Right Tail Capital, an investment management company, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. The firm focuses on generating sustainable long-term returns. Also, it relies on underlying investments to allocate capital wisely and create shareholder value over time. Patience is a key factor that will be rewarded in several ways. The fund owns a concentrated portfolio of undervalued, high-quality businesses and invests with a longer-term mindset. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Right Tail Capital highlighted stocks like NVR, Inc. (NYSE:NVR) in the second quarter 2023 investor letter. Headquartered in Reston, Virginia, NVR, Inc. (NYSE:NVR) is a home builder. On July 14, 2023, NVR, Inc. (NYSE:NVR) stock closed at $6,396.55 per share. One-month return of NVR, Inc. (NYSE:NVR) was 6.78%, and its shares gained 46.59% of their value over the last 52 weeks. NVR, Inc. (NYSE:NVR) has a market capitalization of $20.769 billion.
Right Tail Capital made the following comment about NVR, Inc. (NYSE:NVR) in its second quarter 2023 investor letter:
“One investment where I’ve been a patient long term holder over much of the past 5 years has been NVR, Inc. (NYSE:NVR).
NVR is one of the largest homebuilders in the US, operating in over 30 markets. There are several attributes that are underappreciated about NVR. First and foremost, it’s not your normal land-owning homebuilder: NVR options their land which leads to outsized returns and less risk by having less capital tied up in land. Many homebuilders cite the positives of owning land such as more control over the entire building process and higher margins.
NVR mitigates the lack of control inherent in their option strategy by working extremely closely with local land developers. These partners appreciate NVR’s trustworthiness, pristine balance sheet and quick turnarounds. As one developer tells me, “They do what they say they’ll do and they honor their commitments to buy a set number of lots.” While owning land may lead to higher margins during most economic times, it takes up much capital and is incredibly illiquid. It’s also likely worth much less during tougher economic times…exactly when you might want to have more cash on hand…” (Click here to read the full text)
Copyright: Kurhan / 123RF Stock Photo
NVR, Inc. (NYSE:NVR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held NVR, Inc. (NYSE:NVR) at the end of first quarter which was 39 in the previous quarter.
We discussed NVR, Inc. (NYSE:NVR) in another article and shared the list of best residential real estate stocks to buy. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
