KTOS - Kratos Defense gains on speculation could become activist target

Kratos Defense & Security Solutions (NASDAQ:KTOS) rose 3.1% as traders circulated a report from last Tuesday that the drone maker could become a target for an activist holder. Kratos is listed in the 97th percentile of companies that are most likely to face activism over the coming three quarters, according to Insightia's Vulnerability module.  Given the recent appetite for M&A in the aerospace sector, an activist may argue for a potential sale of the company, especially given the recent success of military UAVs in the Ukraine war, according to the report. There could also be calls for the company to divest non-core assets.  Although the report speculates about a potential sale, in reality a sale may prove a bit more difficult after the FTC in January sued to block Lockheed Martin's (LMT) planned acquisition of Aerojet Rocketdyne (AJRD). In addition in February the Dept. of Defense warned about threat from further consolidation. Raytheon

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Kratos Defense gains on speculation could become activist target