5 Best Defense Stocks to Buy That Are Too Cheap to Ignore

2. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)

Share Price as of October 13, 2022: $9.66

Number of Hedge Fund Holders: 20

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a government contractor that serves the needs of the Pentagon. The firm provides products and services such as satellite communications, turbine technologies, and rocket support services. It is headquartered in San Diego, California.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s latest earnings report saw the firm grow its revenue by $224 million and beat the earnings per share (EPS) guidance. Additionally, the firm’s management sees a huge opportunity pipeline of $9 billion. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) also manufactures some of the most advanced military drones in the world, with its XQ-58A Valkyrie drone currently under development being one of the few fully stealthy drones in the world.

The drone segment is crucial given the Pentagon’s over the horizon strategy that has gained prevalence under the Biden Administration. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) has also been on a contract winning spree this year, with the firm winning a $174 million contract from the U.S. Navy in September 2022.

By the end of this year’s second quarter, 20 out of the 895 hedge funds polled by Insider Monkey had held a stake in the company.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s largest investor is Catherine D. Wood’s ARK Investment Management which owns 8.2 million shares that are worth $118 million.