Why Kratos Defense & Security Solutions Stock Soared 21.5% in August
After crashing 10% in the wake of its second-quarter earnings report in July, tiny defense contractor and drone-builder Kratos Defense & Security Solutions (NASDAQ: KTOS) bounced right back in August -- and booked a 21.5% gain.
Why is Kratos's stock rocking? Moving quickly to stem investor concerns over its failure to earn a profit in Q2 (as it had promised to do), Kratos issued a series of positive press releases early in August, detailing contract wins to produce everything from microwave electronics products to anti-ballistic missile "modular systems," radar system components, and satellite parts. It announced nearly $44 million in total contracts, or about 6% of total annual revenues, in just one month.
Management followed that up with a positive assessment of flight tests of its new UTAP-22 "Mako" combat drone, and a series of appearances to hype its potential at aerospace and defense-industry conferences around the country. But does all of this really add up to Kratos being worth 21.5% more today than it was worth after reporting earnings?
Source: Fool.com