Patrick Gideon Wolff’s Grandmaster Capital has filed a 13F with the Securities and Exchange Commission for the reporting period of March 31, disclosing the holdings in its equity portfolio as of that date. The fund, founded and managed by grandmaster chess player Wolff, is fundamentally driven, with a focus on stable businesses that can be invested in long-term. Furthermore, the fund emphasizes that it invests primarily in businesses (and industries) that it fully understands, which is why it was invested in just four sectors as of the latest reporting period: healthcare, finance, information technology, and consumer discretionary.
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While Grandmaster may be the only fund we track headed by a grandmaster chess player (at least that we know of), it is one of only 700+ funds helmed by skilled money managers. We analyze the equity portfolios of those investors and collate their top small-cap picks quarterly as part of our small-cap strategy. Though most people believe tracking 13F filings to be a useless endeavor akin to battling a queen with a pawn, given that they are filed with a delay of a maximum of 45 days after the end of a calendar quarter, the results of our research prove that pawn is not so helpless after all. To be on the safe side, we used a delay of 60 days in our backtests that involved the 13F filings of funds between 1999 and 2012 and we still managed to gain an annual alpha in the double digits with these picks. Moreover, since the official launch of our strategy in August 2012, it has obtained returns of more than 137%, beating the S&P 500 Total Return Index by about 80 percentage points (see the details).
Howard Hughes Corp (NYSE:HHC) is king of the hill (or board) in Grandmaster’s portfolio, the holding moving up from fifth place at the end of 2014 to the top spot three months later, despite being reduced by 1% during the first quarter. The value of the position, comprised of 115,557 shares, increased to $17.91 million regardless, as shares rose by 18.86% during the quarter. It was those hefty returns that helped RIMA Senvest crush the market last quarter with Howard Hughes Corp (NYSE:HHC) as one of its top picks. The developer of master planned housing communities is also a top value investment of author and investor Whitney Tilson of Kase Management. Howard Hughes Corp (NYSE:HHC) is set to report its first quarter earnings this evening.
Anthem Inc (NYSE:ANTM) is the queen of Grandmaster’s portfolio, with the fund’s position of 108,890 shares having a value of $16.81 million. Like Howard Hughes, Anthem made a big move up the board thanks to a monster first quarter during which it returned 23.39%. Those returns vaulted it from ninth to second, despite the position also being trimmed slightly, by 5%. Formerly known as WellPoint, Anthem Inc (NYSE:ANTM) is coming off a very successful first quarter, one in which the health insurer posted big gains in profit and Medicaid enrollments. Adjusted earnings per share were a solid $3.02 for the quarter, a 32.5% increase year-over-year, and $0.35 higher than estimates. Anthem Inc (NYSE:ANTM) helped another of its big shareholders, Louis Navellier’s Navellier & Associates trump the market during the first quarter.
Microsoft Corporation (NASDAQ:MSFT) falls from grace like a promoted pawn being demoted back into its lowly, peasant form. Grandmaster’s holding in the tech giant drops to third from first after the fund slashed it by 22% during the quarter to 389,338 shares, which held a value of $15.83 million as of the end of March. It didn’t help matters that Microsoft Corporation (NASDAQ:MSFT)’s shares also tumbled by nearly 12% during the quarter. The demise of share value was short-lived however, as Microsoft has rebounded with a big second quarter, leaving it up by 3% year-to-date. With billions of dollars in cash, rumors have swirled around Microsoft concerning what its next big move will or should be, with some experts suggesting it should strengthen its Internet of Things segment by acquiring Salesforce.com, inc. (NYSE:CRM), though other analysts think it can do better than that. Jeffrey Ubben, whose fund has representation on Microsoft Corporation (NASDAQ:MSFT)’s board, will have some influence over that next move, whatever it may be. He remains the largest shareholder of Microsoft in our database.
Grandmaster’s position in Vail Resorts, Inc. (NYSE:MTN) moves up a spot to fourth in value at $15.63 million, with the position decreased by 8% during the quarter to 151,113 shares. Vail Resorts, Inc. (NYSE:MTN) was another strong performer for Grandmaster during the first quarter, returning 14.20%. The Bloomfield, Colorado resort operator had a big quarter for its fiscal second quarter of 2015, posting earnings of $3.10 per share that nearly doubled its year-ago earnings of $1.60. Vail Resorts also announced a big increase to its dividends, lifting its most recent dividend payment on March 27 to $0.62 from $0.42 it had paid out throughout 2014. Grandmaster had the greatest exposure to Vail Resorts, Inc. (NYSE:MTN) among the funds in our database, followed by Richard McGuire’s Marcato Capital Management.
Disclosure: None
