DD - HUGE Buying Opportunity with RKT down 7% AH - Betting $1.3M on it...

PennyMac Financial Services (PFSI), a large mortgage lender/servicer, reported a HUGE EPS miss AH, and their stock is down \~20% because of it.

Retail is ALSO dumping other "mortgage" related stocks, including the market leader, RKT (down about 7% AH).

BUT, they are throwing the Baby/Golden Goose out with the bathwater. WHY?

BECAUSE I LISTENED TO THEIR (Their = PFSI) EARNINGS CALL...

[https://events.q4inc.com/attendee/286536573/guest](https://events.q4inc.com/attendee/286536573/guest)

As rates came down, the drawdown on their MSR portfolio didn't keep up with the drawdown vs recapture (ie, refinancing their OWN current customers into new lower rate mortgages).

They (PFSI) are only JUST NOW investing in a AI driven platform, to get their recapture rate up. (RKT's been investing for years in AI, and have the industry leading, like 90%, recapture rate).

In other words, PennyMac is losing customers, and SOMEONE is recapturing them. Don't take my word for it, LISTEN TO THE EARNINGS CALL.

I bet RKT is taking business from them.

Trump is also going to be announcing the new Fed Chair tomorrow (moved up from next week), who will be pushing lower rates in the months to come.

TLDR: PFSI missed, and is down \~20%+ AH. RKT's being "sold off" along with every other mortgage stock.

BUT PFSI missed because they sucked on "recapture" of their own customers, as rates came down and their own customers ReFi'ed. SOMEONE IS TAKING BUSINESS FROM THEM.....

RKT has the industry's HIGHEST "Recapture Rate" (90%+), and acquired Redfin & Mr. Cooper to become the US's largest direct Mortgage Servicer and Originator. RKT is simply NOT going to have the same issue that PFSI had.

My RKT holdings, which were at $23+ worth $1.4M are now worth $1.2M. I'm buying FEB CALLS tomorrow, as RKT earnings are due in a few weeks, and the Fed announcement is going to boost all good financial stocks.