Right Tail Capital Sold Norfolk Southern Corporation (NSC) for Better Opportunities

Right Tail Capital, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Right Tail aims to generate high after-tax returns by investing in high-quality public companies for the long term. The letter discussed the three-year journey of Right Tail Capital since its inception. The firm has grown from approximately $3 million in AUM initially to about $27 million today. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Right Tail Capital highlighted stocks such as Norfolk Southern Corporation (NYSE:NSC). Headquartered in Atlanta, Georgia, Norfolk Southern Corporation (NYSE:NSC) engages in the rail transportation of raw materials, intermediate products, and finished goods. The one-month return of Norfolk Southern Corporation (NYSE:NSC) was 3.41%, and its shares gained 17.70% of their value over the last 52 weeks. On July 9, 2025, Norfolk Southern Corporation (NYSE:NSC) stock closed at $260.04 per share, with a market capitalization of $58.624 billion.

Right Tail Capital stated the following regarding Norfolk Southern Corporation (NYSE:NSC) in its second quarter 2025 investor letter:

"Norfolk Southern Corporation (NYSE:NSC) (NSC; exited early 2024). I originally purchased NSC in late 2022. I think the North American rails are irreplaceable assets and had the potential to be run more efficiently over time and perhaps earn the right to move greater volumes. Over time, I did not get the sense that this business was well operated or that returns on incremental capital would improve. I saw better opportunities elsewhere and decided to move on."

Norfolk Southern Corporation (NYSE:NSC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held Norfolk Southern Corporation (NYSE:NSC) at the end of the first quarter, compared to 63 in the previous quarter. While we acknowledge the potential of NSC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Norfolk Southern Corporation (NYSE:NSC) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q2 2025 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.