5 Best Small-Cap Defense Stocks to Invest in

In this article, we will be looking at the 5 best small-cap defense stocks to invest in. To read our detailed analysis of the defense sector, you can go directly to see the 11 Best Small-Cap Defense Stocks to Invest in.

5. Mercury Systems, Inc. (NASDAQ:MRCY)

Number of Hedge Fund Holders: 15

Market Capitalization: $1.8 billion

Mercury Systems, Inc. (NASDAQ:MRCY) manufactures and sells components, products, modules, and subsystems for the aerospace and defense industry. It is based in Andover, Massachusetts.

On February 7, analysts at RBC Capital maintained a Sector Perform rating and a $30 price target on Mercury Systems, Inc. (NASDAQ:MRCY).

In total, 15 hedge funds were long Mercury Systems, Inc. (NASDAQ:MRCY) in the fourth quarter, with a total stake value of $325.7 million.

Baron Funds mentioned Mercury Systems, Inc. (NASDAQ:MRCY) in its fourth-quarter 2023 investor letter:

“We added to our position in Mercury Systems, Inc. (NASDAQ:MRCY), the leading U.S. Tier 2 defense electronics manufacturer and integrator, as we are convinced that the new management team put in place in August 2023 has made meaningful progress in their turnaround efforts, and that shares remain meaningfully undervalued.”

4. Kaman Corporation (NYSE:KAMN)

Number of Hedge Fund Holders: 19

Market Capitalization: $1.3 billion

Kaman Corporation (NYSE:KAMN) had 19 hedge funds long its stock in the fourth quarter, with a total stake value of $130.4 million.

Based in Bloomfield, Connecticut, Kaman Corporation (NYSE:KAMN) operates in the aerospace, defense, medical, and industrial markets. It produces aircraft bearings and components, miniature ball bearings, and wheels, brakes, and related hydraulic components for helicopters, fixed-wing, and UAV aircraft.

3. Astronics Corporation (NASDAQ:ATRO)

Number of Hedge Fund Holders: 20

Market Capitalization: $617.7 million

A Hold rating and an $18 price target were maintained on Astronics Corporation (NASDAQ:ATRO) by Truist Securities on January 10.

Astronics Corporation (NASDAQ:ATRO) designs and manufactures products for the aerospace, defense, and electronics industries. It offers lighting and safety systems, electrical power generation systems, aircraft structures, avionics products, and more.

At the end of the fourth quarter, 20 hedge funds were long Astronics Corporation (NASDAQ:ATRO), with a total stake value of $139 million.

2. Triumph Group, Inc. (NYSE:TGI)

Number of Hedge Fund Holders: 20

Market Capitalization: $1.1 billion

Triumph Group, Inc. (NYSE:TGI) designs, engineers, manufactures, repairs, and overhauls aerostructures, aircraft components, accessories, subassemblies, and systems. It is based in Radnor, Pennsylvania.

In total, 20 hedge funds held stakes in Triumph Group, Inc. (NYSE:TGI) in the fourth quarter, with a total stake value of $341.1 million.

On January 25, Bank of America Securities placed a Buy rating and a $21 price target on Triumph Group, Inc. (NYSE:TGI).

1. Archer Aviation Inc. (NYSE:ACHR)

Number of Hedge Fund Holders: 22

Market Capitalization: $1.7 billion

An Overweight rating and a $10 price target were maintained on Archer Aviation Inc. (NYSE:ACHR) on February 27 by analysts at Cantor Fitzgerald.

There were 22 hedge funds long Archer Aviation Inc. (NYSE:ACHR) in the fourth quarter, with a total stake value of $193.7 million.

Archer Aviation Inc. (NYSE:ACHR) is based in San Jose, California. It designs, develops, and operates electric vertical takeoff and landing aircraft.

See also Top 20 Most Valuable Defense Companies in the World and 13 Best Defense Stocks To Buy Now.