Here’s Why Rocket Companies (RKT) Slipped in Q4

Diamond Hill Capital, an investment management company, released its “Small Cap Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fourth quarter posted another period of favorable gains for equity markets, with the Russell 2000 Index returning 2.19%, roughly in line with the Russell 1000 Index’s 2.41% gain. Health care (+18.6%) emerged as the best-performing sector in the Russell 2000 Index. Heightened uncertainty and geopolitical risks contributed to a mixed market environment in 2025 and Q4, yet the Russell 2000 Index still posted a 12.81% gain for the year. Heading into 2026, the firm continues to focus on resilient businesses that can sustain earnings in a volatile landscape. The Strategy returned 4.88% (net of fees) in the quarter compared to the Russell 2000 Index’s 2.19% gain. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Diamond Hill Small Cap Strategy highlighted Rocket Companies, Inc. (NYSE:RKT) as one of the leading detractors. Rocket Companies, Inc. (NYSE:RKT) is a financial services company that offers mortgage, real estate, and personal finance services. On February 4, 2026, Rocket Companies, Inc. (NYSE:RKT) stock closed at $20.00 per share. Rocket Companies, Inc. (NYSE:RKT) delivered a -5.84% return in the past month, and its shares are up 51.75% over the past twelve months. Rocket Companies, Inc. (NYSE:RKT) has a market capitalization of $56.318 billion.

Diamond Hill Small Cap Strategy stated the following regarding Rocket Companies, Inc. (NYSE:RKT) in its fourth quarter 2025 investor letter:

“Rocket Companies, Inc. (NYSE:RKT), a fully integrated mortgage provider which we received shares of following the recent closing of its acquisition of Mr. Cooper, underperformed due to evolving market expectations surrounding the path of interest rates, which is key driver of its mortgage originations business.

Rocket Companies, following its 2025 acquisition of Mr. Cooper, became a combined company with a market capitalization exceeding $50 billion. As a result, the position moved well beyond our small-cap mandate, and we exited the position.”

In another article, we covered Rocket Companies, Inc. (NYSE:RKT) and shared the list of best stocks under $25 to buy. In addition, please check out our hedge fund investor letters Q4 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.