Is Rocket the Cyclical Stock for You?
Cyclical stocks tend to follow the various stages of the economic cycle. When the economy is expanding, unemployment is low, and spending is high, cyclical stocks tend to do well. On the other hand, when the economy slows and slips into a recession, these stocks tend to suffer. Industries that are considered cyclical are restaurants, airlines, and automobile manufacturers.
Rocket Companies (NYSE: RKT), which went public last year and is the largest mortgage originator in the U.S., is cyclical but follows a different schedule than your standard cyclical stock. Let's take a look at how Rocket works and if it's the cyclical stock for you.
Rocket is in the business of originating mortgage loans to people looking to buy a home or refinance an existing home loan. It does have other business segments like auto lending, but the majority of its business revolves around home mortgages.
Source Fool.com
