20 Undervalued Momentum Stocks That Are Taking Off

9. Mr. Cooper Group Inc. (NASDAQ:COOP)

3-Month Price Change: 40.8%

Forward PE: 10.9

Number of Hedge Fund Holders: 43

Mr. Cooper Group Inc. (NASDAQ:COOP) is one of the 20 undervalued momentum stocks that are taking off. On June 9, Mr. Cooper Group reported that its proposed merger with Rocket Companies Inc. (NYSE:RKT) has progressed further with the expiration of the waiting period under the respective regulatory act on June 4, 2025. As such, this development satisfied a key regulatory condition required for closing the deal, and thus the companies can progress towards finalizing the transaction.

That said, the companies are still awaiting other necessary approvals, including shareholder consent and additional regulatory clearances. However, management has reiterated its expectation that the deal will close in the fourth quarter of 2025.

The transaction, first announced on March 31, 2025, involves an all-stock merger in which Mr. Cooper shareholders will receive 11 Rocket shares for each share they hold. At the time of the announcement, this implied an equity value of $9.4 billion for Mr. Cooper, reflecting a 35% premium over its 30-day average price. Once completed, Rocket shareholders will own approximately 75% of the combined entity, with Mr. Cooper shareholders holding the remaining 25%.

Managements on both sides are upbeat as they are about to form the strongest mortgage company in the industry. The deal combines Rocket’s origination scale and technology with Mr. Cooper’s industry-leading servicing platform. Together, the merged company will service more than $2.1 trillion in loans across nearly 10 million clients, roughly one in every six mortgages in the country. The companies estimate $500 million in annual run-rate synergies from operational efficiencies and revenue enhancements.

Mr. Cooper Group Inc. (NASDAQ:COOP) is the largest home loan servicer in the U.S., focused on delivering a variety of servicing and lending products, services, and technologies. It provides customer-centric servicing, origination, and transaction-based services related principally to single-family residences throughout the country.