What Makes Rocket Companies (RKT) a Lucrative Investment?

Third Point Management, a New York-based investment advisor, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Third Point Offshore Fund returned nearly -7.5% in the second quarter of 2025. The second quarter started with “Liberation Day,” which spooked markets. By the end of the quarter, the sentiment shifted positively, and markets rebounded. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Third Point Management highlighted stocks such as Rocket Companies, Inc. (NYSE:RKT). Rocket Companies, Inc. (NYSE:RKT) is a fintech holding company that offers mortgage lending, title and settlement services, and other financial technology services. The one-month return of Rocket Companies, Inc. (NYSE:RKT) was 16.15%, and its shares lost 4.12% of their value over the last 52 weeks. On August 1, 2025, Rocket Companies, Inc. (NYSE:RKT) stock closed at $16.54 per share, with a market capitalization of $34.911 billion.

Third Point Management stated the following regarding Rocket Companies, Inc. (NYSE:RKT) in its second quarter 2025 investor letter:

"We initiated a position in Rocket Companies, Inc. (NYSE:RKT) during the Second Quarter based on its transformative all-stock acquisition of Mr. Cooper. Rocket has been a persistent share gainer in the fragmented mortgage origination industry, with a 12% market share of refi originations and a 4% share of purchase originations. It has differentiated, industry-leading cost and time to originate, driven by its continuous reinvestment in technology and automation. While the average originator takes 45 days to close a refi loan, Rocket only takes 20 days – and that key metric continues to fall. In fact, over 50% of loans now close in less than 15 days.

Mr. Cooper is the leading mortgage servicer, with 11% market share, making it over 50% larger than its next largest competitor. Much like Rocket in the origination space, Mr. Cooper has industry-leading cost-to-service that has fallen by ~50% over the last five years. These differentiated unit economics have allowed Mr. Cooper to be a primary beneficiary of MSR sales by cash-poor, subscale originators struggling to keep afloat in the current high-rate environment..." (Click here to read the full text)

Rocket Companies, Inc. (NYSE:RKT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Rocket Companies, Inc. (NYSE:RKT) at the end of the first quarter which was 30 in the previous quarter. While we acknowledge the potential of Rocket Companies, Inc. (NYSE:RKT) 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 Rocket Companies, Inc. (NYSE:RKT) and shared the list of resilient stocks defying market sentiment. 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.