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.”

A picturesque sunset view of the Graton Resort & Casino, with patrons gambling in the background.

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 risk and potential of Red Rock Resorts, Inc. (NASDAQ:RRR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Red Rock Resorts, Inc. (NASDAQ:RRR) and that has 10,000% upside potential, check out our report about this cheapest 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.