Core Insights - The Alger Weatherbie Specialized Fund focuses on investing in a portfolio of 50 small and mid-cap companies with promising growth potential, highlighting a strong performance in the US equity market during Q4 2025 with the S&P rising 2.7% [1] - The fund's Class A shares underperformed the Russell 2500 Growth Index in Q4 2025, with contributions from Real Estate and Consumer Staples sectors, while Information Technology and Health Care sectors detracted from performance [1] Company Highlights - Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a defense technology company focused on affordable unmanned systems, hypersonics, rocket systems, and satellite command-and-control, aligning with U.S. and allied priorities [3] - Kratos experienced a one-month return of 46.53% and a 52-week gain of 233.58%, with a market capitalization of $19.223 billion as of January 22, 2026 [2] - Despite strong fiscal third-quarter operating results, Kratos' shares faced pressure due to a lower-than-expected revenue outlook and cash flow expectations for the fiscal fourth quarter, compounded by delays in cash receipts from the U.S. government shutdown [3]

Core Insights - Royce Investment Partners anticipates a rebound for small-cap quality and value stocks in 2026, moving away from speculative stocks linked to AI that have dominated the market since April 2025 [2][4] - The firm emphasizes that strong companies with solid balance sheets and attractive valuations will attract investor interest, particularly in the consumer staples, packaging, business services, and insurance sectors [3][4] - Small-cap stocks are expected to outperform larger counterparts in 2026, marking a significant shift in market dynamics [4] Company Highlights - **Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)**: - Analysts from Goldman Sachs and Stifel Nicolaus have reiterated a Buy rating, raising the price target from $93 to $125 and from $112 to $134 respectively [8][9] - The aerospace and defense sector is projected to remain strong in 2026 due to supply-demand dynamics, with KTOS benefiting from order momentum in Valkyrie drones and advancements in hypersonic testing [10][11] - **Coeur Mining, Inc. (NYSE:CDE)**: - The company has received a Buy rating from Raymond James, with the price target increased from $21 to $24.5, and from Roth MKM, with the target raised from $20 to $23 [12][13] - The updated outlook for gold and silver prices in 2026 reflects significant increases, with gold projected at $4,125 and silver at $56.25, influenced by macroeconomic factors [13] - Coeur Mining is expected to report fiscal Q4 2025 results on February 18, with anticipated revenue of approximately $668.7 million and a GAAP EPS of $0.48 [14]

Core Insights - Kratos Defense & Security Solutions, Inc. is a significant player in the defense sector, focusing on military drones and satellite communication networks, primarily serving the U.S. military and gaining traction in Europe [1] - The company has a market capitalization of approximately $20.36 billion, indicating its substantial presence in the defense industry [5] Stock Performance - Piper Sandler initiated coverage on Kratos with a Neutral rating and a stock price of $120.59, suggesting expected performance in line with the market [2][6] - The stock experienced a notable decline of 9% by midday, attributed to broader geopolitical concerns, despite the absence of specific news about the company [2][6] - Currently, the stock is priced at $120.59, reflecting a decrease of 6.29% or $8.09, with fluctuations between a low of $114.28 and a high of $128 on the same day [4] Geopolitical Context - Geopolitical tensions have arisen from President Trump's comments regarding the potential annexation of Greenland, which has unsettled European leaders and may lead to increased defense spending or a shift in military hardware purchases away from the U.S. [3] - This geopolitical climate could impact Kratos, given its role in supplying military drones to NATO allies [3]

Core Viewpoint - Kratos Defense & Security (NASDAQ: KTOS) experienced a 9% stock decline, attributed to investor concerns over potential shifts in European defense spending in response to U.S. geopolitical actions [1][6]. Group 1: Company Overview - Kratos Defense specializes in military drones primarily for the U.S. military and has gained traction in Europe for its advanced military capabilities, including stealth drones and satellite communication networks [4]. - The company generates a significant majority of its revenue from North America, with only about 4% coming from arms sales to Europe [7]. Group 2: Market Reaction - The stock sell-off occurred without any specific news related to Kratos, indicating that investor sentiment may be influenced by broader geopolitical tensions, particularly regarding President Trump's comments on Greenland [5][6]. - Despite the recent decline, the risk to Kratos's revenue from European sales is considered minimal, suggesting that the stock's current valuation may not warrant a sell-off based on these geopolitical concerns [7]. Group 3: Investment Considerations - Analysts have identified alternative investment opportunities, suggesting that Kratos Defense & Security Solutions is not currently among the top recommended stocks for investors [8].

Core Insights - The article discusses the significant momentum in the drone and defense sector, highlighting the shift towards tactical unmanned aircraft systems and the growing importance of companies like AeroVironment [1][3][4] Company Highlights - AeroVironment has established itself as a leader in tactical unmanned aircraft systems, with products like Raven, Puma, and Switchblade widely used by the U.S. Department of Defense and allied militaries [1] - The company reported a revenue of $472.5 million for the fiscal year 2025, representing a year-over-year increase of over 150% [10] - AeroVironment raised its fiscal 2026 revenue guidance to between $1.95 billion and $2 billion, supported by record contract awards totaling $3.5 billion [11] - The company’s shares have increased by more than 60% year-to-date, reflecting strong sector performance and confidence in its execution [8] Industry Trends - The defense landscape is shifting from high-cost legacy platforms to autonomous systems and low-cost drone swarms, driven by rising geopolitical risks and increased defense budgets [4][6] - Modern warfare is increasingly characterized by speed and data dominance, with drones becoming frontline assets rather than auxiliary tools [5] - The article emphasizes the growing role of mid- and small-cap companies in the defense sector, which are supplying hardware, software, and data infrastructure for next-generation defense systems [3][7] Other Notable Companies - Kratos Defense has seen its stock rise approximately 72% year-to-date, focusing on unmanned aircraft and missile defense systems [14][15] - Velo3D, which provides advanced metal additive manufacturing systems, has increased by nearly 57% year-to-date, benefiting from partnerships with the U.S. Army and SpaceX [21][22] - Sidus Space has experienced explosive momentum, with shares surging over 250% due to its selection for a contract under the Missile Defense Agency's SHIELD program [25][26] - Ondas Holdings has emerged as a momentum leader, with shares up nearly 25% year-to-date and a significant backlog growth of 180% [29][30]

Group 1: Company Overview - Aerovironment (AVAV) and Kratos Defense (KTOS) are leading manufacturers of military drones, both securing significant contracts from the Pentagon in the past year [1][4][6] - AVAV reported a revenue increase of 4% year-over-year to $472.5 million in its fiscal second quarter, while its net cash flow decreased by 50.6% to $318.57 million [4] - Kratos experienced a 1% decline in sales to $347.6 million in the third quarter, but its net income surged by 200% year-over-year to $8.7 million [5] Group 2: Market Dynamics - Geopolitical tensions are rising globally, prompting many countries to significantly increase their defense spending [1] - President Trump has proposed a 50% increase in defense spending for fiscal 2027, indicating a favorable environment for defense contractors [1] Group 3: Valuation and Investment Sentiment - Both AVAV and KTOS stocks are currently valued at high multiples, with AVAV having a forward price-earnings ratio of 110 and a market capitalization of nearly $19 billion, while KTOS has a forward price-earnings ratio of 220 and a market capitalization of $21 billion [4][5] - As recent crises fade, there is a potential for both stocks to retreat, leading to recommendations for profit-taking by investors [2][3] Group 4: Recent Contracts and Innovations - AVAV secured a contract worth nearly $240 million for developing long-haul space laser communication terminals and a $246 million agreement for anti-electromagnetic spectrum products for the Air Force [6] - The company is also involved in R&D for anti-EMS initiatives and has acquired Blue Halo, positioning itself for advancements in space and missile defense initiatives [6]

Industry Overview - The defense and aerospace industry is experiencing volatility due to President Trump's proposals, including limiting defense stock buybacks and capping executive pay, which are seen as negative but unlikely to become law [1] - A proposed increase in the Pentagon's budget to $1.5 trillion by 2027 represents a 66% increase over the current 2026 defense budget, indicating a priority for increased defense spending [1][2] Company Highlights Kratos Defense and Security Solutions Inc. - Kratos has emerged as a significant player in the defense sector, reaching a market cap of $20 billion, driven by innovations in unmanned systems [3] - The company has consistently generated over $300 million in sales for three consecutive quarters and has surpassed analysts' EPS projections [3] - Kratos' stock has received three price target increases in 2026, including a new high target of $134 from Stifel [3] RTX Corp. - RTX, formed from the merger of Raytheon and United Technologies, has a market cap of nearly $260 billion and generates over $80 billion in annual sales [8] - The company is trading at 31 times forward earnings with a dividend yield of 1.4%, and is expected to report record quarterly revenue of over $22.7 billion in its upcoming Q4 2025 earnings report [8] L3Harris Technologies Inc. - L3Harris received a $1 billion investment promise from the Department of Defense and plans to spin out its missile business into a separate entity [9] - The stock has increased over 16% since the start of January 2026, driven by solid fundamentals and a bullish MACD crossover [12] General Dynamics Corp. - General Dynamics, a $97 billion defense contractor, has a strong history of dividend payouts, raising them for 34 consecutive years with a yield of 1.66% [13] - The company has a favorable valuation at 24 times forward earnings and recently secured a $900 billion deal with the U.S. Navy [15] Northrop Grumman Corp. - Northrop Grumman is the fifth-largest U.S. contractor by defense spending and has recently broken out of a multi-month downtrend [17][20] - The stock has retaken the 50-day SMA, with the breakout confirmed on the MACD, indicating potential for further upside [20]

Core Viewpoint - Kratos Defense & Security Solutions has opened a new 55,000-square-foot hypersonic and "Other" system manufacturing and payload integration facility in Princess Anne, Maryland, reflecting its commitment to national security and the U.S. defense industrial base [1] Group 1: Facility Details - The new facility spans 55,000 square feet and is designed for manufacturing and payload integration [1] - The facility is strategically linked to customers, programs, contracts, partners, and specific hardware, ensuring tailored and efficient operations [1] Group 2: Company Strategy - The opening of the facility exemplifies Kratos' strategy of making upfront commitments to rapidly develop and deploy relevant national security hardware and systems [1] - The facility aims to achieve low-cost, efficient rapid execution and delivery to the warfighter [1]

Core Insights - Leading cryptocurrencies experienced significant gains as the Senate prepares to markup a key bill aimed at regulating the cryptocurrency market [1][3] Cryptocurrency Market Performance - Bitcoin surged by 4.43% to $95,374.58, marking its first rise above $96,000 in nearly two months, with a trading volume increase of 45% over the last 24 hours [2] - Ethereum reached a two-month high of $3,350, while XRP and Dogecoin also saw notable increases [3] - The global cryptocurrency market capitalization rose to $3.25 trillion, reflecting a 4.67% increase over the last 24 hours [6] Market Sentiment and Trading Activity - The Crypto Fear & Greed Index indicated a shift in market sentiment from "Fear" to "Neutral" [5] - Approximately $680 million was liquidated from the cryptocurrency market in the last 24 hours, with $592 million in bearish shorts eliminated [4] - Bitcoin's open interest increased by 6.65%, with over 50% of derivatives traders placing long bets on Bitcoin [4] Analyst Predictions - Analysts predict a potential bull market for Bitcoin, with projections suggesting it could reach $100,000 in the coming week [10] - Another analyst indicated that if Bitcoin crosses $94,555, a target of $105,921 could be in play [10]

Core Insights - Kratos Defense & Security Solutions, Inc. has opened a new 55,000-square-foot hypersonic and system manufacturing facility in Princess Anne, Maryland, marking its sixth new facility in a year, demonstrating its commitment to expanding the U.S. defense industrial base [1][3] Group 1: Facility and Capabilities - The new facility will enhance Kratos' capabilities to support launch operations and hypersonic testing for the Multi-Service Advanced Capability Hypersonics Test Bed (MACH-TB) 2.0 program and other customers, including the U.S. Navy, U.S. Air Force, DARPA, and the Missile Defense Agency [2] - The facility features advanced manufacturing capabilities, specialized integration areas, and enhanced testing equipment, strategically located near NASA Wallops Flight Facility to optimize logistics and operational efficiencies [4] Group 2: Strategic Importance - The investment in Princess Anne reflects Kratos' commitment to expanding hypersonic testing infrastructure and capabilities, enabling increased production capacity and rapid response to the growing demand for affordable hypersonic flight testing [3] - The facility is expected to support a $1.4 billion MACH-TB 2.0 contract, facilitating increased test cadence and more affordable flight test opportunities for hypersonic technologies [3] Group 3: Economic Impact - The establishment of the facility is anticipated to create new high-skilled jobs in the region and strengthen Kratos' support for the Department of War's initiatives to accelerate hypersonic technology development and testing [6] - Local officials express optimism about the economic benefits and job retention that Kratos' presence will bring to the Princess Anne community [5][6]