenses after fees waived and/or reimbursed % 0.55% 0.55% 4,5 0.54% 4,5 0.55% 4,5 Net investment income % 1.84% 1.62% 4,5 1.51% 4,5 1.89% 4,5 Supplemental Data Net assets, end of year (000) $ 1,689,349 $ 1,738,222 $ 1,964,894 $ 2,136,401 $ 2,069,166 Portfolio turnover rate % 42% 41% 6 47% 7 53% 7 1 Based on average shares outstanding. 2 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 3 Where applicable, assumes the reinvestment of distributions. 4 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 5 Includes the Fund s share of the Master LLC s allocated fees waived of less than 0.01%. 6 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover rate of the Master LLC. See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

14 Financial Highlights (continued) Investor A Year Ended June 30, Per Share Operating Performance Net asset value, beginning of year $ $ $ $ $ Net investment income Net realized and unrealized gain (loss) (1.77) Net increase (decrease) from investment operations (1.40) Distributions: 2 From net investment income From net realized gain (0.38) (0.37) (0.36) (2.86) (0.42) (5.98) (0.41) (3.79) (0.49) (1.74) Total distributions (0.75) (3.22) (6.40) (4.20) (2.23) Net asset value, end of year $ $ $ $ $ Total Return3 Based on net asset value % (4.22)% 5.23% 24.86% 28.35% Ratios to Average Net Assets Total expenses % 0.83% 0.81% 4,5 0.81% 4,5 0.83% 4,5 Total expenses after fees waived and/or reimbursed % 0.83% 0.81% 4,5 0.81% 4,5 0.83% 4,5 Net investment income % 1.56% 1.36% 4,5 1.24% 4,5 1.61% 4,5 Supplemental Data Net assets, end of year (000) $ 1,509,458 $ 1,503,837 $ 1,760,169 $ 1,808,120 $ 1,594,656 Portfolio turnover rate % 42% 41% 6 47% 7 53% 7 1 Based on average shares outstanding. 2 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 3 Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. 4 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 5 Includes the Fund s share of the Master LLC s allocated fees waived of less than 0.01%. 6 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover rate of the Master LLC. See Notes to Financial Statements. 14 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

15 Financial Highlights (continued) Investor B Year Ended June 30, Per Share Operating Performance Net asset value, beginning of year $ $ $ $ $ Net investment income Net realized and unrealized gain (loss) (1.73) Net increase (decrease) from investment operations (1.61) Distributions: 2 From net investment income From net realized gain (0.34) (2.73) (5.96) (3.70) (0.09) (1.74) Total distributions (0.34) (2.73) (5.96) (3.70) (1.83) Net asset value, end of year $ $ $ $ $ Total Return3 Based on net asset value % (5.20)% 4.20% 23.57% 26.94% Ratios to Average Net Assets Total expenses % 1.90% 1.82% 4,5 1.89% 4,5 1.92% 4,5 Total expenses after fees waived and/or reimbursed % 1.90% 1.82% 4,5 1.89% 4,5 1.92% 4,5 Net investment income % 0.50% 0.35% 4,5 0.18% 4,5 0.54% 4,5 Supplemental Data Net assets, end of year (000) $ 223 $ 2,437 $ 5,294 $ 14,930 $ 24,282 Portfolio turnover rate % 42% 41% 6 47% 7 53% 7 1 Based on average shares outstanding. 2 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 3 Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. 4 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 5 Includes the Fund s share of the Master LLC s allocated fees waived of less than 0.01%. 6 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover rate of the Master LLC. See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

16 Financial Highlights (continued) Investor C Year Ended June 30, Per Share Operating Performance Net asset value, beginning of year $ $ $ $ $ Net investment income Net realized and unrealized gain (loss) (1.60) Net increase (decrease) from investment operations (1.44) Distributions: 2 From net investment income From net realized gain (0.21) (0.37) (0.17) (2.86) (0.19) (5.98) (0.19) (3.79) (0.27) (1.74) Total distributions (0.58) (3.03) (6.17) (3.98) (2.01) Net asset value, end of year $ $ $ $ $ Total Return3 Based on net asset value % (4.96)% 4.38% 23.90% 27.29% Ratios to Average Net Assets Total expenses % 1.62% 1.60% 4,5 1.60% 4,5 1.63% 4,5 Total expenses after fees waived and/or reimbursed % 1.62% 1.60% 4,5 1.60% 4,5 1.63% 4,5 Net investment income % 0.76% 0.57% 4,5 0.45% 4,5 0.81% 4,5 Supplemental Data Net assets, end of year (000) $ 163,671 $ 355,558 $ 430,809 $ 459,708 $ 387,027 Portfolio turnover rate % 42% 41% 6 47% 7 53% 7 1 Based on average shares outstanding. 2 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 3 Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. 4 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 5 Includes the Fund s share of the Master LLC s allocated fees waived of less than 0.01%. 6 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover rate of the Master LLC. See Notes to Financial Statements. 16 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

17 Financial Highlights (continued) Per Share Operating Performance Class K Year Ended June 30, Period February 4, to June 30, 2015 Net asset value, beginning of period $ $ $ Net investment income 2... Net realized and unrealized gain (loss) (1.78) Net increase (decrease) from investment operations (1.32) 1.44 Distributions: 3 From net investment income From net realized gain (0.48) (0.37) (0.46) (2.86) Total distributions (0.85) (3.32) Net asset value, end of period $ $ $ Total Return4 Based on net asset value % (3.86)% 5.44% 5 Ratios to Average Net Assets Total expenses % 0.44% 0.46% 6,7 Total expenses after fees waived and/or reimbursed % 0.44% 0.45% 6,7 Net investment income % 1.95% 1.75% 6,7 Supplemental Data Net assets, end of period (000) $ 60,153 $ 72,584 $ 40,787 Portfolio turnover rate % 42% 41% 8,9 1 Commencement of operations. 2 Based on average shares outstanding. 3 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 4 Where applicable, assumes the reinvestment of distributions. 5 Aggregate total return. 6 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 7 Annualized. 8 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover is representative of the Fund for the entire year. See Notes to Financial Statements. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

18 Financial Highlights (concluded) Class R Year Ended June 30, Per Share Operating Performance Net asset value, beginning of year $ $ $ $ $ Net investment income Net realized and unrealized gain (loss) (1.70) Net increase (decrease) from investment operations (1.42) Distributions: 2 From net investment income From net realized gain (0.32) (0.37) (0.28) (2.86) (0.31) (5.98) (0.31) (3.79) (0.36) (1.74) Total distributions (0.69) (3.14) (6.29) (4.10) (2.10) Net asset value, end of year $ $ $ $ $ Total Return3 Based on net asset value % (4.53)% 4.86% 24.47% 27.92% Ratios to Average Net Assets Total expenses % 1.15% 1.16% 4,5 1.12% 4,5 1.18% 4,5 Total expenses after fees waived and/or reimbursed % 1.15% 1.16% 4,5 1.12% 4,5 1.16% 4,5 Net investment income % 1.24% 1.00% 4,5 0.93% 4,5 1.29% 4,5 Supplemental Data Net assets, end of year (000) $ 15,623 $ 16,577 $ 15,857 $ 18,769 $ 16,655 Portfolio turnover rate % 42% 41% 6 47% 7 53% 7 1 Based on average shares outstanding. 2 Distributions for annual periods determined in accordance with U.S. federal income tax regulations. 3 Where applicable, assumes the reinvestment of distributions. 4 Includes the Fund s share of the allocated net expenses and/or net investment income of Master Basic Value LLC (the Master LLC ), an affiliate of the Fund. 5 Includes the Fund s share of the Master LLC s allocated fees waived of less than 0.01%. 6 Prior to February 9, 2015, the Fund invested all of its assets in the Master LLC. Portfolio turnover rate includes transactions from the Master LLC prior to February 9, Portfolio turnover rate of the Master LLC. See Notes to Financial Statements. 18 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017

19 Notes to Financial Statements 1. Organization: BlackRock Basic Value Fund, Inc. (the Fund ) is registered under the Investment Company Act of 1940, as amended (the 1940 Act ), as a diversified, open-end management investment company. The Fund is organized as a Maryland corporation. The Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Class K Shares are sold only to certain eligible investors. Class R Shares are available only to certain employer-sponsored retirement plans. Investor A and Investor C Shares are generally available through financial intermediaries. Investor B Shares are only available through exchanges and dividend and capital gain reinvestments by existing shareholders, and for purchase by certain employer-sponsored retirement plans. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor B shareholders may vote on material changes to the Investor A distribution and service plan). Share Class Initial Sales Charge CDSC Conversion Privilege Institutional, Class K and Class R Shares No No None Investor A Shares Yes No 1 None Investor B Shares No Yes To Investor A Shares after approximately 8 years Investor C Shares... No Yes None 1 Investor A Shares may be subject to a contingent deferred sales charge ( CDSC ) for certain redemptions where no initial sales charge was paid at the time of purchase. The Fund, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the Manager ) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Bond Complex. 2. Significant Accounting Policies: The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ( U.S. GAAP ), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies: Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates ). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets. Distributions: Distributions paid by the Fund are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP. Recent Accounting Standards: In April 2015, the Financial Accounting Standards Board issued Disclosures for Investments in Certain Entities that Calculate Net Asset Value ( NAV ) per Share which eliminates the requirement to categorize investments within the fair value hierarchy when fair value is based on the NAV per share and no quoted market value is available. As of June 30, 2017, certain investments of the Fund were valued using NAV per share as no quoted market value was available and therefore have been excluded from the fair value hierarchy. SEC Reporting Modernization: The U.S. Securities and Exchange Commission ( SEC ) adopted new rules and forms and amended other rules to enhance the reporting and disclosure of information by registered investment companies. As part of these changes, the SEC amended Regulation S-X to standardize and enhance disclosures in investment company financial statements. The compliance date for implementing the new or amended rules is August 1, Indemnifications: In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnification. The Fund s maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty. Other: Expenses directly related to the Fund or its classes are charged to the Fund or the applicable class. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods. BLACKROCK BASIC VALUE FUND, INC. JUNE 30,

20 Notes to Financial Statements (continued) The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions. 3. Investment Valuation and Fair Value Measurements: Investment Valuation Policies: The Fund s investments are valued at fair value (also referred to as market value within the financial statements) as of the close of trading on the New York Stock Exchange ( NYSE ) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Fund (the Board ). The BlackRock Global Valuation Methodologies Committee (the Global Valuation Committee ) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments. Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the Fund s assets and liabilities: Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. Investments in open-end U.S. mutual funds are valued at NAV each business day. The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the Money Market Series ) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act. If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value ( Fair Valued Investments ). The fair valuation approaches that may be used by the Global Valuation Committee include Market approach, Income approach and Cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that the Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows: Level 1 - Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access Level 2 - Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs) Level 3 - Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund s own assumptions used in determining the fair value of investments) The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately-held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information. 20 BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2017