| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Right Tail Capital's Q1 2026 letter emphasizes the enduring value of fundamental investment principles while embracing technological evolution. Manager Jeremy Kokemor maintains focus on deep fundamental research, long-term ownership of high-quality businesses, and patient capital allocation. The fund is incorporating artificial intelligence tools to enhance research efficiency, using AI to summarize information, highlight inconsistencies, and surface investigative questions, while preserving human judgment for critical decisions like meeting management teams and developing conviction. Markets have experienced volatility driven by AI implications and geopolitical tensions including US-Iran conflict, creating opportunities for patient investors. The portfolio spotlight features NRP, a coal royalty company with 13 million acres of mineral interests, predominantly exposed to metallurgical coal. NRP trades at high single-digit earnings multiples despite 25+ years of metallurgical coal reserves, with a dramatically improved balance sheet transitioning from $1.4 billion debt to debt-free status. The manager sees potential for $15-25 per share free cash flow in normalized conditions, representing significant upside from current $125 price levels.
Right Tail Capital maintains a foundation of deep fundamental research, long-term ownership of high-quality businesses, and patience as compounding does its work, while leveraging evolving AI tools to enhance research efficiency without replacing fundamental judgment.
Manager maintains focus on identifying businesses with durable economics and management teams capable of navigating uncertain environments. Will continue to invest with a long-term mindset selecting companies most likely to continue to thrive. Expects the market to eventually reward underlying cash-flow generating power of businesses over time.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 7 2026 | 2026 Q1 | NRP | AI, Coal, Quality, royalties, technology, value | NRP | Right Tail Capital blends timeless investment principles with AI-enhanced research tools while maintaining focus on high-quality businesses and patient capital allocation. Current market volatility from AI disruption fears and geopolitical tensions creates opportunities. Portfolio holding NRP offers compelling value as a coal royalty company with 25+ year reserves, improved balance sheet, and potential for significant cash flow generation at attractive multiples. |
| Jan 5 2026 | 2025 Q4 | CSU.TO, GOOGL | AI, long-term, Patience, Quality, technology, underperformance, value | GOOG | Right Tail delivered 0.34% in 2025 versus S&P 500's 17.8%, as manager Jeremy Kokemor avoided AI momentum and maintained focus on quality businesses at attractive prices. Successfully added to Alphabet during weakness, seeing shares recover from $150 to above $300. Believes current market concentration creates opportunities for patient, value-oriented approach targeting durable competitive advantages. |
| Oct 5 2025 | 2025 Q3 | AAP, AZO, CSU.TO, ORLY | Auto Aftermarket, Compounding, Culture, Distribution, long-term, Quality | ORLY | Right Tail Capital highlights O'Reilly Auto Parts as a prime example of their long-term quality investing approach. ORLY's superior distribution network, balanced DIY/DIFM model, and promote-from-within culture create sustainable competitive advantages. The company has consistently outperformed peers and risen from $40 to over $100 per share since Right Tail's inception, demonstrating the power of investing in high-quality compounders. |
| Jul 8 2025 | 2025 Q2 | BYD.TO, CHTR, IAC, NSC, NSIT, SCHW, SSNC | Business, Capital Allocation, Long Term, portfolio, Quality | - | Right Tail Capital celebrates three years of growth from $3M to $27M AUM while maintaining focus on high-quality businesses held long-term. The manager detailed seven portfolio exits driven by weakened theses, with the remaining portfolio demonstrating resilience during recent market volatility. Future focus centers on finding exceptional businesses earlier in their reinvestment cycles for superior long-term compounding. |
| Apr 5 2025 | 2025 Q1 | AAP, AZO, CPRT, CSU.TO, ORLY | Compounding, Concentration, long-term, Patience, Quality, value | - | Right Tail Capital maintains its concentrated strategy of investing in undervalued, high-quality businesses despite market volatility from geopolitical tensions and trade conflicts. The manager views current uncertainty as creating opportunities, emphasizing five-year investment horizons and expecting positive surprises from excellent businesses like Constellation Software, O'Reilly Auto Parts, and Copart to drive long-term compounding returns. |
| Jan 7 2025 | 2024 Q4 | AAPL, AMZN, BRK-B, GOOGL, META, MSFT, NVDA, TSLA | Compounding, Concentration, long-term, Quality, value | - | Right Tail delivered 10.24% returns in 2024, underperforming the Magnificent 7-driven market but staying true to its concentrated value approach. The manager remains optimistic about long-term compounding prospects, believing recent large-cap concentration creates opportunities elsewhere. With only Alphabet among mega-caps, the fund focuses on undervalued quality businesses for multi-year wealth creation. |
| Oct 14 2024 | 2024 Q3 | BRO, CDW, FERG, LKQ, MSFT, NSIT, ORLY | Concentration, Distribution, IT Solutions, long-term, technology, value |
CDW NSIT |
Right Tail Capital focuses on concentrated positions in undervalued, high-quality businesses with long-term compounding potential. The fund's main holdings are technology distributors CDW and NSIT, positioned between fragmented customer and vendor bases. Despite recent growth challenges following Covid tech spending normalization, the manager expects these investments to double over five years through earnings growth. |
| Jul 8 2024 | 2024 Q2 | - | - | - | |
| Apr 26 2024 | 2024 Q1 | BYD.TO | Auto Aftermarket, Collision Repair, Consolidation, Long Term, value | BYD.TO | Right Tail Capital maintains a long-term investment approach, spotlighting newest holding Boyd Group Services, a collision repair consolidator with ~950 locations. Boyd operates in a fragmented industry where top players control only 20% market share, historically achieving 25%+ returns on invested capital. Manager expects the stock to potentially double over 4-5 years through continued industry consolidation. |
| Nov 1 2024 | 2023 Q4 | SCHW | Banking, Compounding, Patience, Quality, value | - | Right Tail Capital posted 29% gross returns in 2023, outperforming the S&P 500, with strong stock selection driving results. The manager sold Charles Schwab during banking stress and redeployed proceeds into best ideas. Philosophy emphasizes patient capital allocation in quality businesses with sustainable returns, maintaining discipline while seeking compelling long-term compounding opportunities. |
| Nov 10 2023 | 2023 Q3 | CSU.TO, FERG | Concentration, Distribution, Long Term, Quality, software, value |
FERG CSU.TO |
Right Tail Capital focuses on concentrated, long-term ownership of high-quality businesses. Key holdings Ferguson and Constellation Software have delivered strong returns, with Ferguson up 40% since 2022 and Constellation up 50% since Q3 2022. The manager expects continued mid-teens compounding from both companies through market share gains and disciplined capital deployment. |
| Jul 22 2023 | 2023 Q2 | NVR | Compounding, Homebuilders, Long Term, Patience, value | CNVRG PM | Right Tail Capital emphasizes patient, long-term investing in concentrated holdings of undervalued, high-quality businesses. The fund's spotlight holding NVR Corp exemplifies this approach - a unique homebuilder that options rather than owns land, generating 21% CAGR over 10 years with 30%+ returns on incremental capital through market dominance and capital efficiency. |
| Apr 13 2023 | 2023 Q1 | ABG, KMX, LAD, TSLA | Auto Dealers, Consolidation, Electric Vehicles, Research, valuation | - | Right Tail researched car dealerships trading at attractive single-digit earnings multiples with strong historical returns and consolidation opportunities. Despite compelling return potential from companies like Lithia Motors, business model evolution concerns around direct manufacturer sales and electric vehicle transition prevent current investment. Research remains in investment library for future consideration as industry dynamics clarify. |
| Nov 1 2023 | 2022 Q4 | ROST | - | - | |
| Oct 10 2022 | 2022 Q3 | CSU CN | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIManager discusses how artificial intelligence is improving information gathering, processing, and synthesis for investment research. AI helps summarize large bodies of information, highlight inconsistencies across documents, and surface questions worth investigating further. However, AI is not a substitute for judgment and does not replace fundamental analysis, meeting management teams, or developing conviction. |
Technology Research Efficiency Tools Analysis |
CoalNRP is predominantly a coal royalty company with 65-75% of coal royalty revenue from metallurgical coal royalties. Manager likes the exposure to metallurgical coal as a key ingredient in making steel where limited new supply is being added. NRP has 25+ years of remaining reserves on metallurgical coal royalties and 70+ years on thermal coal royalties. |
Metallurgical Coal Royalties Steel Reserves Mining | |
RoyaltiesManager appreciates royalty companies as fantastic businesses that earn revenue from mining done on land they own. Royalty companies benefit from significant operating leverage when commodity volumes and prices increase as their minimal costs remain unchanged. With properly capitalized royalty companies, time is your friend as land ownership allows riding out difficult times. |
Mining Operating Leverage Land Ownership Cash Flow Duration | |
| 2025 Q4 |
AIManager acknowledges AI has driven majority of market returns over past 3 years but expresses uncertainty about sustainability. Notes circularity in AI business arrangements that rhyme with past investment bubbles. Does not know how long Nvidia's advantage will last or how to value normalized earnings. |
Artificial Intelligence Nvidia Valuations Bubbles |
ValueManager maintains focus on understandable, high-quality businesses with long-term mindset rather than chasing latest themes. Believes markets will eventually reward businesses with durable advantages, predictable earnings, and strong capital allocation. Sees latent value in many current holdings despite recent underperformance. |
Quality Undervalued Long-term Fundamentals | |
Large CapNotes S&P 500 has become increasingly concentrated with Magnificent 7 representing 35-40% of index, making it resemble concentrated large-cap growth index rather than diversified basket. Believes leadership inevitably changes over decades and expects this pattern to continue. |
Concentration S&P 500 Market Cap Leadership | |
| 2025 Q3 |
Auto AftermarketO'Reilly Auto Parts represents a compelling investment in the auto aftermarket sector, benefiting from aging car fleets, necessary product demand, and superior distribution capabilities. The company's balanced DIY/DIFM business model and cultural advantages create sustainable competitive moats that e-commerce cannot easily replicate. |
Auto Parts Distribution DIFM DIY Aftermarket |
QualityThe letter emphasizes investing in high-quality businesses that can reinvest cash flows at high returns, typically greater than 30% in O'Reilly's case. Quality companies with strong cultures and consistent execution often deliver superior long-term performance despite seemingly premium valuations. |
Reinvestment Culture Execution Returns Compounding | |
| 2025 Q2 |
QualityRight Tail focuses on owning high quality public companies with strong competitive advantages and returns on incremental capital for the long run. The manager emphasizes that 70% of the portfolio consists of companies held for the better part of 3 years, reflecting an outcome of owning high quality businesses that create value over time. |
Competitive Advantages Returns Long Term Value Creation Business Quality |
| 2025 Q1 |
QualityRight Tail focuses on investing in high-quality businesses with strong fundamentals that can compound wealth over multi-year periods. The manager emphasizes owning concentrated portfolios of undervalued, high-quality businesses that have the potential to double in five years. |
Quality Compounding Long-term |
ValueThe strategy involves identifying undervalued, high-quality businesses trading below their intrinsic worth. The manager seeks opportunities when markets are at their weakest, as these downturns create the best long-term investment opportunities. |
Undervalued Intrinsic Opportunities | |
| 2024 Q4 |
AIThe manager is studying artificial intelligence both for its potential impact on the world and ways to use it in investing processes. Google NotebookLM has been a positive discovery for uploading files and having them summarized into podcasts. |
Artificial Intelligence Technology Research |
| 2024 Q3 |
DistributionCDW and NSIT are technology resellers positioned between fragmented customer and vendor bases, creating value for all parties. CDW serves as an outsourced IT teammate for businesses with less than 5000 employees, selling over 100,000 products from over 1000 brands as a neutral third party. These distributors have superior financial characteristics with high incremental returns on capital. |
Technology B2B IT Solutions Resellers Fragmented Markets |
ValueThe manager focuses on owning a concentrated portfolio of undervalued, high-quality businesses with a longer-term mindset. NSIT was purchased at an attractive 10-12x P/E valuation in 2022. The companies have struggled to grow the last 2 years after tech spending ramped during Covid, creating potential value opportunities. |
Undervalued Quality Long-term Concentrated Valuation | |
| 2024 Q1 |
Auto AftermarketBoyd Group Services operates ~950 collision repair locations across US and Canada, generating 90% of revenue in the US. The fragmented collision repair industry continues to consolidate with larger players leading the charge, while 60-70% of locations remain single-store operations. Boyd provides significant value to insurance partners through Direct Repair Programs, with 90% of revenue involving insurance companies. |
Collision Repair Consolidation Insurance Fragmentation Auto |
| 2023 Q3 |
DistributionFerguson is a leading US distributor of plumbing and HVAC supplies with strong positioning in its value chain. The company benefits from having many suppliers and customers while providing great service and parts availability to guide customers to needed parts in a timely fashion. |
Distribution HVAC Plumbing Value Chain |
SoftwareConstellation Software buys and builds niche software businesses providing mission-critical solutions. The company has proven itself over 30 years with incredible growth and returns on capital, recently deploying significant capital in acquisitions including corporate carveouts. |
Software M&A Niche Mission Critical | |
| 2023 Q2 |
HomebuildersNVR Corp represents a unique homebuilder model that options land rather than owning it, leading to outsized returns and less risk. The company has dominant market share in select markets, excellent balance sheet, and has generated over 21% CAGR over the last 10 years with returns on incremental capital well north of 30%. |
Homebuilders Real Estate Construction Land Development Housing |
| 2023 Q1 |
Auto DealersManager conducted extensive research on car dealership industry, finding businesses trading at attractive mid to high single digit multiples versus historical 10-15x P/E. Companies like Lithia Motors have potential for significant returns if reaching 2025 earnings targets. However, concerns about business model evolution and manufacturer relationships prevent current investment. |
Auto Dealers Consolidation Franchise Electric Vehicles Digital |
Electric VehiclesDealerships face pressure to invest in electric vehicle infrastructure and repair capabilities as manufacturers transition. Tesla has circumvented franchise laws while Ford offers more direct buying experience for EVs. Larger, better-capitalized dealerships more likely to make necessary EV investments. |
Electric Vehicles Infrastructure Tesla Ford Franchise |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 7, 2026 | Fund Letters | Right Tail Capital | NRP | Natural Resource Partners L.P. | Thermal Coal | Coal & Consumable Fuels | Bull | New York Stock Exchange | Coal Royalties, Commodity Cycle, debt-free, Land Ownership, metallurgical coal, mineral rights, Publicly Traded Partnership, royalty company, Steel Production, Value | Login |
| Jan 5, 2026 | Fund Letters | Jeremy Kokemor | GOOG | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cloud, Regulation, Search | Login |
| Oct 5, 2025 | Fund Letters | Jeremy Kokemor | ORLY | O’Reilly Automotive Inc. | Consumer Discretionary | Specialty Retail | Bull | NASDAQ | Auto parts, compounding, Distribution, Margins, Reinvestment, retail | Login |
| Oct 1, 2024 | Fund Letters | Right Tail Capital | NSIT | Insight Enterprises | Information Technology | Technology Distributors | Bull | NASDAQ | activist investor, capital allocation, Cyclical Recovery, IT distribution, Microsoft partnership, turnaround, Value Investment, ValueAct | Login |
| Oct 1, 2024 | Fund Letters | Right Tail Capital | CDW | CDW Corp | Information Technology | Technology Distributors | Bull | NASDAQ | B2B Services, capital efficiency, Fragmented Market, IT Solutions, Mid-market, Outsourced IT, Technology Distributor, value-added services | Login |
| Apr 1, 2024 | Fund Letters | Right Tail Capital | BYD.TO | Boyd Group Services | Consumer Discretionary | Specialized Consumer Services | Bull | Toronto Stock Exchange | Automotive Services, Canada, capital allocation, Collision Repair, consolidation, defensive business, Direct Repair Programs, Fragmented Industry, Insurance Partners | Login |
| Jul 1, 2023 | Fund Letters | Right Tail Capital | CNVRG PM | NVR Corp | Consumer Discretionary | Homebuilding | Bull | NYSE | asset-light, capital efficiency, Consumer Discretionary, homebuilder, Housing, Land optioning, market share, Real Estate, vertical integration | Login |
| Oct 1, 2023 | Fund Letters | Right Tail Capital | FERG | Ferguson plc | Capital Goods | Trading Companies & Distributors | Bull | NYSE | defensive, Distributor, HVAC, market share, Plumbing, Pricing power, repair & remodel, Value chain | Login |
| Oct 1, 2023 | Fund Letters | Right Tail Capital | CSU.TO | Constellation Software Inc. | Information Technology | Systems Software | Bull | TSX | Canadian, capital allocation, customer retention, M&A, Mission-Critical, Niche markets, Software, vertical market | Login |
| TICKER | COMMENTARY |
|---|---|
| NRP | NRP is predominantly a coal royalty company owning 13M acres of mineral interests. In any given year, free cash flow is typically 80%+ from mineral royalties and up to 20% from their JV in a soda ash mining company. Of the coal royalty revenue, 65-75% typically come from metallurgical coal royalties with the remainder from thermal coal royalties. Based on my estimates, NRP has 25+ years of remaining reserves on its metallurgical coal royalties, and 70+ years of remaining reserves on its thermal coal royalties. The business trades at a high single digit multiple of normalized earnings. The market is saying we can only capitalize 8-10 years of earnings, yet we have 25+ years of reserves. The balance sheet has improved dramatically as the business has gone from ~$1.4B in debt 10 years ago to debt-free by the end of this year. With much less of the significant debt burden going forward, the company could produce $15-25 per share of free cash flow (pre-tax) in a more reasonable operating environment. At $20 of cash flow and a 10% dividend yield, we could be looking at a $200 stock vs. $125 today. At an 8% yield, we're talking $250 or a double from here. NRP is a high-quality business with a long reserve life that could potentially grow over time. The primary risks are a prolonged commodity downturn and poor capital allocation. Management owns roughly 30% of the units, which gives me confidence they care deeply about how capital is deployed. |
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