fp0001583_nq.htm
 
OMB APPROVAL
OMB Number: 3235-0578
 
Expires: April 30, 2013
 
Estimated average burden hours per response: 5.6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file number        811-05150                         
 
Cornerstone Strategic Value Fund, Inc.
(Exact name of registrant as specified in charter)
 
260 Madison Avenue, 8th Floor                           New York, New York
10016 
                   (Address of principal executive offices)
(Zip code)
 
Frank J. Maresca
 
Ultimus Fund Solutions, LLC    260 Madison Avenue, 8th Floor    New York, NY 10016 
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (646) 881-4985    
 
Date of fiscal year end:         December 31, 2010      
 
Date of reporting period:        March 31, 2010        
 
Form N-Q is to be used by management investment companies other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to Rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
 
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
 
 
 
 
 
Item 1.
Schedule of Investments.
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2010 (UNAUDITED)
  
   
Description
  
No. of Shares
    
Value
  
EQUITY SECURITIES - 99.39%
  
CLOSED-END FUNDS - 7.67%
  
CORE - 7.67%
        
Adams Express Company (The) (a)
     26,400     $ 278,520  
Advent/Claymore Enhanced Growth & Income Fund
     22,661       264,680  
BlackRock Dividend Achievers Trust
     4,000       36,880  
Liberty All-Star Equity Fund
     302,030       1,434,643  
Liberty All-Star Growth Fund
     261,101       976,518  
Tri-Continental Corporation
     22,800       279,756  
Zweig Fund, Inc. (The)
     315,650       1,117,401  
              4,388,398  
                 
TOTAL CLOSED-END FUNDS
       4,388,398  
                 
CONSUMER DISCRETIONARY - 9.55%
  
Amazon.com, Inc. *
     3,000       407,190  
Best Buy Company, Inc.
     6,500       276,510  
Comcast Corporation - Class A
     14,555       273,925  
DIRECTV Group, Inc. (The) - Class A *
     4,000       135,240  
Family Dollar Stores, Inc.
     2,000       73,220  
Gap, Inc. (The)
     9,200       212,612  
Home Depot, Inc. (The)
     2,000       64,700  
Lowe's Companies, Inc.
     5,900       143,016  
McDonald's Corporation
     11,400       760,608  
News Corporation - Class A
     10,000       144,100  
NIKE, Inc. - Class B
     4,100       301,350  
Omnicom Group, Inc.
     4,200       163,002  
Staples, Inc.
     12,800       299,392  
Starbucks Corporation
     2,800       67,956  
Target Corporation
     12,800       673,280  
Time Warner Cable, Inc.
     1,966       104,807  
Time Warner, Inc.
     2,900       90,683  
TJX Companies, Inc. (The)
     7,000       297,640  
Viacom, Inc. - Class B *
     5,450       187,371  
Walt Disney Company (The)
     12,700       443,357  
Yum! Brands, Inc.
     9,000       344,970  
              5,464,929  
CONSUMER STAPLES - 10.54%
  
Altria Group, Inc.
     31,800       652,536  
Archer-Daniels-Midland Company
     3,960       114,444  
 
See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2010 (UNAUDITED) (Continued)
  
   
CONSUMER STAPLES (Continued)
  
Coca-Cola Company (The)
     13,500     $ 742,500  
Colgate-Palmolive Company
     3,400       289,884  
ConAgra Foods, Inc.
     3,400       85,238  
Costco Wholesale Corporation
     2,500       149,275  
CVS Caremark Corporation
     8,430       308,201  
General Mills, Inc.
     2,500       176,975  
H.J. Heinz Company
     4,000       182,440  
Kimberly-Clark Corporation
     4,500       282,960  
Kraft Foods, Inc. - Class A
     10,932       330,584  
PepsiCo, Inc.
     5,600       370,496  
Philip Morris International, Inc.
     2,500       130,400  
Procter & Gamble Company (The)
     16,297       1,031,111  
Sysco Corporation
     10,300       303,850  
Walgreen Company
     4,800       178,032  
Wal-Mart Stores, Inc.
     12,600       700,560  
              6,029,486  
ENERGY - 10.22%
  
Anadarko Petroleum Corporation
     2,700       196,641  
Baker Hughes, Inc.
     6,100       285,724  
Chevron Corporation
     10,732       813,807  
Conocophillips
     14,974       766,220  
Exxon Mobil Corporation
     29,000       1,942,420  
Halliburton Company
     9,700       292,261  
Marathon Oil Corporation
     11,500       363,860  
Occidental Petroleum Corporation
     3,500       295,890  
Schlumberger Ltd.
     6,000       380,760  
Transocean Ltd. *
     2,500       215,950  
XTO Energy, Inc.
     6,250       294,875  
              5,848,408  
FINANCIALS - 13.61%
  
AFLAC, Inc.
     5,500       298,595  
Allstate Corporation (The)
     6,800       219,708  
American Express Company
     6,400       264,064  
Bank of America Corporation
     16,138       288,063  
Bank of New York Mellon Corporation (The) ^
     7,754       239,444  
BB&T Corporation ^
     3,500       113,365  
Capital One Financial Corporation
     2,500       103,525  
Charles Schwab Corporation (The)
     17,000       317,730  
Chubb Corporation (The)
     3,500       181,475  
Goldman Sachs Group, Inc. (The)
     5,000       853,150  
Hudson City Bancorp, Inc.
     15,500       219,480  
 
See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2010 (UNAUDITED) (Continued)
  
   
FINANCIALS (Continued)
  
JPMorgan Chase & Company
     35,132     $ 1,572,157  
Marsh & McLennan Companies, Inc.
     10,000       244,200  
MetLife, Inc.
     5,700       247,038  
Morgan Stanley
     11,500       336,835  
PNC Financial Services Group, Inc.
     7,600       453,720  
T. Rowe Price Group, Inc.
     3,000       164,790  
Travelers Companies, Inc. (The)
     9,476       511,135  
U.S. Bancorp ^
     9,901       256,238  
Wells Fargo & Company
     28,900       899,368  
              7,784,080  
HEALTH CARE - 11.66%
  
Abbott Laboratories
     9,200       484,656  
Aetna, Inc.
     5,000       175,550  
Amgen, Inc. *
     6,700       400,392  
Baxter International, Inc.
     5,000       291,000  
Becton, Dickinson and Company
     3,900       307,047  
Biogen Idec, Inc. *
     4,000       229,440  
Bristol-Myers Squibb Company
     19,000       507,300  
Cardinal Health, Inc.
     7,950       286,438  
Covidien PLC
     2,599       130,678  
Eli Lilly & Company
     4,700       170,234  
Gilead Sciences, Inc. *
     6,000       272,880  
Johnson & Johnson
     15,400       1,004,080  
McKesson Corporation
     1,800       118,296  
Medtronic, Inc.
     8,000       360,240  
Merck & Company, Inc.
     15,267       570,223  
Pfizer, Inc.
     38,622       662,367  
Stryker Corporation
     2,000       114,440  
UnitedHealth Group, Inc.
     11,000       359,370  
WellPoint, Inc. *
     3,500       225,330  
              6,669,961  
INDUSTRIALS - 9.53%
  
3M Company
     4,400       367,708  
Boeing Company (The)
     2,200       159,742  
Caterpillar, Inc.
     5,300       333,105  
CSX Corporation
     3,500       178,150  
Deere & Company
     6,500       386,490  
Emerson Electric Company
     6,000       302,040  
General Dynamics Corporation
     3,200       247,040  
General Electric Company
     51,900       944,580  
Honeywell International, Inc.
     5,000       226,350  
 
See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2010 (UNAUDITED) (Continued)
  
   
INDUSTRIALS (Continued)
  
Illinois Tool Works, Inc.
     4,800     $ 227,328  
Lockheed Martin Corporation
     3,000       249,660  
Norfolk Southern Corporation
     5,500       307,395  
Northrop Grumman Corporation
     2,500       163,925  
Raytheon Company
     3,500       199,920  
Union Pacific Corporation
     4,000       293,200  
United Parcel Service, Inc. - Class B
     4,100       264,081  
United Technologies Corporation
     5,000       368,050  
Waste Management, Inc.
     6,800       234,124  
              5,452,888  
INFORMATION TECHNOLOGY - 17.87%
  
Adobe Systems, Inc. *
     4,200       148,554  
Apple, Inc. *
     5,900       1,386,087  
Applied Materials, Inc.
     10,800       145,584  
Automatic Data Processing, Inc.
     4,400       195,668  
Cisco Systems, Inc. *
     45,400       1,181,762  
Corning, Inc.
     6,000       121,260  
Dell, Inc. *
     2,700       40,527  
eBay, Inc. *
     2,500       67,375  
EMC Corporation *
     17,148       309,350  
Google, Inc. - Class A *
     2,000       1,134,020  
Hewlett-Packard Company
     11,400       605,910  
Intel Corporation
     39,500       879,270  
International Business Machines Corporation
     10,100       1,295,325  
Microsoft Corporation
     51,200       1,498,624  
Oracle Corporation
     22,272       572,167  
QUALCOMM, Inc.
     10,000       419,900  
Texas Instruments, Inc.
     6,400       156,608  
Yahoo!, Inc. *
     4,000       66,120  
              10,224,111  
MATERIALS - 3.19%
  
Alcoa, Inc.
     11,400       162,336  
Dow Chemical Company (The)
     5,400       159,678  
E.I. Du Pont de Nemours & Company
     9,500       353,780  
Freeport-McMoRan Copper & Gold, Inc.
     5,000       417,700  
Monsanto Company
     2,660       189,977  
Praxair, Inc.
     6,500       539,500  
              1,822,971  
REAL ESTATE INVESTMENT TRUST - 0.00%
  
Simon Property Group, Inc.
     14       1,175  
 
See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2010 (UNAUDITED) (Continued)
  
   
TELECOMMUNICATION SERVICES - 2.32%
  
AT&T, Inc.
     37,039     $ 957,088  
Verizon Communications, Inc.
     12,000       372,240  
              1,329,328  
UTILITIES - 3.23%
  
American Electric Power Company, Inc.
     5,000       170,900  
Dominion Resources, Inc.
     7,700       316,547  
Duke Energy Corporation
     15,800       257,856  
Edison International
     3,500       119,595  
Exelon Corporation
     3,000       131,430  
FirstEnergy Corporation
     3,000       117,270  
FPL Group, Inc.
     4,000       193,320  
PG&E Corporation
     3,000       127,260  
Public Service Enterprises Group, Inc.
     4,500       132,840  
Southern Company (The)
     8,400       278,544  
              1,845,562  
                 
TOTAL EQUITY SECURITIES (cost - $51,645,529)
       56,861,297  
                 
SHORT-TERM INVESTMENTS - 1.80%
                
MONEY MARKET FUND - 0.72%
                
JPMorgan U.S. Government Money Market Fund
     412,894       412,894  
                 
   
Principal
Amount (000's)
          
REPURCHASE AGREEMENT - 1.08%
                
J.P. Morgan Securities, Inc. †
                
(Agreement dated 3/31/2010 to be repurchased at $616,302, 0.12%, 4/1/2010, collateralized by $639,104 in United States Treasury Notes)
   $ 616       616,302  
                 
TOTAL SHORT-TERM INVESTMENTS (cost - $1,029,196)
       1,029,196  
                 
TOTAL INVESTMENTS - 101.19% (cost - $52,674,725)
       57,890,493  
                 
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.19)%
       (678,241 )
                 
NET ASSETS - 100.00%
     $ 57,212,252  

(a) Affiliated investment.  The Fund holds 0.49% (based on net assets) of Adams Express Company.  A director of the Fund also serves as a director to such company.  There were no purchases or sales of this security during the three months ended March 31, 2010.  The Fund earned $1,320 in income during the three months ended March 31, 2010.
* Non-income producing security. 
^ Security or a portion thereof is out on loan. 
† Represents investment purchased with collateral received for securities on loan.
 
See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE STRATEGIC VALUE FUND, INC.
NOTES TO SCHEDULES OF INVESTMENTS
March 31, 2010 (UNAUDITED)
 
Federal Income Tax Cost: At March 31, 2010 the identified cost for federal income tax purposes, as well as the gross unrealized appreciation from investments for those securities having an excess of value over cost, gross unrealized depreciation from investments for those securities having an excess of cost over value and the net unrealized appreciation from investments were $52,674,725, $9,561,268, $(4,345,500) and $5,215,768 respectively.
 
As required by the Fair Value Measurement and Disclosures Topic of the FASB Accounting Standards Codification, the Fund has performed an analysis of all assets and liabilities measured at fair value to determine the significance and character of all inputs to their fair value determination.
 
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.
 
 
·
Level 1 – quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.
 
 
·
Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
 
 
·
Level 3 – model derived valuations in which one or more significant inputs or significant value drivers are unobservable.  Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The following is a summary of the inputs used as of March 31, 2010 in valuing the Fund’s investments carried at value:
 
Valuation Inputs
  
INVESTMENTS IN SECURITIES
    
OTHER FINANCIAL INSTRUMENTS*
  
             
Level 1 - Quoted Prices
   $ 56,861,297     $ -  
Level 2 - Other Significant Observable Inputs
     1,029,196       -  
Level 3 – Significant Unobservable Inputs
     -       -  
Total
   $ 57,890,493     $ -  
* Other financial instruments include futures, forwards and swap contracts.
 
During the period the Fund did not have any significant transfers in and out of Level 1 or Level 2.
 
The Fund did not have any assets or liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2010.
 
New Accounting Pronouncement: In January 2010, the FASB Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”. ASU 2010-06 amends FASB Accounting Standards Codification Topic, Fair Value Measurements and Disclosures, to require additional disclosures regarding fair value measure­ments. Certain disclosures required by ASU No. 2010-06 are effective for interim and annual reporting periods beginning after December 15, 2009 and have been reflected herein while other required disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Management is currently evaluating the impact ASU No. 2010-06 will have on its financial statement disclosures.
 
 
 
 
 
The Fund is exposed to financial market risks, including the valuations of its investment portfolio.  For the period ended March 31, 2010, the Fund did not engage in derivative instruments and other hedging activities.
 
Securities valuation policies and other investment related disclosures are herby incorporated by reference to the Fund’s annual report previously filed with the Securities and Exchange Commission on the Form N-CSR on March 5, 2010 with a file number 811-05150.
 
Other information regarding the Fund is available in the Fund’s most recent annual report filed with the Securities and Exchange Commission on the Form N-CSR on March 5, 2010, file number 811-05150.  This information is also available to registered shareholders by calling (800) 937-5449.  For general inquiries, please call (513) 326-3597.  This information is also available on the website of the Securities and Exchange Commission – http://www.sec.gov.
 
 
 
 
 
Item 2.
Controls and Procedures.
 
(a)  Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that such information is recorded, processed, summarized, and reported on a timely basis.
 
(b)  There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
Item 3.
Exhibits.
 
File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)):  Attached hereto
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
(Registrant)            Cornerstone Strategic Value Fund, Inc.      
 
 
By (Signature and Title)*
/s/ Ralph W. Bradshaw
  
 
Ralph W. Bradshaw, President and Chairman
  
 
(Principal Executive Officer)
  
     
Date
May 24, 2010
    

 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
By (Signature and Title)*
/s/ Ralph W. Bradshaw
  
 
Ralph W. Bradshaw, President and Chairman
  
 
(Principal Executive Officer)
  
     
Date
May 24, 2010
    

 
By (Signature and Title)*
/s/ Frank J. Maresca
  
 
Frank J. Maresca, Treasurer (Principal Financial Officer)
  
Date
May 24, 2010
    
 
* Print the name and title of each signing officer under his or her signature.