Gray Television, Inc. (GTN), CBS Corporation (CBS), Williams Companies Inc. (WMB): Whetstone Capital’s Top Picks

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David Atterbury’s Whetstone Capital Advisors has filed their most recent 13F quarterly report with the SEC, disclosing their long position holdings as of December 30. It is just the second 13F filed by the young fund, and their holdings have remained relatively stable at the top, with Gray Television, Inc. (NYSE:GTN) and CBS Corporation (NYSE:CBS) remaining in their top two, though they’ve switched places, while Williams Companies Inc. (NYSE:WMB) rounds out the top three. Whetstone added 112,271 shares to their holding in Gray Television during the fourth quarter, bringing their total to 1.46 million. They also made additions of 28,400 and 150,324 to their holdings of CBS and Williams respectively, bringing their totals to 246,065 and 250,633.

Whetstone Capital

Kansas City-based Whetstone Capital Advisors was founded in 2010 by President and Portfolio Manager David Atterbury, who previously worked with Brown Brothers Harriman, Return Holdings, Ashkenazy Acquisition Corp, and Merrill Lynch. Along with Partner Thomas McGannon, the long-focused equity fund provided an impressive 27.45% three-year average return from its inception, growing from $38 million to $98 million during that time. In addition to the fund’s allocation of 100% of their capital into long equity positions, they also invest 30% of that value into short positions, not as a hedge against their long positions as shorts are often employed by funds, but rather in companies they feel will legitimately decline. The fund now manages an equity portfolio valued at $208 million.

In Gray Television, Inc. (NYSE:GTN), Whetstone has a number of reasons they are betting on the local TV broadcaster long-term, as was outlined in a presentation at the end of 2013. Among other things they saw strong potential for political advertising in 2014, 45% of which does through local channels, they saw Gray Television as being in a prime position to build through acquisitions, of which they saw significant possibilities, as well as in signing new re-transmission contracts with cable and satellite providers. They also noted several broader industry tailwinds at the time, including the consolidation wave sweeping the industry.

Gray Television, Inc. (NYSE:GTN) was a volatile stock throughout 2014, boasting a high beta of 3.02, and ultimately had a poor year, falling 21.16%. However the stock maintains a relatively low PEG ratio of 12.45, and institutional ownership is high, at 91%, which suggests a lot of bullish sentiment on the stock right among among the world’s top investors, including Glenhill Advisors, which added to their position last summer. Other bullish funds as of September 30 were Matthew Knauer and Mina Faltas’s Nokota Management with 2.2 million shares, and Edward A. Mule’s Silver Point Capital with 1.7 million shares.

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