N-Q 1 t302935.txt QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS 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) 383 Madison Avenue, New York, NY 10179 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Jodi Levine Cornerstone Strategic Value Fund, Inc., 383 Madison Avenue, New York, NY 10179 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (212) 272-3550 ----------------------------- Date of fiscal year end: December 31, 2006 ----------------- Date of reporting period: September 30, 2006 ------------------ ITEM 1: SCHEDULE OF INVESTMENTS CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2006 (UNAUDITED) NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- EQUITY SECURITIES - 99.36% CLOSED-END DOMESTIC FUNDS - 0.97% Adams Express Company 49,500 $ 669,240 General American Investors Company 3,000 112,980 Liberty All-Star Growth Fund, Inc. 19,800 100,386 Zweig Fund, Inc. ^ 75,000 409,500 ------------ 1,292,106 ------------ CONSUMER DISCRETIONARY - 10.39% Acco Brands Corporation * 235 5,231 Bed Bath & Beyond Inc. ^ * 4,200 160,692 Best Buy Co., Inc. 3,625 194,155 Black & Decker Corporation (The) 3,000 238,050 Carnival Corporation ^ 11,800 554,954 CBS Corporation ^ 4,450 125,356 Circuit City Stores, Inc. ^ 2,500 62,775 Clear Channel Communications, Inc. * 8,800 253,880 Comcast Corporation, Special Class A ^ * 19,037 701,513 D.R. Horton, Inc. ^ 7,000 167,650 Eastman Kodak Company 1,400 31,360 eBay Inc. * 21,500 609,740 Federated Department Stores, Inc. 11,052 477,557 Ford Motor Company 3,000 24,270 Fortune Brands, Inc. 3,500 262,885 Gannett Co., Inc. 6,000 340,980 Gap, Inc. (The) 12,200 231,190 Goodyear Tire & Rubber Company (The) ^ * 4,500 65,250 Hanesbrands, Inc. * 1,437 32,347 Harley-Davidson, Inc. ^ 4,400 276,100 Hilton Hotels Corporation ^ 11,200 311,920 Home Depot, Inc. (The) 28,100 1,019,187 J.C. Penney Company, Inc. 4,500 307,755 Kohl's Corporation ^ * 2,500 162,300 Live Nation Inc. ^ * 1,100 22,462 Lowe's Companies, Inc. ^ 22,400 628,544 Marriott International, Inc., Class A ^ 4,200 162,288 Mattel, Inc. 5,500 108,350 McDonald's Corporation 17,600 688,512 News Corporation ^ 23,000 451,950 NIKE, Inc. ^ 2,300 201,526 Omnicom Group Inc. 4,100 383,760 Sears Holdings Corporation * 503 79,519 Staples, Inc. ^ 10,800 262,764 Starbucks Corporation * 10,800 367,740 Target Corporation 11,800 651,950 Time Warner Inc. 76,000 1,385,480 NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- TJX Companies, Inc. (The) ^ 3,000 $ 84,090 Univision Communications Inc., Class A * 7,000 240,380 Viacom Inc. * 11,950 444,301 Walt Disney Company (The) 20,200 624,382 Wyndham Worldwide Corp * 5,600 156,632 Yum! Brands, Inc. 6,000 312,300 ------------ 13,874,027 ------------ CONSUMER STAPLES - 10.10% Altria Group, Inc. 22,300 1,707,065 Anheuser-Busch Companies, Inc. 6,200 294,562 Archer-Daniels-Midland Company 9,460 358,345 Campbell Soup Company 2,000 73,000 Coca-Cola Company (The) 23,500 1,049,980 Coca-Cola Enterprises Inc. 3,000 62,490 Colgate-Palmolive Company 11,100 689,310 ConAgra Foods, Inc. 4,400 107,712 Costco Wholesale Corporation 6,500 322,920 CVS Corporation 9,000 289,080 General Mills, Inc. 12,000 679,200 H.J. Heinz Company 6,600 276,738 Kroger Co. (The) 8,800 203,632 Pepsi Bottling Group, Inc. (The) ^ 4,000 142,000 PepsiCo, Inc. 24,800 1,618,448 Procter & Gamble Company (The) 41,297 2,559,588 Sara Lee Corporation 16,000 257,120 Sysco Corporation ^ 5,800 194,010 Walgreen Co. 14,300 634,777 Wal-Mart Stores, Inc. 39,800 1,962,936 ------------ 13,482,913 ------------ ENERGY - 9.09% Anadarko Petroleum Corp. ^ 8,300 363,789 Baker Hughes Incorporated 8,100 552,420 Chevron Corporation 24,532 1,591,146 ConocoPhillips 17,974 1,069,992 Devon Energy Corporation 5,000 315,750 Exxon Mobil Corporation 76,500 5,133,150 Hugoton Royalty Trust ^ 298 7,852 Marathon Oil Corp. 7,500 576,750 Occidental Petroleum Corporation 16,000 769,760 Schlumberger Limited 22,000 1,364,660 Transocean Inc. * 2,500 183,075 XTO Energy, Inc. ^ 5,000 210,650 ------------ 12,138,994 ------------ FINANCIALS - 21.45% AFLAC Incorporated 7,000 320,320 Allstate Corporation (The) 9,300 583,389 American Express Company 19,600 1,099,168 American International Group, Inc. 37,531 2,486,804 Ameriprise Financial, Inc. 3,120 146,328 NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- Aon Corporation 4,900 $ 165,963 Bank of America Corporation 67,938 3,639,439 Bank of New York Company, Inc. (The) 11,400 401,964 Charles Schwab Corporation (The) 8,500 152,150 Citigroup Inc. ^ 49,300 2,448,731 Fannie Mae 13,000 726,830 Fifth Third Bancorp ^ 2,500 95,200 Franklin Resources, Inc. 3,700 391,275 Freddie Mac 14,500 961,785 Goldman Sachs Group, Inc. (The) ^ 7,300 1,234,941 Hartford Financial Services Group, Inc. (The) 6,000 520,500 JPMorgan Chase & Co. 40,132 1,884,599 Lehman Brothers Holdings Inc. 7,200 531,792 Marsh & McLennan Companies, Inc. ^ 10,100 284,315 Merrill Lynch & Co., Inc. ^ 7,200 563,184 Metlife, Inc. 15,200 861,536 Morgan Stanley ^ 15,500 1,130,105 National City Corporation 12,700 464,820 Northern Trust Corporation ^ 3,500 204,505 PNC Financial Services Group, Inc. 7,100 514,324 Prudential Financial, Inc. 8,200 625,250 Realogy Corporation * 7,000 158,760 St. Paul Travelers Companies, Inc. (The) 9,476 444,330 State Street Corporation 3,500 218,400 SunTrust Banks, Inc. 7,600 587,328 U.S. Bancorp 28,401 943,481 UnumProvident Corporation 8,100 157,059 Wachovia Corporation 22,600 1,261,080 Washington Mutual, Inc. 15,550 675,958 Wells Fargo & Company 48,400 1,751,112 ------------ 28,636,725 ------------ HEALTHCARE - 12.69% Abbott Laboratories 28,000 1,359,680 Aetna Inc. ^ 6,000 237,300 Amgen Inc. * 18,900 1,351,917 Applera Corporation 8,000 264,880 Baxter International Inc. 5,000 227,300 Becton, Dickinson and Company 6,900 487,623 Biogen Idec Inc. * 5,500 245,740 Boston Scientific Corporation * 15,551 229,999 Bristol-Myers Squibb Company ^ 30,500 760,060 Cardinal Health, Inc. 5,450 358,283 Caremark Rx, Inc. 9,000 510,030 Eli Lilly and Company 11,000 627,000 Gilead Sciences, Inc. * 3,500 240,450 HCA, Inc. 8,500 424,065 Hospira, Inc. * 3,700 141,599 IMS Health Incorporated 7,400 197,136 Johnson & Johnson 40,900 2,656,046 NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- McKesson Corporation 2,300 $ 121,256 Medco Health Solutions, Inc. * 6,687 401,956 Medtronic, Inc. 19,000 882,360 Merck & Co. Inc. 20,000 838,000 Pfizer Inc. 68,560 1,944,362 Schering-Plough Corporation 12,500 276,125 Tenet Healthcare Corporation * 2,250 18,315 UnitedHealth Group Incorporated 17,000 836,400 WellPoint Inc. * 6,000 462,300 Wyeth 16,700 849,028 ------------ 16,949,210 ------------ INDUSTRIALS - 10.48% 3M Co. 12,400 922,808 Avis Budget Group 2,800 51,212 Boeing Company (The) 9,200 725,420 Caterpillar Inc. ^ 11,800 776,440 CSX Corporation 18,000 590,940 Danaher Corporation ^ 3,500 240,345 Emerson Electric Co. 6,000 503,160 FedEx Corp. 4,500 489,060 General Dynamics Corporation 6,200 444,354 General Electric Company 112,500 3,971,250 Honeywell International Inc. 12,500 511,250 Illinois Tool Works Inc. 10,800 484,920 Ingersoll-Rand Company Ltd. Class A 7,000 265,860 Lockheed Martin Corporation 4,000 344,240 Masco Corporation ^ 4,200 115,164 Norfolk Southern Corporation 10,000 440,500 Northrop Grumman Corporation 5,000 340,350 Rockwell Automation, Inc. 2,500 145,250 Southwest Airlines Co. 6,450 107,457 Textron Inc. 4,500 393,750 Tyco International Ltd. 15,397 430,962 Union Pacific Corporation 2,000 176,000 United Parcel Service, Inc., Class B 5,300 381,282 United Technologies Corporation 11,000 696,850 Waste Management, Inc. 12,200 447,496 ------------ 13,996,320 ------------ INFORMATION TECHNOLOGY - 14.88% Adobe Systems Incorporated * 9,200 344,540 Analog Devices, Inc. 9,200 270,388 Apple Computer, Inc. * 3,000 231,090 Applied Materials, Inc. 33,800 599,274 Automatic Data Processing, Inc. 9,900 468,666 Cisco Systems, Inc. * 96,400 2,217,200 Corning Incorporated * 11,000 268,510 Dell Inc. * 18,700 427,108 Electronic Arts Inc. ^ * 5,000 278,400 Electronic Data Systems Corporation 5,000 122,600 NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- EMC Corporation * 212,648 $ 2,547,523 First Data Corporation 11,324 475,608 Freescale Semiconductor Inc., Class B * 6,512 247,521 Hewlett-Packard Company ^ 19,900 730,131 Intel Corporation 82,500 1,697,025 International Business Machines Corporation 12,600 1,032,444 Linear Technology Corporation 6,500 202,280 Lucent Technologies Inc. * 10,700 25,038 Maxim Integrated Products, Inc. 2,300 64,561 Micron Technology, Inc. * 11,500 200,100 Microsoft Corporation 120,900 3,304,197 Motorola, Inc. 34,700 867,500 Oracle Corporation * 43,872 778,289 Paychex, Inc. 4,200 154,770 QUALCOMM Inc. 21,000 763,350 Sanmina-SCI Corporation * 5,500 20,570 Solectron Corporation * 3,000 9,780 Sun Microsystems, Inc. * 7,500 37,275 Symantec Corporation * 10,000 212,800 Texas Instruments Incorporated 23,900 794,675 Yahoo! Inc. * 18,800 475,264 ------------ 19,868,477 ------------ MATERIALS - 2.34% Air Products & Chemicals, Inc. 1,000 66,370 Alcoa Inc. ^ 14,200 398,168 Dow Chemical Company (The) 15,400 600,292 E. I. du Pont de Nemours and Company ^ 14,800 634,032 International Paper Company ^ 10,500 363,615 Monsanto Company 10,160 477,622 Newmont Mining Corporation 7,000 299,250 Praxair, Inc. 3,000 177,480 Rohm and Hass Company 1,000 47,350 Weyerhaeuser Company ^ 1,000 61,530 ------------ 3,125,709 ------------ REAL ESTATE INVESTMENT TRUST - 0.44% Simon Property Group, Inc. 6,500 589,030 ------------ TELECOMMUNICATIONS SERVICES - 3.27% ALLTEL Corporation 4,000 222,000 AT&T Inc. 42,364 1,379,372 BellSouth Corporation 19,000 812,250 Embarq Corporation 1,922 92,967 Sprint Nextel Corporation ^ 38,446 659,349 Verizon Communications Inc. 30,900 1,147,317 Windstream Corporation 4,135 54,541 ------------ 4,367,796 ------------ UTILITIES - 3.26% American Electric Power Company, Inc. 5,500 200,035 CenterPoint Energy, Inc. 13,900 199,048 NO. OF DESCRIPTION SHARES VALUE ------------------------------------------------------------------------------- Dominion Resources, Inc. 4,600 $ 351,854 Duke Energy Corporation 13,300 401,660 Edison International ^ 4,000 166,560 Exelon Corporation 8,500 514,590 FirstEnergy Corp. 5,000 279,300 FPL Group, Inc. ^ 4,000 180,000 PG&E Corporation 9,000 374,850 Progress Energy, Inc. 3,500 158,830 Public Service Enterprise Group Incorporated 6,000 367,140 Southern Company (The) ^ 11,900 410,074 TXU Corp. ^ 9,400 587,688 Williams Companies, Inc. (The) ^ 7,000 167,090 ------------ 4,358,719 ------------ TOTAL EQUITY SECURITIES (cost - $111,744,455) 132,680,026 ------------ PRINCIPAL AMOUNT 000'S ------- SHORT-TERM INVESTMENTS - 3.53% REPURCHASE AGREEMENTS - 3.53% Bear, Stearns and Co., Inc. + ++ $ 2,785 2,784,570 (Agreement dated 9/30/2006 to be repurchased at $2,785,193), 2.6875%, 10/2/2006, collateralized by $2,865,553 in U.S. Treasury Bond Strips) Bear, Stearns and Co., Inc. 1,059 1,059,458 (Agreement dated 9/30/2006 to be repurchased at $1,059,899), 5.0000%, 10/2/2006, collateralized by $1,092,600 in U.S. Treasury Bond Strips) Bear, Stearns and Co., Inc. + ++ 872 871,582 (Agreement dated 9/30/2006 to be repurchased at $871,972), 5.3750%, 10/2/2006, collateralized by $899,449 in U.S. Treasury Bond Strips) TOTAL SHORT-TERM INVESTMENTS (cost - $4,715,610) 4,715,610 ------------ TOTAL INVESTMENTS - 102.89% (cost - $116,460,065) 137,395,636 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS - (2.89)% (3,857,743) ------------ NET ASSETS - 100.00% $133,537,893 ============ * 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. ^ Security or a portion thereof is out on loan. Federal Income Tax Cost: At September 30, 2006, 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 $116,460,065, $24,606,113, ($3,670,542), $20,935,571, respectively. 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 August 31, 2006 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 August 31, 2006, 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 -------------------------------- Name: Ralph W. Bradshaw Title: Principal Executive Officer Date: November 22, 2006 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 -------------------------------- Name: Ralph W. Bradshaw Title: Principal Executive Officer Date: November 22, 2006 /s/ Jodi B. Levine -------------------------------- Name: Jodi B. Levine Title: Principal Financial Officer Date: November 22, 2006