Sept Idea Comp - Rocket Companies $RKT
Interest rates for mortgages are above 6%. Mortgage demand falls to a new 22-year low, according to Forbes. Home sales dropped 19% in July.
Why would anyone be buying shares of mortgage companies when this is the current environment of the real estate market?
Interestingly, it's the insiders of $RKT that are buying the dip. And in this memo, I will explain the possible reasons why insiders are bullish on Rocket and why this company is a great investment.
First, Rocket's business structure has been starting to look more like a bank than an internet startup.
Over the past few years, Rocket has been filling its balance sheets with mortgages that it originates. Before, it would sell its mortgages to Fannie Mae or Freddie Mac for securitization. Now, it's starting to hold onto those loans and reaping the cash flow from it.
And with mortgage payments surging throughout 2022, Rocket is seeing its inflation skyrocket along with it.

Insiders know that with surging mortgage payments, $RKT will have a lower impact on its revenues. Loan origination volume is down but at least the loans that they originate and hold will provide them with cash flow during these hard times.
Another thing is that Rocket is leading the consolidation of the home mortgage industry. The home mortgage industry is highly fragmented with many mom-and-pop shops. As Rocket gains more market share, the company will see higher profits overall and have more power over its industry.

In this slide, we can see that Rocket Mortgage has less than 10% of the mortgage market. When compared to other companies like $SCHW $AMZN $INTU and $BKNG, all who lead the consolidation of their own industries, Rocket could reap a similar level of fortune as those other companies if it can gain a similar percentage of market share as those industry leaders.

And based on the growth of Rocket's market share in the mortgage market, I am confident that the company can reach its targeted threshold of above 20% market share.
When a company gains market share, if they're not efficient, then it can lose its gains to a competitor that's more efficient. According to Rocket, they're way more efficient than the average mortgage company. As their loan volumes have grown over the past several years, they've shown success in scaling their business. This is proven by the number of loans per production team member per month metric (below).

Outside of mortgages, Rocket has a personal finance app that they obtained through its acquisition of Truebill. The best part about this business is that its annual recurring revenue (ARR) is over $100 million. Like the mortgages it holds, Rocket's premium membership plan for its personal finance app is also bringing more recurring revenue to the business. Investors love recurring revenue business whether times are good or bad.

Rocket has other business lines too, like providing auto and solar loans. There are many cross-selling opportunities for the company. While most of these non-mortgage businesses are small, over time, they will grow into something bigger.

But for now, let's appreciate that Rocket owns the entire home buying process. More money comes to them and little to no money goes to third parties when people buy a home through Rocket.

In sum, I believe that the:
  • large and consistent cluster insider buying
  • gains in market share
  • high efficiency
  • management's efforts to diversify revenues outside of mortgage origination
  • loans on Rocket's books
Rocket will create immense value for investors. While times are tough for the real estate market, Rocket has a strong balance sheet (current ratio of 5.03) that can help the company weather the tough times.
It's possible that Rocket will capitalize on these tough times to acquire its competitors at a lower price and acquire more market share from there. A contrarian move like that could be another reason why insiders continue to buy every dip in this stock.

Or maybe insiders simply like buying a great business at a great price.
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Had my last mortgage through Rocket. Great customer service and strong presence in the Detroit & the Cleveland area (where we lived). Adding to my watchlist.
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Leon's avatar
$18m follower assets
Portfolio end of August '22 (descending order)
Epsilon Net Group $EPSIL
Secunet Security Networks $YSN.DE
Evolution $EVVTY
Leatt $LEAT
Kaspi $KSPI
Amazon $AMZN
Meta $META
Clearvise $ABO.F (New)
Google $GOOG
Grodno $GRN.WA
Media and Games Invest $MDGIF
Centrotec $CEV.HM
Digital Turbine $APPS
Booking $BKNG
Steico $ST5.DE
Passus $PAS.WA
Unity $U
Kambi $KAMBI
Mynaric $MYNA
Tencent $TCEHY
Nvidia $NVDA
Alibaba $BABA
Adobe $ADBE
Sea $SE
Spotify $SPOT
Monster Beverage $MNST

Sold: Tremor $TRMR

Ethereum $ETH.X
Bitcoin $BTC.X
Litecoin $LTC.X
Enjin $ENJ.X
Bitcoin Cash $BCH.X
Cardano $ADA
Polkadot $DOT
Yield Guild Games $YGG

+wikifolio Zukunftsbranchen
Nice collection of under-the-radar international stocks here, plus a few more familiar ones too ($U, $GOOG, etc...) I went to give you a follow but realized I already am! ;) I notice you're in Germany. How easy/difficult do you find access to all the international exchanges? How are the fees for international trading?
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StockOpine's avatar
$41.3m follower assets
Highlights from Booking Holdings $BKNG Q2'2022

Source: Booking Holdings 10-Q reports, Booking Holdings Q2’22 Earnings release, StockOpine analysis


Alternative accommodation room nights grew by 25% compared to Q2 2019. The global mix of alternative accommodation room nights was about 32% which is in line with Q2 2021 and higher than Q2 2019.

David Goulden, CFO “Within Europe, our mixed alternative accommodations continues to be meaningfully higher than the global average. In North America, our mix of alternative accommodations remains low relative to global average. However, we did see an encouraging increase in mix versus Q2 2021 in that region.”

Glenn Fogel, CEO, “In the second quarter, we saw the largest sequential net increase in alternative accommodation properties since 2019 and we now have 6.6 million alternative accommodation listings on Booking .com.”

It should be also noted that $ABNB reported over 6 million of active listings in Q2 2022.


40% of the room nights were booked through the Company’s apps in Q2 2022 which is consistent with Q2 2021 and about 10 percentage points higher than in 2019.

Glenn Fogel, CEO “Booking. com's app continued to set new records in terms of monthly active users in Q2 and remains the number-one downloaded OTA app globally according to a third-party research firm.”


Connected trip refers to the Company’s long-term strategy to build a more integrated offering of multiple elements of travel connected by a payment platform.

Glenn Fogel, CEO on payments, “38% of Booking. com's gross bookings were processed through our payment platform in the second quarter, which is our highest quarterly level ever”.

Increasing payments through the platform improves working capital cycle of the business, however it drives operating margins lower (merchant revenues have lower margins than agency revenue). In addition, non-accommodation services (i.e. flights) which are part of the Company’s Connected Trip vision have lower margins and can also negatively affect future operating margins.

However increased payments through the platform are a net benefit to the business as they add incremental EBITDA dollars.


As of 30 June 2022, Booking .com had over 2.5 million properties on its website (400,000 hotels, motels, and resorts and over 2.1 million alternative accommodation properties), representing an increase from approximately 2.4 million properties as at 30 June 2021.

The year-over-year increase in total properties was driven by an increase in alternative accommodation properties.

You can read the full earnings preview for Q2 2022 in our substack.
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Crazy that $BKNG has already a similar amount of alternative accomodation like $ABNB. Here in Europe i also can find a lot of accomodations on both platforms
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Conor's avatar
$20.9m follower assets
$ABNB Host or Guest? Win Win
I am doing a semi-deep dive on Airbnb and it's taking up quite a bit of my time. It seems like a newer business model (established in 2008), however, they already have very strong competitors.

I'm going to be researching Airbnb, $BKNG Booking, and $EXPE Expedia Group as somewhat similar comparisons.

Quick question to my CS followers, who is Airbnb better for in the long run? Is Airbnb a win for the hosts who are either doing a "house hack" or receiving passive income? Is Airbnb a win for the guests who are going on vacation or working remotely?

What if you live in a neighborhood with a ton of Airbnb rentals? Would you even know? Would it be annoying?

What about first-time home purchasers who are priced out of the market due to the shortage of housing supply? Is that a symptom of Airbnb or an entirely separate issue?

Finally, the most optimistic point of view is, could Airbnb be a win-win for everyone? A win for the host making passive income, a win for the guest needing somewhere to stay, and a win for a first-time house purchaser who could rent out a bedroom in order to afford their new home?

I would love to hear everyone's opinions on this. I should have a more detailed analysis soon.

P.S. if you are wondering why I didn't mention one financial metric in this post, it's because investing isn't about P/E, Free Cash Flow, Current Ratio, Debt to Equity Ratio, or whatever financial metric you want to use. It's not about doing a discounted cash flow analysis to pretend you can predict a company's cash flow in the next 5 years.

Investing is about finding outstanding companies, buying shares through good times and bad, and holding for the long-term. Simple as that. Don't overcomplicate it.
It’s quite easy to see your competition in your local area, simply writing in your suburb and looking around on the map. You can see what’s around, what you get for your money or anything you could improve.

I don’t think we have the same housing issues in cities here in Australia because of Airbnb, as compared to the US from what I’ve read / heard.
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StockOpine's avatar
$41.3m follower assets
$BKNG and $ABNB Q2’22

  • $ABNB up 24% Vs Q2’2019
  • $BKNG up 16% Vs Q2’2019


  • $ABNB up 73% Vs Q2’2019
  • $BKNG up 38% Vs Q2’2019


  • $ABNB up 40% Vs Q2’2019
  • $BKNG up 19% Vs Q2’2019
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Is there any metric that allows for comparisons between the two whilst removing the variable of size? For instance, Booking may have more rooms booked but I am unaware of how many total rooms they have (capacity) vs Airbnb.
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StockOpine's avatar
$41.3m follower assets
$BKNG Q2 headlines
  • Revenue $4.3B, ⬆️ 99% and 116% on constant currency basis

  • Gross bookings $34.5B, ⬆️ 57% and ⬆️ 73% on constant currency basis

  • 246M room nights booked, ⬆️ 56%

  • Adjusted EBITDA $1.1B, (25.3% Adjusted EBITDA margin)
  • Diluted EPS $21,07 Vs ($4.08) last year
Leon's avatar
$18m follower assets
Booking Holdings Q2 '22 results $BKNG
▫️Revenue +99%
▫️Gross Bookings +38%
▫️Travel services booked +57%
▫️Room nights booked +56%, surpassing 2019 levels
▫️Adjusted EBITDA of $1.1 billion vs. $48 million
▫️Net income of $857 million (vs -167 millon)
▫️EPS of $21.15 vs -4.08

🏆 Announcing the winners of the "Buy the Dip" Idea Contest
Thank you to all the participants of July's "Buy the Dip" idea contest!

Final results:
#3) @dividenddollars — Activision Blizzard $ATVI
#4) @stonkmetal — RCI Hospitality Holdings $RICK
#5) @paulcerro — Xponential Fitness $XPOF

The winners of the most upvoted comments are:

Congratulations to all the winners and thanks again for everyone who participated!

Shoutout to our amazing judges:
Brian Stoffel @brianstoffel
Nikki Dunn @shetalksfinance
Jennifer Shaigec @jennymanydots
Alex Morris @tsoh_investing
David McDonough @mcd

Winners will be contacted this week to coordinate next steps
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