Cathie Wood's Ark Invest added to its position in Kratos Defense & Security on Monday, with the active exchange-traded fund manager having built a significant stake in the drone specialist. Kratos is the fourth-largest holding in ARKQ, the firm's "autonomous technology & robotics" ETF . ARKQ added 62,520 shares of Kratos on Monday and 854,010 shares last month, with the fund now owning 6.9 million shares of the stock. Kratos trails only Tesla , JD.com and Trimble among ARKQ's top holdings by weight. Shares of Kratos jumped 7.8% on Tuesday. The stock is also up more than 90% over the past 12 months. Kratos' business focuses on growing its autonomous tactical drone programs, although Goldman Sachs recently noted the company's space and satellite unit makes up the largest portion of the company's total revenue. The company is the world leader in building target drones – meaning unmanned aerial vehicles that are used for target practice by the military. "Kratos expects solid growth in this product line next year as multiple programs move ... into full rate production," Goldman Sachs analyst Noah Poponak wrote in a recent note. The company is investing in multiple areas the Pentagon sees as the next-generation of warfare, including autonomous drones, spacecraft, hypersonics and laser-based weapons systems. Canaccord Genuity also emphasized Kratos' position as a strength, given the Pentagon's recent "focus on innovation in the defense budget." "After a very strong 2020, [Kratos] stock has significantly under-performed this year, and we believe there are multiple potential [second half 2021] and 2022 positive catalysts," Canaccord Genuity analyst Ken Herbert wrote in a note to clients earlier this month. – CNBC's Michael Bloom contributed to this report.
Cathie Wood, CEO and founder of ARK Invest.
Cathie Wood's Ark Invest added to its position in Kratos Defense & Security on Monday, with the active exchange-traded fund manager having built a significant stake in the drone specialist.