Key Points
Ark Invest added Kratos shares to one of its ETFs yesterday.
The U.K. plans on making a sizable investment in drones over the next four years.
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Closing slightly lower than its Friday close, Kratos Defense and Security Solutions (NASDAQ: KTOS) stock is flying higher today. In addition to a popular growth investor buying shares of the defense stock, investors are adding Kratos to their buy lists after learning that a U.S. ally is making a significant investment in drones to fortify its defenses.
As of 1:04 p.m. ET, shares of Kratos Defense are up 5.5%, after earlier rising 9.6%.
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Ark Invest increased its position to start the week
After the market closed yesterday, Ark Invest, led by Cathie Wood, reported that it had bought 138,735 Kratos shares in its Ark Innovation ETF.
Currently, Kratos has a 0.85% weighting in the Ark Innovation ETF, which targets disruptive businesses such as drone developer Kratos.
The other catalyst for the drone stock rising today comes from across the pond. The United Kingdom announced yesterday that the Prime Minister would speak at a defense contractor today, where he would announce an investment of 5 billion British pounds (about $6.6 billion) in drones for the U.K. military over the next four years, making it the largest ever drone investment in U.K. Armed Forces."
While Kratos doesn't specify which nations are customers of its drones, the company does acknowledge that it supplies U.S. allies.
Should investors take flight with Kratos stock?
Unsurprisingly, Kratos stock is flying higher today with Ark Invest increasing its position and the U.K. making a sizable investment in drones -- just the latest reminder of how the technology is playing an increasingly important role in the defense industry. For investors seeking a defense stock that has strong growth potential, Kratos is worth a closer look.
Should you buy stock in Kratos Defense & Security Solutions right now?
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Scott Levine 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
