We recently compiled a list of the 10 Mid-Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) stands against the other feminist stocks. We previously covered 10 Mid-Cap Stocks Insiders Are Buying Recently.
Why should investors analyze insider trading activity? Insiders, or people in high positions within a company—such as executives and directors—can have crucial insights into the company’s strategic moves, plans, and initiatives. When, for example, a CEO invests their own capital in company stocks, it can indicate strong confidence in the company’s future results.
What does it mean when insiders are selling their shares? It doesn’t necessarily mean bad news for the stock. Sometimes, large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward potential.
It is important to note that both insider selling and buying can be driven by various motives. Therefore, any insider trading activity should be analyzed within the broader context of the company’s fundamentals, industry trends, and overall market conditions. Many insider purchases don’t necessarily mean the company will be successful. That’s why due diligence before any investment is of the utmost importance. Investors should also take into account and carefully analyze underlying reasons for insider transactions. However, insider trading activity in combination with other relevant factors can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To identify the 10 mid-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of between $2 billion and $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders buying over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
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Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Number of Insiders Selling: 8
Market Capitalization: $4.916B
Kratos Defense & Security Solutions, Inc. is a California-based provider of unmanned systems, satellite communications and cybersecurity solutions for the defense and security sectors. Among its customers are the U.S. federal government, foreign governments, and commercial enterprises.
In December and January, eight insiders sold a total of around $2.09 million worth of Kratos Defense’s shares at an average price of about $29.26 per share. The stock is now trading at $33.09 per share, having gained 25.44% year-to-date. Over the last 12 months, the company’s shares went up 80.03%.
As per data from Stock Analysis, the average rating for Kratos Defense stock from 11 analysts is “Buy.” The 12-month stock price forecast is $28.4.
For the third quarter of 2024, Kratos Defense reported revenues of $275.9 million, up from $274.6 million in the same period of 2023. The company also disclosed a net income of $3.2 million, compared to a net loss of $1.6 million in the third quarter of 2023. In January, Kratos Defense announced it was awarded a Geolocation Global Support Services (GGSS) contract in the amount of $48 million, and a a five-year OTA contract for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 under Task Area 1, with the total value of this award if all options are exercised over the five years being $1.45 billion.
Recently, Jim Cramer commented on Kratos Defense stock saying “Modern military, modern defense, I like the story very much. I think you’re in good shape.”
Overall KTOS ranks 5th on our list of the mid-cap stocks insiders are selling recently. While we acknowledge the potential of KTOS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KTOS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
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