Red Rock Resorts (RRR) Demonstrated Its Resilient Business Model in Q2

Diamond Hill Capital, an investment management company, released its “Small-Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q2, the market surged uniformly for the rest of the quarter following a sharp decline in April due to President Trump’s “Liberation Day” tariffs announcement. The portfolio returned 5.60% (gross) and 5.37% (net) compared to an 8.59% return for the Russell 2500 Index. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Diamond Hill Small-Mid Cap Fund highlighted stocks such as Red Rock Resorts, Inc. (NASDAQ:RRR). Headquartered in Las Vegas, Nevada, Red Rock Resorts, Inc. (NASDAQ:RRR) develops and operates casino and entertainment properties. One-month return of Red Rock Resorts, Inc. (NASDAQ:RRR) was 4.01%, and its shares gained 5.97% of their value over the last 52 weeks. On August 11, 2025, Red Rock Resorts, Inc. (NASDAQ:RRR) stock closed at $57.13 per share, with a market capitalization of $5.853 billion.

Diamond Hill Small-Mid Cap Fund  stated the following regarding Red Rock Resorts, Inc. (NASDAQ:RRR) in its second quarter 2025 investor letter:

"On an individual holdings’ basis, top contributors to return in Q2 included Red Rock Resorts and WESCO. Red Rock Resorts, Inc. (NASDAQ:RRR), a casino operator controlling over half the Las Vegas locals market, has demonstrated the resilience of its business model via a strong start to the year. Coming into Q2, the valuation was attractive — and investors responded accordingly, giving a boost to shares."

Red Rock Resorts, Inc. (NASDAQ:RRR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Red Rock Resorts, Inc. (NASDAQ:RRR) at the end of the first quarter, which was 25 in the previous quarter. While we acknowledge the potential of Red Rock Resorts, Inc. (NASDAQ:RRR) 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 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.