Why Rocket Companies (RKT) Stock is a Compelling Investment Case

Miller Value Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The Opportunity Equity Fund posted a return of 13.01% for the quarter (net of fees), outperforming its benchmark, the S&P 500 Index which returned 8.93% in the same quarter. You should check out Miller Value Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Miller Value Partners highlighted a few stocks and Rocket Companies Inc. (NYSE:RKT) is one of them. Rocket Companies Inc. (NYSE:RKT) provides industry-leading real estate, mortgage and financial services. Rocket Companies Inc. (NYSE:RKT) stock lost 15.4% in the last one month and on October 30th it had a closing price of $18.23. Here is what Miller Value Partners said:

“Rocket Companies came public in the quarter at $18 per share, before rallying to $34 then trading back down to $20. We entered on the pullback. Rocket is an amazing company with a fabulously successful history and culture. It dominates online mortgage originations. We believe its technology platform and culture provide a unique competitive advantage that will allow it to grow market share, earnings and cash flow over time. The mortgage market is volatile and refi’s are likely to peak this year, which will cause volatility in earnings and potentially the stock. But we believe that taking the long view will pay off. We think that we are getting a great deal paying 14x next year’s earnings for a dominant leader with serious long-term compounding potential.”

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Our calculations showed that Rocket Companies Inc. (NYSE:RKT) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.