|
|
|
|
|||||
|
|
|
Kratos Defense is building a new factory to expand weapons production.
President Trump has promised more money for defense contractors who invest in production.
On a red day for the stock market, Kratos Defense & Security (NASDAQ: KTOS) stock just keeps going up.
Shares of the military drones stock marked a third straight day of gains Monday, up 2.5% through 10:15 a.m. ET, after announcing plans to expand production with a new 40,000 square foot factory in Birmingham, Ala.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Last week, President Trump called for a huge expansion of the U.S. defense budget to $1.5 trillion -- with strings attached. In exchange for sharing in the flood of new money, defense contractors would need to commit to not paying dividends or buying back stock, and using the extra revenue they collect from contracts to make capital investments to expand weapons production.
Kratos already doesn't pay a dividend, however. It's also expanded its share count by 37% over the last five years. (But note: That's not necessarily a good thing).
Responding most directly to the President's wish list of demands, Kratos now says it's building a new factory -- proof positive of its "long-term commitment to Alabama's skilled workforce, advanced manufacturing base, and role in supporting U.S. defense readiness."
The new factory will help Kratos "rapidly design, develop and field relevant military grade hardware, software and systems," including HORUS high-altitude imaging systems, CRADLE radar communications platforms, and "UltraSpec" inspection technology for advanced composite materials.
Kratos is making a smart move here to align itself with Trump's defense policy. I do obviously still have concerns about the stock's valuation -- 800 times trailing earnings is a lot to pay for a defense stock -- and its lack of free cash flow.
The company's PR department is firing on all cylinders, however, and the President should be pleased.
Before you buy stock in Kratos Defense & Security Solutions, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kratos Defense & Security Solutions wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $482,451!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,133,229!*
Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 197% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of January 12, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kratos Defense & Security Solutions. The Motley Fool has a disclosure policy.
| 4 hours | |
| 6 hours | |
| 6 hours | |
| 9 hours | |
| Jan-11 | |
| Jan-10 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-09 | |
| Jan-08 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite