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.
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.
CBS Corporation (NYSE:CBS) falls behind Gray Television, Inc. (NYSE:GTN) in the battle for cable provider bragging rights in Whetstone’s portfolio. Despite the drop they actually increased their position in CBS by 13%, as opposed to the 8% increase in Gray. It was Gray’s strong fourth quarter performance which muscled it past CBS, which also enjoyed a solid quarter, rising 3.4%. Shares are still down well down since it closed 2013 at $63.14 however.
CBS Corporation (NYSE:CBS) announces its fourth quarter results tomorrow, with FactSet projecting adjust EPS of $0.76. However the financial world has been abuzz over something else entirely, as rumors have begun to circulate that a reunion between CBS and Viacom, Inc. (NASDAQ:VIA), which originally spun off from CBS at the end of 2005, could be in the cards should Sumner Redstone, the majority owner of both companies, pass away soon. The 91-year-old Redstone has suffered from failing health that has led for his calls to step down from his management position with CBS, while CBS CEO Les Moonves has reportedly been seeking ways to acquire his shares.
Other shareholders will be watching those developments closely are Eric W. Mandelblatt’s Soroban Capital Partners, which owned 10.33 million shares as of September 30 (and also has a huge stake in the last company to be featured, Williams Companies Inc. (NYSE:WMB)), and Peter Adam Hochfelder’s Brahman Capital, which owned 8.29 million shares, making it their second most valuable long position as well.
Lastly is Williams Companies Inc. (NYSE:WMB), which Whetstone made their most bullish move on during the fourth quarter, increasing their position by 149%. Williams enjoyed a strong 2014, rising 17.34% for the year, largely on the strength of their buyout of Access Midstream Partners LP in the middle of June. They also hiked their quarterly dividend to $0.56 on September 10, from $0.43 the previous quarter.
However, Williams Companies Inc. (NYSE:WMB) has struggled since the start of the fourth quarter, falling 18.81%. Despite that, there’s a lot of potential upside in the company, especially from that Access Midstream division, which merges with another of the company’s MLP’s, Williams Partners LP, later this year. Williams is also planning on building a propane dehydrogenation plant in Alberta, Canada beginning this year that would convert that country’s overabundant and cheap propane into much more valuable polypropylene that will be shipped domestically and internationally.
Keith Meister’s Corvex Capital is a big believer in Williams Companies Inc. (NYSE:WMB), with ownership of 41.68 million shares, worth 27.82% of the value of their entire $8.29 billion equity portfolio as of September 30. As mentioned, Soroban Capital Partners is also a large shareholder (also its most valuable position) with 21 million shares, while Robert Pitts’ Steadfast Capital Management owned 6.21 million shares, its second most valuable position.
Disclosure: None
