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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.
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(Exact name of registrant as specified in charter)
305 Madison Avenue, Suite 740 New York, New York 10165
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(Address of principal executive offices) (Zip code)
Frank J. Maresca
Ultimus Fund Solutions, LLC 305 Madison Avenue, Suite 740 New York, NY 10165
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(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 652-6155
----------------------------
Date of fiscal year end: December 31, 2009
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Date of reporting period: March 31, 2009
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Form N-Q is to be used by management investment companies other than small
business investment companies registered on Form N-5 (ss.ss. 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. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED)
DESCRIPTION NO. OF SHARES VALUE
--------------------------------------------------------------------------------
EQUITY SECURITIES - 99.54%
CLOSED-END FUNDS - 8.75%
Adams Express Company (The) (a) 49,500 $ 370,755
Advent/Claymore Enhanced Growth & Income Fund 61,070 469,018
BlackRock Dividend Achievers Trust 15,600 98,904
Dreman/Claymore Dividend & Income Fund ^ 69,100 100,195
General American Investors Company, Inc. 3,000 46,050
Liberty All-Star Equity Fund 475,030 1,391,838
Liberty All-Star Growth Fund 266,201 641,544
Tri-Continental Corporation 19,800 166,716
Zweig Fund, Inc. ^ 425,550 1,059,619
------------
4,344,639
------------
CONSUMER DISCRETIONARY - 7.00%
Amazon.com, Inc. * 3,000 220,320
Best Buy Company, Inc. 2,500 94,900
Comcast Corporation - Class A 11,555 157,610
DIRECTV Group, Inc. (The) ^ * 4,000 91,160
Gap, Inc. (The) 9,200 119,508
Home Depot, Inc. (The) 2,000 47,120
Lowe's Companies, Inc. 5,900 107,675
McDonald's Corporation 14,400 785,808
News Corporation - Class A 10,000 66,200
NIKE, Inc. - Class B 6,100 286,029
Omnicom Group, Inc. ^ 6,200 145,080
Staples, Inc. 10,800 195,588
Starbucks Corporation ^ * 2,800 31,108
Target Corporation 6,800 233,852
Time Warner Cable, Inc. ^ 1,966 48,763
TJX Companies, Inc. (The) ^ 3,000 76,920
Toyota Motor Corporation - ADR ^ 2,500 158,250
Viacom, Inc. - Class B * 5,450 94,721
Walt Disney Company (The) ^ 28,200 512,112
------------
3,472,724
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CONSUMER STAPLES - 12.61%
Altria Group, Inc. 13,300 213,066
Archer-Daniels-Midland Company 3,960 110,009
Coca-Cola Company (The) 17,500 769,125
Colgate-Palmolive Company 8,900 524,922
ConAgra Foods, Inc. 3,400 57,358
CVS Caremark Corporation 10,430 286,720
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
CONSUMER STAPLES (CONTINUED)
General Mills, Inc. 2,500 $ 124,700
H.J. Heinz Company ^ 4,000 132,240
Kimberly-Clark Corporation ^ 2,500 115,275
Kraft Foods, Inc. - Class A 10,932 243,674
Kroger Company (The) 8,800 186,736
PepsiCo, Inc. 7,100 365,508
Philip Morris International, Inc. ^ 7,300 259,734
Procter & Gamble Company (The) 26,297 1,238,326
Sysco Corporation ^ 9,800 223,440
Walgreen Company 4,800 124,608
Wal-Mart Stores, Inc. 24,600 1,281,660
------------
6,257,101
------------
ENERGY - 12.07%
Baker Hughes, Inc. ^ 10,600 302,630
Chevron Corporation 17,032 1,145,232
ConocoPhillips 10,474 410,162
Exxon Mobil Corporation 37,000 2,519,700
Halliburton Company 13,200 204,204
Marathon Oil Corporation 11,500 302,335
Occidental Petroleum Corporation 8,000 445,200
Schlumberger Ltd. ^ 8,000 324,960
Transocean Ltd. ^ * 2,500 147,100
XTO Energy, Inc. ^ 6,250 191,375
------------
5,992,898
------------
FINANCIALS - 9.42%
AFLAC, Inc. ^ 3,500 67,760
Allstate Corporation (The) 6,800 130,220
American Express Company 3,400 46,342
Bank of America Corporation 16,138 110,061
Bank of New York Mellon Corporation (The) 5,754 162,550
Capital One Financial Corporation 2,500 30,600
Charles Schwab Corporation (The) ^ 22,000 341,000
Goldman Sachs Group, Inc. (The) ^ 1,800 190,836
Hudson City Bancorp, Inc. 13,000 151,970
JPMorgan Chase & Company 47,632 1,266,059
Marsh & McLennan Companies, Inc. ^ 10,000 202,500
MetLife, Inc. ^ 5,700 129,789
Morgan Stanley 7,000 159,390
PNC Financial Services Group, Inc. * 7,600 222,604
T. Rowe Price Group, Inc. ^ 7,000 202,020
Travelers Companies, Inc. (The) 12,476 507,025
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
FINANCIALS (CONTINUED)
U.S. Bancorp 9,901 $ 144,653
Wells Fargo & Company 42,900 610,896
------------
4,676,275
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HEALTH CARE - 14.67%
Abbott Laboratories ^ 11,200 534,240
Aetna, Inc. 11,000 267,630
Amgen, Inc. ^ * 9,900 490,248
Baxter International, Inc. ^ 5,000 256,100
Becton, Dickinson and Company 5,400 363,096
Biogen Idec, Inc. * 4,000 209,680
Bristol-Myers Squibb Company 23,500 515,120
Cardinal Health, Inc. ^ 7,950 250,266
Covidien Ltd. 2,599 86,391
Eli Lilly & Company 4,700 157,027
Gilead Sciences, Inc. * 7,000 324,240
Johnson & Johnson 22,900 1,204,540
McKesson Corporation 2,800 98,112
Medtronic, Inc. 10,000 294,700
Merck & Company, Inc. ^ 12,500 334,375
Pfizer, Inc. 23,560 320,887
Schering-Plough Corporation ^ 18,500 435,675
Stryker Corporation 3,500 119,140
UnitedHealth Group, Inc. 19,500 408,135
WellPoint, Inc. ^ * 3,500 132,895
Wyeth 11,200 482,048
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7,284,545
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INDUSTRIALS - 8.66%
3M Company 4,400 218,768
Boeing Company (The) ^ 2,200 78,276
Burlington Northern Santa Fe Corporation 5,400 324,810
Caterpillar, Inc. ^ 6,800 190,128
CSX Corporation 6,500 168,025
Deere & Company ^ 8,000 262,960
Emerson Electric Company 8,400 240,072
FedEx Corporation 2,000 88,980
General Dynamics Corporation ^ 3,200 133,088
General Electric Company ^ 56,900 575,259
Honeywell International, Inc. ^ 5,000 139,300
Illinois Tool Works, Inc. 4,800 148,080
Lockheed Martin Corporation 4,000 276,120
Norfolk Southern Corporation 5,500 185,625
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
INDUSTRIALS (CONTINUED)
Northrop Grumman Corporation 2,500 $ 109,100
Raytheon Company 6,000 233,640
Union Pacific Corporation ^ 4,000 164,440
United Parcel Service, Inc. - Class B 4,100 201,802
United Technologies Corporation 7,500 322,350
Waste Management, Inc. ^ 9,300 238,080
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4,298,903
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INFORMATION TECHNOLOGY - 15.82%
Adobe Systems, Inc. * 4,200 89,838
Apple, Inc. * 8,500 893,520
Applied Materials, Inc. ^ 17,800 191,350
Automatic Data Processing, Inc. 4,400 154,704
Cisco Systems, Inc. * 32,900 551,733
Corning, Inc. ^ 16,500 218,955
Dell, Inc. * 4,700 44,556
eBay, Inc. * 2,500 31,400
EMC Corporation ^ * 39,148 446,287
Google, Inc. - Class A * 2,000 696,120
Hewlett-Packard Company 16,900 541,814
Intel Corporation 60,500 910,525
International Business Machines Corporation 10,600 1,027,034
Microsoft Corporation 56,200 1,032,394
Nortel Networks Corporation * 660 149
Oracle Corporation * 26,272 474,735
QUALCOMM, Inc. 10,000 389,100
Texas Instruments, Inc. 6,400 105,664
Yahoo!, Inc. * 4,000 51,240
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7,851,118
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MATERIALS - 2.76%
Alcoa, Inc. ^ 11,400 83,676
Dow Chemical Company (The) ^ 5,400 45,522
E.I. Du Pont de Nemours & Company 9,500 212,135
Freeport-McMoRan Copper & Gold, Inc. ^ 5,000 190,550
Monsanto Company 5,660 470,346
Praxair, Inc. 5,500 370,095
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1,372,324
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REAL ESTATE INVESTMENT TRUST - 0.14%
Simon Property Group, Inc. ^ 2,047 70,908
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TELECOMMUNICATION SERVICES - 3.72%
AT&T, Inc. 43,539 1,097,183
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
TELECOMMUNICATION SERVICES (CONTINUED)
Verizon Communications, Inc. ^ 24,800 $ 748,960
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1,846,143
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UTILITIES - 3.92%
American Electric Power Company, Inc. 5,000 126,300
Dominion Resources, Inc. ^ 11,200 347,088
Duke Energy Corporation 15,800 226,256
Edison International ^ 3,500 100,835
Exelon Corporation 3,000 136,170
FirstEnergy Corporation 5,000 193,000
FPL Group, Inc. ^ 4,000 202,920
PG&E Corporation 5,000 191,100
Public Service Enterprise Group, Inc. 4,500 132,615
Southern Company (The) 9,400 287,828
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1,944,112
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TOTAL EQUITY SECURITIES (cost $61,033,182) $ 49,411,690
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SHORT-TERM INVESTMENTS - 11.54%
MONEY MARKET SECURITY - 1.04%
JPMorgan U.S. Government Money Market Fund 517,628 517,628
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PRINCIPAL
AMOUNT (000'S)
--------------
REPURCHASE AGREEMENTS - 10.50%
J.P. Morgan Securities, Inc.+ ++
(Agreement dated 3/31/2009 to be repurchased
at $176,697, 0.1562%, 4/1/2009, collateralized
by $182,506 in United States Treasury Notes) $ 177 176,696
J.P. Morgan Securities, Inc.+ ++
(Agreement dated 3/31/2009 to be repurchased
at $5,034,902, 0.3125%, 4/1/2009,
collateralized by $5,183,174 in United
States Treasury Notes) 5,035 5,034,858
$ 5,211,554
------------
TOTAL SHORT-TERM INVESTMENTS (cost - $5,729,182) 5,729,182
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
TOTAL INVESTMENTS - 111.08% (cost $66,762,364) 55,140,872
------------
LIABILITIES IN EXCESS OF OTHER ASSETS - (11.08)% (5,500,309)
------------
NET ASSETS - 100.00% $ 49,640,563
============
ADR - American Depositary Receipt
(a) Affiliated investment. The fund holds 0.75% (based on net assets) of Adams
Express Company. A director of the Fund also serves as a director to such
company. During the three months ended March 31, 2009 there were no
purchases or sales of this security.
^ Security or a portion thereof is out on loan.
* Non-income producing security.
+ Stated interest rate, before rebate earned by borrower of securities 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, 2009 (UNAUDITED)
================================================================================
Federal Income Tax Cost: At March 31, 2009 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 depreciation from investments were
$66,762,364, $4,442,472, $(16,063,964) and $(11,621,492), respectively.
The Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective
January 1, 2008. In accordance with FAS 157, fair value is defined as the price
that the Fund would receive upon selling an investment in a timely transaction
to an independent buyer in the principal or most advantageous market of the
investment. FAS 157 established a three-tier hierarchy to maximize the use of
observable market data and minimize the use of unobservable inputs and to
establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in
pricing the asset or liability, including assumptions about risk, for example,
the risk inherent in a particular valuation technique used to measure fair value
including such a pricing model and/or the risk inherent in the inputs to the
valuation technique. Inputs may be observable or unobservable. Observable inputs
are inputs that reflect the assumptions market participants would use in pricing
the asset or liability developed based on market data obtained from sources
independent of the reporting entity. Unobservable inputs are inputs that reflect
the reporting entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best
information available in the circumstances. The three-tier hierarchy of inputs
is summarized in the three broad Levels listed below.
o Level 1 - quoted prices in active markets for identical investments
o Level 2 - other significant observable inputs (including quoted
prices for similar investments, interest rates, prepayment speeds,
credit risks, etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of March 31, 2009 in valuing
the Fund's investments carried at value:
OTHER
INVESTMENTS IN FINANCIAL
Valuation Inputs SECURITIES INSTRUMENTS*
--------------------------------------------- ------------ ------------
Level 1 - Quoted Prices $ 55,140,872 $ --
Level 2 - Other Significant Observable Inputs -- --
Level 3 - Significant Unobservable Inputs -- --
============ ============
Total $ 55,140,872 $ --
============ ============
* Other financial instruments include futures, forwards and swap contracts.
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, 2009.
As of January 1, 2009, the Fund adopted SFAS No. 161, DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard amends and expands
the disclosure requirements of SFAS No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, to illustrate how and why an entity uses
derivative instruments; how derivative instruments and related hedged items are
accounted for under SFAS No. 133; and how derivative instruments and related
hedged items affect an entity's financial position, financial performance and
cash flows. SFAS No. 161 is effective for financial statements issued for fiscal
years beginning after November 15, 2008 and interim periods within those fiscal
years.
The Fund is exposed to financial market risks, including the valuations of its
investment portfolio. For the period ended March 31, 2009, 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 6, 2009 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 6, 2009, 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 - https://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.
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By (Signature and Title)* /s/ Ralph W. Bradshaw
--------------------------------------------------
Ralph W. Bradshaw, President and Chairman
(Principal Executive Officer)
Date May 21, 2009
--------------------------
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 21, 2009
--------------------------
By (Signature and Title)* /s/ Frank J. Maresca
--------------------------------------------------
Frank J. Maresca, Treasurer
(Principal Financial Officer)
Date May 21, 2009
--------------------------
* Print the name and title of each signing officer under his or her signature.