Kratos Defense & Security Solutions stock continued its upward trend on Monday, gaining 2.5% by 10:15 a.m. ET. This marked the third consecutive day of increases for the military drones company.
The rise followed an announcement that Kratos is building a new 40,000 square foot factory in Birmingham, Alabama. The facility is intended to expand weapons production.
Last week, President Trump called for a significant expansion of the U.S. defense budget to $1.5 trillion. He attached conditions to this proposal, stating that defense contractors would need to commit to not paying dividends or buying back stock. Instead, they would be required to use extra revenue from contracts to make capital investments aimed at expanding weapons production.
Kratos already does not pay a dividend. The company has also expanded its share count by 37% over the last five years.
In response to the President's demands, Kratos stated the new factory demonstrates its "long-term commitment to Alabama's skilled workforce, advanced manufacturing base, and role in supporting U.S. defense readiness."
The company said the factory will help it "rapidly design, develop and field relevant military grade hardware, software and systems." This includes HORUS high-altitude imaging systems, CRADLE radar communications platforms, and "UltraSpec" inspection technology for advanced composite materials.
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