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
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Cornerstone Strategic Value Fund, Inc.
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(Exact name of registrant as specified in charter)
383 Madison Avenue, New York, NY 10179
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(Address of principal executive offices) (Zip code)
Kayadti A. Madison
Cornerstone Strategic Value Fund, Inc., 383 Madison Avenue, New York, NY 10179
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(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 272-3550
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Date of fiscal year end: December 31, 2008
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Date of reporting period: March 31, 2008
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ITEM 1: SCHEDULE OF INVESTMENTS
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CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
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NO. OF
DESCRIPTION SHARES VALUE
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EQUITY SECURITIES - 99.54%
CLOSED-END FUNDS - 1.52%
Adams Express Company (a) 49,500 $ 620,235
Boulder Growth & Income Fund Inc. ^ 4,600 38,042
Dreman/Claymore Dividend & Income Fund 4,300 61,791
General American Investors Company 3,000 95,370
Liberty All-Star Equity Fund 96,330 615,549
Zweig Fund, Inc. 29,000 133,110
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1,564,097
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CONSUMER DISCRETIONARY - 7.80%
Amazon.com, Inc. * 5,500 392,150
Carnival Corporation 6,300 255,024
Clear Channel Communications, Inc. 3,300 96,426
Comcast Corporation, Class A 28,555 552,254
Gap, Inc. (The) 12,200 240,096
Home Depot, Inc. (The) 15,600 436,332
J.C. Penney Company, Inc. 4,500 169,695
Johnson Controls, Inc. 7,500 253,500
Lowe's Companies, Inc. 11,900 272,986
McDonald's Corporation 18,600 1,037,322
News Corporation, Class A 23,000 431,250
NIKE, Inc., Class B 6,100 414,800
Omnicom Group Inc. 6,200 273,916
Staples, Inc. 10,800 238,788
Starbucks Corporation * 2,800 49,000
Target Corporation 6,800 344,624
Time Warner Inc. 43,500 609,870
TJX Companies, Inc. (The) 3,000 99,210
Toyota Motor Corporation ADR 2,500 252,225
Viacom Inc., Class B * 9,450 374,409
Walt Disney Company (The) 38,700 1,214,406
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8,008,283
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CONSUMER STAPLES - 11.91%
Altria Group, Inc 13,300 295,260
Anheuser-Busch Companies, Inc. 6,200 294,190
Archer-Daniels-Midland Company 3,960 162,994
Coca-Cola Company (The) 41,000 2,495,670
Colgate-Palmolive Company 6,400 498,624
ConAgra Foods, Inc. 10,900 261,055
CVS Corporation 10,430 422,519
General Mills, Inc. 5,000 299,400
H.J. Heinz Company 4,000 187,880
Kimberly-Clark Corporation 10,500 677,775
Kraft Foods Inc, Class A 10,932 339,001
Kroger Co. (The) 13,800 350,520
PepsiCo, Inc. 11,100 801,420
Philip Morris International Inc. * 13,300 672,714
Procter & Gamble Company (The) 37,797 2,648,436
Sysco Corporation 9,800 284,396
Walgreen Co. 19,800 754,182
Wal-Mart Stores, Inc. 15,100 795,468
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12,241,504
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ENERGY - 13.87%
Baker Hughes Incorporated 10,600 726,100
BJ Services Company 3,500 99,785
Chevron Corporation 28,032 2,392,812
ConocoPhillips 10,474 798,224
ENSCO International Incorporated 2,500 156,550
Exxon Mobil Corporation 70,500 5,962,888
Halliburton Company 13,200 519,156
Marathon Oil Corp. 15,000 684,000
Noble Corporation 2,500 124,175
Occidental Petroleum Corporation 10,500 768,285
Schlumberger Limited 11,500 1,000,500
Transocean Inc. 2,500 338,000
Valero Energy Corporation 6,000 294,660
XTO Energy, Inc. 6,250 386,625
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14,251,760
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FINANCIALS - 12.90%
AFLAC Incorporated 7,000 454,650
Allstate Corporation (The) 6,800 326,808
American Express Company 14,600 638,312
American International Group, Inc. 12,831 554,941
Bank of America Corporation 36,138 1,369,992
Bank of New York Mellon Corporation 8,254 344,439
BB&T Corporation 4,000 128,240
CB Richard Ellis Group, Inc., Class A * 9,000 194,760
Charles Schwab Corporation (The) 6,000 112,980
Chubb Corporation (The) 4,100 202,868
Citigroup Inc. 25,300 541,926
Fannie Mae 4,000 105,280
Freddie Mac 5,400 136,728
Goldman Sachs Group, Inc. (The) 4,800 793,872
Hartford Financial Services Group, Inc. (The) 6,000 454,620
JPMorgan Chase & Co. 31,132 1,337,119
Lehman Brothers Holdings Inc. 4,700 176,908
Marsh & McLennan Companies, Inc. 6,000 146,100
Merrill Lynch & Co., Inc. 4,700 191,478
Metlife, Inc. 15,200 915,952
Morgan Stanley 7,000 319,900
PNC Financial Services Group, Inc. 4,600 301,622
Prudential Financial, Inc. 4,200 328,650
State Street Corporation 3,500 276,500
SunTrust Banks, Inc. 5,000 275,700
Travelers Companies, Inc. (The) 9,476 453,427
U.S. Bancorp 21,901 708,716
Wachovia Corporation 22,100 596,700
Wells Fargo & Company 29,900 870,090
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13,259,278
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HEALTHCARE - 10.97%
Abbott Laboratories 11,200 617,680
Aetna Inc. 6,000 252,540
Amgen Inc. * 9,900 413,622
Baxter International Inc. 5,000 289,100
Becton, Dickinson and Company 4,400 377,740
Biogen Idec Inc. * 3,000 185,070
Bristol-Myers Squibb Company 25,500 543,150
Cardinal Health, Inc. 2,950 154,904
Covidien Limited 2,599 115,006
Eli Lilly and Company 4,700 242,473
Gilead Sciences, Inc. * 7,000 360,710
Johnson & Johnson 40,900 2,653,183
McKesson Corporation 2,800 146,636
Medtronic, Inc. 14,500 701,365
Merck & Co. Inc. 17,500 664,125
Pfizer Inc. 43,560 911,711
Schering-Plough Corporation 29,000 417,890
Stryker Corporation 3,500 227,675
UnitedHealth Group Incorporated 22,000 755,920
WellPoint Inc. * 9,000 397,170
Wyeth 20,200 843,552
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11,271,222
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INDUSTRIALS - 13.18%
3M Co. 9,400 744,010
Boeing Company (The) 4,200 312,354
Burlington Northern Santa Fe Corporation 5,400 497,988
Caterpillar Inc. 6,800 532,372
CSX Corporation 6,500 364,455
Danaher Corporation 3,500 266,105
Deere & Company 5,000 402,200
Emerson Electric Co. 12,000 617,520
FedEx Corp. 2,000 185,340
General Dynamics Corporation 3,200 266,784
General Electric Company 100,900 3,734,309
Honeywell International Inc. 16,000 902,720
Illinois Tool Works Inc. 13,300 641,459
Ingersoll-Rand Company Ltd., Class A 4,500 200,610
Lockheed Martin Corporation 4,000 397,200
Norfolk Southern Corporation 5,500 298,760
Northrop Grumman Corporation 2,500 194,525
Precision Castparts Corp. 2,500 255,200
Raytheon Company 11,000 710,710
Union Pacific Corporation 2,000 250,760
United Parcel Service, Inc., Class B 9,600 700,992
United Technologies Corporation 11,000 757,020
Waste Management, Inc. 9,300 312,108
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13,545,501
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INFORMATION TECHNOLOGY - 16.61%
Adobe Systems Incorporated * 4,200 149,478
Agilent Technologies Inc. * 4,000 119,320
Apple Computer, Inc. * 8,500 1,219,750
Applied Materials, Inc. 24,800 483,848
Automatic Data Processing, Inc. 11,900 504,441
Cisco Systems, Inc. * 57,900 1,394,811
Corning Incorporated 16,500 396,660
Dell Inc. * 4,700 93,624
eBay Inc. * 8,500 253,640
EMC Corporation * 79,648 1,142,152
Google Inc. * 5,500 2,422,585
Hewlett-Packard Company 19,900 908,634
Intel Corporation 60,500 1,281,390
International Business Machines Corporation 12,600 1,450,764
Microsoft Corporation 87,200 2,474,736
Motorola, Inc. 10,000 93,000
Oracle Corporation * 48,272 944,200
QUALCOMM Inc. 13,000 533,000
Sun Microsystems, Inc. * 1,875 29,119
Texas Instruments Incorporated 26,400 746,328
Yahoo! Inc. * 14,800 428,164
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17,069,644
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MATERIALS - 3.75%
Alcoa Inc. 16,900 609,414
Dow Chemical Company (The) 5,400 198,990
E. I. du Pont de Nemours and Company 17,300 808,948
Freeport-McMoRan Copper & Gold, Inc. 7,500 721,650
International Paper Company 15,500 421,600
Monsanto Company 5,660 631,090
Praxair, Inc. 5,500 463,265
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3,854,957
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REAL ESTATE INVESTMENT TRUST - 0.36%
Simon Property Group, Inc. 4,000 371,640
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TELECOMMUNICATION SERVICES - 3.40%
AT&T Inc. 56,539 2,165,444
Sprint Nextel Corporation 10,946 73,229
Verizon Communications Inc. 34,300 1,250,235
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3,488,908
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UTILITIES - 3.27%
American Electric Power Company, Inc. 8,000 333,040
Dominion Resources, Inc. 14,200 579,928
Duke Energy Corporation 15,800 282,030
Edison International 9,000 441,180
Exelon Corporation 3,000 243,810
FirstEnergy Corp. 5,000 343,100
FPL Group, Inc. 4,000 250,960
PG&E Corporation 5,000 184,100
Public Service Enterprise Group Incorporated 7,000 281,330
Southern Company (The) 11,900 423,759
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3,363,237
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TOTAL EQUITY SECURITIES
(cost - $87,748,662) 102,290,031
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PRINCIPAL
AMOUNT
(000'S)
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SHORT-TERM INVESTMENTS - 0.57%
MONEY MARKET SECURITY - 0.54%
JPMorgan U.S. Government Money Market Fund $ 552 551,815
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REPURCHASE AGREEMENT - 0.03%
Bear, Stearns & Co. Inc. + ++
(Agreement dated 3/31/2008 to
be repurchased at $37,953, 3.00%,
4/1/2008, collateralized by $40,047
in United States Treasury Bonds) 38 37,950
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TOTAL SHORT-TERM INVESTMENTS
(cost - $589,765) 589,765
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TOTAL INVESTMENTS - 100.11%
(cost - $88,338,427) 102,879,796
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LIABILITIES IN EXCESS OF OTHER ASSETS - (0.11)% (116,280)
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NET ASSETS - 100.00% $ 102,763,516
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(a) Affiliated investment. The Fund holds 0.60% (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, 2008 there were no purchases or
sales of this security.
^ Security or a portion thereof is out on loan.
* Non-income producing security.
ADR American Depositary Receipt
+ Stated interest rate, before rebate earned by borrower of securities on
loan.
++ Represents investment purchased with collateral received for securities on
loan.
Federal Income Tax Cost: At March 31, 2008 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
$88,338,427, $20,441,656, $(5,900,287), and $14,541,369, 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
risk, 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 in 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, 2008 in valuing
the Fund's investments carried at value:
INVESTMENTS IN OTHER FINANCIAL
VALUATION INPUTS SECURITIES INSTRUMENTS*
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Level 1 - Quoted Prices $102,290,031 $ --
Level 2 - Other Significant Observable Inputs 589,765 --
Level 3 - Significant Unobservable Inputs -- --
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TOTAL $102,879,796 $ --
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*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, 2008.
Securities valuation policies and other investment related disclosures are
hereby incorporated by reference to the Fund's annual report previously filed
with the Securities and Exchange Commission on the Form N-CSR on March 10, 2008
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 Form N-CSR on
March 10, 2008, file number 811-05150. This information is also available to
registered shareholders by calling (800) 937-5449. For general inquiries, please
call (212) 272-3550. This information is also available on the website of the
Securities and Exchange Commission - http://www.sec.gov.
ITEM 2: CONTROLS AND PROCEDURES
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")), were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities and
Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act) 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
1. The certifications of the registrant as required by Rule 30a-2(a) under the
Act are exhibits to this report.
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.
Cornerstone Strategic Value Fund, Inc.
/s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Principal Executive Officer
Date: May 23, 2008
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.
/s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Principal Executive Officer
Date: May 23, 2008
/s/ Kayadti A. Madison
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Name: Kayadti A. Madison
Title: Principal Financial Officer
Date: May 23, 2008