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Insider Buying Says Travelport (TVPT), Yext (YEXT), and Kratos (KTOS) Are Undervalued

The global markets are opening to fear and trepidation this morning after they were rocked at the end of last week by the prospect of a trade war between the world’s two biggest economies, the U.S and China.

When the markets are churning and stocks are falling, company insiders often use the turmoil to buy some shares at what they believe is a discount. Such buying took place among the insider ranks of Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), Travelport Worldwide Ltd (NYSE:TVPT), and Yext Inc (NYSE:YEXT) last week. We’ll look at those transactions and the state of these stocks in this article.

At Insider Monkey, we track insider trading and hedge fund activity to uncover actionable patterns and profit from them. We track over 600 of the most successful hedge funds ever in our database and identify only their best stock picks. Our newest quarterly stock picks were released last month, which investors can gain access to by becoming a subscriber to Insider Monkey’s premium newsletters.

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

Who Bought Shares: President, TTS Division Phillip Carrai

How Many Shares Were Bought: 4,000 @ $9.45 per share

Date of the Transaction(s): March 19

Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS) Insiders Have Been Active: In addition to the above insider purchase which took place last Monday, three other Kratos insiders have purchased shares in March. Directors Scot Jarvis (10,000 shares purchased in three separate transactions), Amy Zegart (3,205 shares) and Jane Judd (1,100 shares) have all purchased Kratos shares within the past month.

Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS) Shares Shot Down by Short Report: The intensified insider buying during March comes on the heels of a rapidly declining stock, which has lost nearly 30% of its value since mid-February. Spruce Point piled onto the stock on March 16, issuing a report that claimed Kratos management has destroyed “tremendous value” and suggesting the stock has 40% to 70% downside risk.

Kratos deemed the report to be “factually incorrect” last Monday, while Canaccord Genuity analyst Ken Herbert described the further pullback resulting from it as a buying opportunity, stating that the short report contained numerous old data points and didn’t address the Department of Defense’s growing investment in unmanned vehicles. A day later, it was revealed that President Trump is planning to make it easier for the U.S to export lethal drones to its allies, which should further benefit Kratos and other American drone makers.

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On the next page we’ll look at two other stocks that insider buying indicates as being undervalued.