Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS): The Best-Of-Breed For Investing?


Fidelity Management & Research Co. recently announced the acquisition of new stake in Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS). The institutional investor has increased its shareholding in the Industrials company by 8.58% to 9.17 million shares with purchase of 0.72 million shares. This fresh investment now brings its stake to 7.49% valued currently at $143.32 million. In addition, The Vanguard Group, Inc. raised its holdings by 66644.0 to 6.84 million shares. And Stephens Investment Management Gr. has lifted its position by 22.81% or 0.67 million shares – to 3.58 million shares.

With over 2.04 million Kratos Defense & Security Solutions Inc. (KTOS) shares trading Friday and a closing price of $18.45 on the day, the dollar volume was approximately $37.67 million. The shares have shown a positive weekly performance of 21.55% and its price on 07/24/20 lost nearly -4.87%. Currently, there are 107.20M common shares owned by the public and among those 104.98M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 10 analysts who have offered their price forecasts for KTOS have a consensus price objective of $21.70. The analysts have set the share’s price value over the next 12 months at a high of $26.00 and a low of $17.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Kratos Defense & Security Solutions Inc. stock is 1.70 for the next 12 months. The average price target is 13.05% above its last price level and an upside to the estimated low will see the stock lose -8.53% over that period. But an upside of 29.04% will see the stock hit the forecast high price target while mean target price for the stock is $21.50.

Insiders at the company have transacted a total of 109 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 36 of these insider trades were purchases, accounting for 727,856 shares. Insider sales of the common stock occurred on 73 occasions, with total insider shares sold totaling 13,612,437 shares.

The top 3 mutual fund holders in Kratos Defense & Security Solutions Inc. are Fidelity Select Defense & Aerospa, Vanguard Total Stock Market Index, and American Funds Small Cap World Fu. Fidelity Select Defense & Aerospa owns 3.5 million shares of the company’s stock, all valued at over $54.7 million. Vanguard Total Stock Market Index bought 0.57 million shares to see its total holdings expand to 3.45 million shares valued at over $53.89 million and representing 2.81% of the shares outstanding. American Funds Small Cap World Fu bought 0.76 million shares to bring its total holdings to over 3.12 million shares at a value of $48.71 million. American Funds Small Cap World Fu now owns shares totaling to 2.54% of the shares outstanding.

Shares of Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) opened at $18.65, down -$0.75 from a prior closing price of $19.40. However, the script later closed the day at $18.45, down -4.87%. The company’s stock has a 5-day price change of 21.55% and 36.24% over the past three months. KTOS shares are trading 7.72% year to date (YTD), with the 12-month market performance down to -20.95% lower. It has a 12-month low price of $5.00 and touched a high of $25.08 over the same period. Currently, 2.04 million shares have been traded, compared to an average intraday trading volume of 1.37 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 16.29%, 9.96%, and 7.70% respectively.

Institutional ownership of Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) shares accounts for 78.50% of the company’s 107.20M shares outstanding. Mutual fund holders own 30.39%, while other institutional holders and individual stakeholders account for 46.07% and 2.48% respectively.

It has a market capitalization of $2.18B and a beta (3y monthly) value of 1.22. The stock’s trailing 12-month PE ratio is 289.55, while the earnings-per-share (ttm) stands at $0.07. The company has a PEG of 22.27 and a Quick Ratio of 2.50 with the debt-to-equity ratio at 0.58. Price movements for the stock have been influenced by the stock’s volatility, which stands at 7.73% over the week and 5.07% over the month.

Analysts forecast that Kratos Defense & Security Solutions Inc. (KTOS) will achieve an EPS of $0.06 for the current quarter, $0.11 for the next quarter and $0.55 for 2021. The lowest estimate earnings-per-share for the quarter is $0.03 while analysts give the company a high EPS estimate of $0.08. Comparatively, EPS for the current quarter was $0.08 a year ago. Earnings per share for the fiscal year are expected to increase by 150.40%, and 38.54% over the next financial year. EPS should shrink at an annualized rate of 13.00% over the next five years, compared to 15.70% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 10 brokerage firm advisors rate Kratos Defense & Security Solutions Inc. (KTOS) as a “Strong Buy” at a consensus score of 1.70. Specifically, 9 Wall Street analysts polled rate the stock as a buy, while 0 of the 10 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the KTOS, a number of firms have released research notes about the stock. The Benchmark Company stated their Buy rating for the stock in a research note on March 18, 2020, with the firm’s price target at $19. SunTrust coverage for the Kratos Defense & Security Solutions Inc. (KTOS) stock in a research note released on March 11, 2020 offered a Buy rating with a price target of. Jefferies was of a view on February 26, 2020 that the stock is Buy, while Noble Capital Markets gave the stock Outperform rating on October 02, 2019, issuing a price target of $23. Goldman on their part issued Buy rating on August 16, 2019.


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