| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Right Tail Capital is operating in an idea-rich environment where many businesses are becoming more attractively valued across sectors. The manager has established a position in HCA Healthcare, the largest for-profit hospital operator in the United States with 190 hospitals and over 2,500 outpatient sites. HCA holds the number one or two market share position in approximately 80% of its markets, primarily in high-growth Sunbelt states like Florida and Texas. The company consistently generates attractive 20% EBITDA margins and has demonstrated resilience during economic downturns, maintaining high-teens margins in 2009 and only slight margin declines during COVID. Management has returned significant capital to shareholders, retiring roughly 50% of shares since 2011, often at reasonable valuations. The primary risk is healthcare reimbursement pressure from potential Medicaid funding reductions. However, HCA's superior margins, strong balance sheet, and operational efficiency position it to navigate reimbursement headwinds better than competitors. Trading at approximately 12 times earnings with expected earnings growth of 10-15% annually, HCA offers attractive return potential through both earnings growth and modest multiple expansion.
Right Tail Capital is capitalizing on an idea-rich market environment by establishing positions in high-quality businesses trading at reasonable valuations, exemplified by HCA Healthcare—a dominant hospital operator with resilient economics, shareholder-oriented management, and a long runway for value creation.
The manager remains optimistic about both the current portfolio and the pipeline of ideas being researched. The market is providing an idea-rich environment with many businesses becoming more attractively valued across a broad range of sectors.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 11 2026 | 2026 Q2 | HCA | healthcare, Hospitals, large cap, Quality, Sunbelt, value | HCA | Right Tail Capital established a position in HCA Healthcare, the largest US for-profit hospital operator with dominant market positions in high-growth Sunbelt markets. The company generates 20% EBITDA margins, has retired 50% of shares since 2011, and trades at 12x earnings with 10-15% expected annual earnings growth. Despite healthcare reimbursement risks, HCA's operational excellence and financial strength position it to outperform competitors. |
| 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 | - | - | |
| Jul 1 2022 | 2022 Q2 | FERG | Construction, Distribution, Quality, value, volatility | FERG | Right Tail Capital maintains a patient value approach during Q2 2022 market volatility, staying 60% invested across 12 quality companies. The fund spotlights Ferguson plc, a leading US distributor trading at 11x P/E with 30%+ returns on incremental capital, believing it could double in 3-5 years despite near-term construction headwinds. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
HospitalsManager establishes position in HCA Healthcare, the largest for-profit hospital operator in the US with 190 hospitals and 2,500+ outpatient sites. HCA holds #1 or #2 market share in ~80% of its markets, primarily in high-growth Sunbelt states. The company maintains ~20% EBITDA margins, has retired ~50% of shares since 2011, and is expected to grow earnings 10-15% annually. Manager views HCA as high-quality with durable competitive advantages, shareholder-oriented management, and resilient economics trading at ~12x earnings. |
Healthcare Hospitals HCA Sunbelt Market Share |
| 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 | |
| 2022 Q2 |
DistributionFerguson is a leading US-based distributor of plumbing and HVAC supplies with strong competitive positioning. The company benefits from fragmented suppliers, many customers, and small competitors, allowing it to provide superior service and parts availability. Ferguson has demonstrated excellent returns on incremental capital exceeding 30% and has grown US revenues 150% over 10 years. |
Industrial Distribution HVAC Plumbing Market Share |
ValueThe manager emphasizes finding great companies priced at a discount to intrinsic value. Ferguson trades at attractive multiples of 11x P/E and 9x EV/EBITDA compared to the S&P 500 at 16x P/E. The current volatile market is offering attractive long-term values for great companies, especially relative to recent years. |
Valuation Discount Intrinsic Value Multiples | |
QualityRight Tail focuses on companies with durable competitive advantages, high returns on incremental invested capital, and excellent management. Ferguson exemplifies these characteristics with its strong market position, superior economics, and ability to pass through price increases while maintaining customer relationships. |
Competitive Advantages Returns Management Durability |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 11, 2026 | Fund Letters | Right Tail Capital | HCA | HCA Healthcare | Medical Care Facilities | Health Care Facilities | Bull | New York Stock Exchange | capital allocation, defensive, EBITDA margins, Equity, Healthcare Facilities, Hospital Operator, Market Share Leader, network effects, Outpatient Services, Reimbursement Risk, Share Buybacks, Sunbelt Exposure | Login |
| 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 | 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 |
| 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 |
| 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 |
| Jul 1, 2022 | Fund Letters | Right Tail Capital | FERG | Ferguson plc | Industrial Distribution | Trading Companies & Distributors | Bull | New York Stock Exchange | construction, Cyclical, Distributor, HVAC, Industrial, Plumbing, spinoff, US, Value | 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 |
|---|---|
| HCA | HCA Healthcare (HCA). It is a high-quality hospital operator that combines dominant local market positions, outstanding operational execution, disciplined capital allocation, and resilient demand. It also trades at a reasonable valuation. The company is the largest for-profit hospital operator in the United States with 190 hospitals and more than 2,500 outpatient sites across 19 states and the U.K., serving 47 million patients annually. It generates more than $70 billion in annual revenue, has a market capitalization exceeding $100 billion, and has a long runway to compound value. The founding Frist family remains on the board and still owns ~30% of the stock. Today, it holds the #1 or #2 market share position (averaging 25-30% of each market) in ~80% of its markets, primarily in attractive Sunbelt states such as Florida and Texas where population growth remains well above the national average. HCA has strengthened its network by deliberately growing its outpatient services over time. While hospitals remain the core of the franchise, outpatient services now represent 38% of revenue and continue to grow faster than inpatient care. The company currently operates an ever-increasing number of outpatient access points for every hospital (14 per hospital) and ultimately expects that ratio can approach twenty-to-one. HCA's operational excellence is reflected in its financial performance. While for-profit hospitals account for only about one-quarter of U.S. hospitals, HCA consistently earns attractive EBITDA margins of ~20%. The company's excellent margins have proven resilient during tougher economic times. In 2009, the company maintained high teens margins. During covid, margins only declined slightly as the company was able to manage its variable costs to mostly offset its revenue decline. HCA is adept at turning industry problems into competitive advantages. Management's capital allocation has also impressed me. HCA has historically preferred to own the land beneath its hospitals, giving it greater flexibility to expand, modernize, and operate facilities without negotiating with landlords. The company also develops leaders internally, creating a deep bench of experienced operators across its hospital network. While reinvesting in the business is management's preferred use of capital, the company has also returned quite a bit of capital to shareholders through repurchases. Since coming public again in 2011, the company has retired ~50% of its shares outstanding often at a pretty reasonable valuation sometimes as low as 10x P/E. Healthcare reimbursement remains the primary risk. Potential reductions in Medicaid funding and efforts to curb fraud within the exchanges are likely headwinds over the coming years. That said, HCA is better positioned than most hospital operators. Its superior margins, strong balance sheet, and relentless focus on efficiency should allow it to navigate a more difficult reimbursement environment better than weaker competitors. As I've found with other great businesses, periods of industry stress often strengthen the competitive position of the best operators. It's also not easy to start a hospital company from scratch. Because HCA operates from a position of financial strength while delivering high-quality care, it is likely to continue taking market share regardless of modest reimbursement changes. As a tertiary benefit, HCA also provides diversification to our portfolio. Healthcare has been one of the weaker-performing sectors in recent years, and demand for hospital care is considerably less sensitive to economic cycles than many industries. Looking ahead, HCA can grow revenue in the mid-single digits annually through a combination of pricing and volume growth. Given the company's operating leverage, disciplined capital allocation, and continued share repurchases, earnings should grow meaningfully faster (10-15% most years). Historically, HCA has exceeded those expectations, compounding revenue at roughly 7% annually while growing earnings per share closer to 17%. Purchasing a business of this quality at approximately 12 times earnings provides the potential for attractive returns through both earnings growth and modest multiple expansion. While no investment is without risk, HCA possesses many of the characteristics we seek at Right Tail: a durable competitive advantage, shareholder-oriented management, resilient economics, and a long runway for value creation. |
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