![]() Davis Financial Fund nearly doubled its position in Rocket Companies in 2022 at much lower prices. To us this seems like a case where everyone knows that the sector is facing challenges, but not everyone acknowledges what is priced into the stock. But the company’s stock price declined by more than half over this period. Rocket will earn little if any money in 2022, and profits in 2023 likely will again be meager. ![]() Rocket, which continues to be controlled by its founder Dan Gilbert, had built a digitally driven platform in an otherwise labor-intensive industry, which we believe is an enduring source of competitive advantage.Īs long-term interest rates began to rise in late 2021, the wave of refinancing volumes began to slow, and in 2022 they fell off a cliff. While the then-high level of profitability certainly influenced the math of valuation, by no means was it the whole story, as it was anticipated that origination volumes would be cyclical. The country was in the middle of a massive refinancing boom, and as the leading mortgage originator, Rocket was earning approximately $3 billion per quarter (pretax). (NYSE:RKT), on its initial public offering in the summer of 2020. “We first purchased a small position in residential mortgage lender, Rocket Companies, Inc. (NYSE:RKT) in its 2022 annual investor letter: (NYSE:RKT) has a market capitalization of $16.018 billion.ĭavis Financial Fund made the following comment about Rocket Companies, Inc. (NYSE:RKT) was -9.13%, and its shares lost 22.13% of their value over the last 52 weeks. One-month return of Rocket Companies, Inc. (NYSE:RKT) stock closed at $8.06 per share. On March 10, 2023, Rocket Companies, Inc. Headquartered in Detroit, Michigan, Rocket Companies, Inc. (NYSE: RKT) in its 2022 annual investor letter. ![]() In addition, please check the fund’s top five holdings to know its best picks in 2022.ĭavis Financial Fund highlighted stocks like Rocket Companies, Inc. bank and consumer-lending holdings detracted from the performance. Investments in property and casualty (P&C) insurance, foreign banks, and Berkshire Hathaway were the primary contributors while U.S. In 2022, the fund declined −8.91% slightly outperforming the S&P 500 Financials Index which returned −10.53%. A copy of the same can be downloaded here. On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.Investment management firm, Davis Advisers, released its “Davis Financial Fund” 2022 annual investor letter. Indeed, today’s price action with RKLB stock seems to indicate most investors feel this way. ![]() When insiders sell after a big surge, an implicit signal is sent that perhaps this stock is overvalued. Retail investors operating with less information than insiders don’t want to be left holding the bag. Insiders are privy to material non-public information, and, as such, when they make big transactions (such as a $20 million stock sale), investors have to ask which way is up. That said, the size and prominence of this transaction, as well as its timing (coinciding with a recent surge in RKLB stock) clearly has some investors concerned. Thus, with the intent or rationale unclear, the market as a whole often has difficulty digesting what to make of many insider sales. Executives often want to offload some shares to diversify their holdings, add another vacation home or simply bolster their personal balance sheets. In many cases, the market will often brush off insider transactions (even insider sales). Investor responses to insider transactions can vary. RKLB Stock Sinks on Insider Selling Activity Let’s dive into what this means for investors and why this is causing such a drop for Rocket Lab today. This sale would amount to a little less than $20 million at current prices, though it’s unclear what price the proposed sale will ultimately close at. News that Rocket Lab’s founder, Peter Beck, has reportedly filed to sell 3.6 million shares has investors in selling mode today. Investors priced in a key headline that is creating most of the consternation around this stock today. In early afternoon trading, RKLB stock plunged 9%. In today’s market, Rocket Lab (NASDAQ: RKLB) is among the top declining stocks on watch for a number of investors.
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