fp0002901_nq.htm
 
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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. 
(Exact name of registrant as specified in charter)
 
 
350 Jericho Turnpike, Suite 206           Jericho, New York
11753
(Address of principal executive offices)
(Zip code)
 
 
Frank J. Maresca
 
Ultimus Fund Solutions, LLC    350 Jericho Turnpike, Suite 206   Jericho, NY 11753 
(Name and address of agent for service)
 
 
Registrant's telephone number, including area code:  (513) 587-3400   
 
Date of fiscal year end:         December 31, 2011            
 
Date of reporting period:       March 31, 2011                  
 
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, 2011 (UNAUDITED)
  
   
Description
  
No. of Shares
    
Value
  
EQUITY SECURITIES - 99.12%
  
CLOSED-END FUNDS - 19.61%
  
CORE - 2.83%
        
Adams Express Company (The) (a)
     48,400     $ 549,824  
General American Investors Company, Inc.
     18,300       518,622  
Liberty All-Star Equity Fund
     43,124       226,832  
Royce Micro-Cap Trust, Inc.
     4,000       40,960  
SunAmerica Focused Alpha Large-Cap Fund, Inc.
     8,000       145,280  
Tri-Continental Corporation
     22,800       333,336  
              1,814,854  
CORPORATE DEBT FUNDS INVESTMENT GRADE-RATED - 2.93%
  
AllianceBernstein Income Fund
     144,924       1,114,466  
Federated Enhanced Treasury Income Fund
     37,244       569,833  
Invesco Van Kampen Bond Fund
     10,453       189,826  
              1,874,125  
GLOBAL - 3.36%
          
Alpine Total Dynamic Dividend Fund
     344,312       2,117,519  
Clough Global Allocation Fund
     2,500       40,600  
              2,158,119  
GLOBAL INCOME - 0.83%
          
Nuveen Multi-Currency Short-Term Government Income Fund
     38,267       533,825  
                 
HIGH CURRENT YIELD (LEVERAGED) - 0.25%
          
First Trust Strategic High Income Fund
     5,000       17,650  
First Trust Strategic High Income Fund II
     16,400       80,688  
First Trust Strategic High Income Fund III
     14,101       60,493  
              158,831  
OPTION ARBITRAGE/OPTIONS STRATEGIES - 7.89%
          
Dow 30 Enhanced Premium & Income Fund, Inc.
     36,334       417,841  
Eaton Vance Risk-Managed Diversified Equity Income Fund
     146,464       1,877,668  
Eaton Vance Tax-Managed Diversified Equity Income Fund
     183,120       2,014,320  
Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund
     11,815       144,734  
Eaton Vance Tax-Managed Global Diversified Equity Income Fund
     58,000       613,640  
              5,068,203  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2011 (UNAUDITED) (Continued)
  
   
CLOSED-END FUNDS (Continued)
  
REAL ESTATE - 0.43%
        
Alpine Global Premier Properties Fund
     39,316     $ 275,605  
                 
SECTOR EQUITY - 0.70%
          
Evergreen Utilities and High Income Fund
     29,510       349,694  
Gabelli Healthcare & WellnessRx Trust (The)*
     4,361       33,536  
Macquarie Global Infrastructure Total Return Fund, Inc.
     4,000       72,880  
              456,110  
VALUE - 0.39%
          
Claymore Dividend & Income Fund
     11,960       199,732  
Royce Focus Trust, Inc.
     6,000       50,100  
              249,832  
                 
TOTAL CLOSED-END FUNDS
       12,589,504  
                 
CONSUMER DISCRETIONARY - 8.82%
  
Amazon.com, Inc. *
     3,000       540,390  
Best Buy Company, Inc.
     6,500       186,680  
Comcast Corporation - Class A
     14,555       359,800  
DIRECTV Group, Inc. (The) - Class A *
     4,000       187,200  
Family Dollar Stores, Inc.
     2,000       102,640  
Ford Motor Company *
     12,000       178,920  
Gap, Inc. (The)
     9,200       208,472  
Home Depot, Inc. (The)
     2,000       74,120  
McDonald's Corporation
     11,400       867,426  
News Corporation - Class A
     10,000       175,600  
NIKE, Inc. - Class B
     4,100       310,370  
Starbucks Corporation
     2,800       103,460  
Target Corporation
     8,800       440,088  
Time Warner Cable, Inc.
     1,966       140,254  
Time Warner, Inc.
     7,900       282,030  
TJX Companies, Inc. (The)
     7,000       348,110  
Viacom, Inc. - Class B
     5,450       253,534  
Walt Disney Company (The)
     10,200       439,518  
Yum! Brands, Inc.
     9,000       462,420  
              5,661,032  
CONSUMER STAPLES - 7.98%
  
Altria Group, Inc.
     20,800       541,424  
Coca-Cola Company (The)
     13,500       895,725  
Colgate-Palmolive Company
     3,400       274,584  
Costco Wholesale Corporation
     2,500       183,300  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2011 (UNAUDITED) (Continued)
  
   
CONSUMER STAPLES (Continued)
  
CVS Caremark Corporation
     8,430     $ 289,318  
General Mills, Inc.
     5,000       182,750  
H.J. Heinz Company
     4,000       195,280  
Kraft Foods, Inc. - Class A
     6,932       217,387  
PepsiCo, Inc.
     5,600       360,696  
Philip Morris International, Inc.
     2,500       164,075  
Procter & Gamble Company (The)
     16,297       1,003,895  
Sysco Corporation
     10,300       285,310  
Wal-Mart Stores, Inc.
     10,100       525,705  
              5,119,449  
ENERGY - 10.73%
  
Chevron Corporation
     10,732       1,152,939  
ConocoPhillips
     14,974       1,195,823  
Exxon Mobil Corporation
     29,936       2,518,516  
Halliburton Company
     9,700       483,448  
Marathon Oil Corporation
     11,500       613,065  
Occidental Petroleum Corporation
     3,500       365,715  
Schlumberger Ltd.
     6,000       559,560  
              6,889,066  
FINANCIALS - 11.93%
  
AFLAC, Inc.
     5,500       290,290  
Allstate Corporation (The)
     6,800       216,104  
American Express Company
     6,400       289,280  
Bank of New York Mellon Corporation (The)
     7,754       231,612  
BB&T Corporation
     3,500       96,075  
Capital One Financial Corporation
     2,500       129,900  
Chubb Corporation (The)
     3,500       214,585  
Citigroup, Inc. *
     60,000       265,200  
Franklin Resources, Inc.
     1,500       187,620  
Goldman Sachs Group, Inc. (The)
     5,000       792,350  
Hudson City Bancorp, Inc.
     15,500       150,040  
JPMorgan Chase & Co.
     30,132       1,389,085  
Loews Corporation
     2,000       86,180  
Marsh & McLennan Companies, Inc.
     10,000       298,100  
MetLife, Inc.
     5,700       254,961  
Morgan Stanley
     7,500       204,900  
PNC Financial Services Group, Inc.
     7,600       478,724  
Prudential Financial, Inc.
     4,000       246,320  
State Street Corporation
     3,000       134,820  
T. Rowe Price Group, Inc.
     3,000       199,260  
Travelers Companies, Inc. (The)
     9,476       563,633  
U.S. Bancorp
     9,901       261,683  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2011 (UNAUDITED) (Continued)
  
   
FINANCIALS (Continued)
  
Wells Fargo & Company
     21,400     $ 678,380  
              7,659,102  
HEALTH CARE - 8.66%
  
Abbott Laboratories
     9,200       451,260  
Aetna, Inc.
     5,000       187,150  
Allergan, Inc.
     2,500       177,550  
Amgen, Inc. *
     6,700       358,115  
Becton, Dickinson and Company
     3,900       310,518  
Biogen Idec, Inc. *
     4,000       293,560  
Bristol-Myers Squibb Company
     19,000       502,170  
Cardinal Health, Inc.
     7,950       326,983  
Covidien Plc
     2,599       134,992  
Eli Lilly & Company
     4,700       165,299  
Express Scripts, Inc. *
     3,000       166,830  
Gilead Sciences, Inc. *
     6,000       254,640  
Johnson & Johnson
     10,000       592,500  
McKesson Corporation
     1,800       142,290  
Medtronic, Inc.
     6,000       236,100  
Merck & Company, Inc.
     15,267       503,964  
Stryker Corporation
     2,000       121,600  
UnitedHealth Group, Inc.
     11,000       497,200  
WellPoint, Inc.
     2,000       139,580  
              5,562,301  
INDUSTRIALS - 8.62%
  
3M Company
     4,400       411,400  
Boeing Company (The)
     2,200       162,646  
Caterpillar, Inc.
     5,300       590,155  
CSX Corporation
     3,500       275,100  
Deere & Company
     6,500       629,785  
Emerson Electric Company
     6,000       350,580  
General Dynamics Corporation
     3,200       244,992  
General Electric Company
     46,900       940,345  
Illinois Tool Works, Inc.
     2,500       134,300  
Lockheed Martin Corporation
     3,000       241,200  
Raytheon Company
     3,500       178,045  
Union Pacific Corporation
     4,000       393,320  
United Parcel Service, Inc. - Class B
     4,100       304,712  
United Technologies Corporation
     5,000       423,250  
Waste Management, Inc.
     6,800       253,912  
              5,533,742  
INFORMATION TECHNOLOGY - 14.63%
  
Apple, Inc. *
     5,900       2,055,855  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2011 (UNAUDITED) (Continued)
  
   
INFORMATION TECHNOLOGY (Continued)
  
Cognizant Technology Solutions Corporation - Class A *
     2,500     $ 203,500  
Corning, Inc.
     12,000       247,560  
EMC Corporation *
     8,148       216,329  
Google, Inc. - Class A *
     2,000       1,172,420  
Hewlett-Packard Company
     11,400       467,058  
Intel Corporation
     39,500       796,715  
International Business Machines Corporation
     8,100       1,320,867  
Microsoft Corporation
     51,200       1,298,432  
Oracle Corporation
     25,272       843,327  
QUALCOMM, Inc.
     10,000       548,300  
Texas Instruments, Inc.
     6,400       221,184  
              9,391,547  
MATERIALS - 3.03%
  
Dow Chemical Company (The)
     5,400       203,850  
E.I. Du Pont de Nemours & Company
     9,500       522,215  
Freeport-McMoRan Copper & Gold, Inc.
     10,000       555,500  
Praxair, Inc.
     6,500       660,400  
              1,941,965  
REAL ESTATE INVESTMENT TRUST - 0.00%
  
Simon Property Group, Inc.
     14       1,500  
                 
TELECOMMUNICATION SERVICES - 2.49%
  
AT&T, Inc.
     37,039       1,133,394  
Verizon Communications, Inc.
     12,000       462,480  
              1,595,874  
UTILITIES - 2.62%
  
Dominion Resources, Inc.
     7,700       344,190  
Duke Energy Corporation
     15,800       286,770  
Exelon Corporation
     3,000       123,720  
FirstEnergy Corporation
     3,000       111,270  
Nextera Energy, Inc.
     4,000       220,480  
PG&E Corporation
     3,000       132,540  
Public Service Enterprises Group, Inc.
     4,500       141,795  
Southern Company (The)
     8,400       320,124  
              1,680,889  
                 
TOTAL EQUITY SECURITIES (cost - $52,656,555)
       63,625,971  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
  
SCHEDULE OF INVESTMENTS - MARCH 31, 2011 (UNAUDITED) (Continued)
  
   
RIGHTS - 0.00%
                
Gabelli Healthcare & WellnessRx Trust (The)* (cost - $1,481)
     4,361     $ 1,570  
SHORT-TERM INVESTMENT - 0.54%
                
MONEY MARKET FUND - 0.54%
                
Fidelity Institutional Money Market Government Portfolio - Class I (cost - $348,009)
     348,009       348,009  
                 
TOTAL INVESTMENTS - 99.66% (cost - $53,006,045)
       63,975,550  
                 
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.34%
       216,060  
                 
NET ASSETS - 100.00%
     $ 64,191,610  

(a) Affiliated investment.  The Fund holds 0.86% (based on net assets) of The 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, 2011.
 
* Non-income producing security.
 
See accompanying notes to schedule of investments.

 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
NOTES TO SCHEDULES OF INVESTMENTS
March 31, 2011 (UNAUDITED)
 
Federal Income Tax Cost: At March 31, 2011 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 $53,006,045, $13,275,169, $(2,305,664) and $10,969,505, 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 traded on a national exchange 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, 2011 in valuing the Fund’s investments carried at value:
 
Valuation Inputs
  
INVESTMENTS
IN
SECURITIES
    
OTHER
FINANCIAL
INSTRUMENTS*
  
             
Level 1 - Quoted Prices
            
  Equity Investments
  
$
63,627,541
    
$
-
  
  Short-Term Investments
    
348,009
      
-
  
Level 2 - Other Significant Observable Inputs
    
-
      
-
  
Level 3 – Significant Unobservable Inputs
    
-
      
-
  
Total
  
$
63,975,550
    
$
-
  
 
* Other financial instruments include futures, forwards and swap contracts.
 
 
 
 
 
The breakdown of the Fund’s investments into major categories is disclosed in its Schedule of Investments.
 
During the three months ended March 31, 2011, 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, 2011.
 
The disclosures for the Fund’s fiscal year beginning January 1, 2011 relate to presenting separately any Level 3 purchases, sales, issuances and settlements on a gross basis instead of one net amount.  Management will continue to evaluate the impact of ASU No. 2010-6 for the required disclosures.
 
The Fund is exposed to financial market risks, including the valuations of its investment portfolio.  For the three months ended March 31, 2011, the Fund did not engage in derivative instruments and other hedging activities.
 
The Fund has evaluated the need for additional disclosures and/or adjustments resulting through the date its Schedule of Investments were issued.  Based on this evaluation, no additional disclosures or adjustments were required to such Schedule of Investments.
 
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 8, 2011 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 8, 2011, 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 23, 2011
    
 
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 23, 2011
    
 
By (Signature and Title)*
/s/ Frank J. Maresca
  
 
Frank J. Maresca, Treasurer
  
 
(Principal Financial Officer)
  
     
Date
May 23, 2011
    
 
* Print the name and title of each signing officer under his or her signature.