Decorated Combat Vet nominated for Defense Chief, so does that mean more drones?

BY ANDREW GIOVINAZZI

November 15, 2024

Pete Hegseth, Genx Fox News Contributor and 20 year military vet and Ivy League grad is Pres-Elect Trump’s pick for the next SecDev. As of right now, none of Trump’s picks are following the normal path and most if not all are 40 something luminaries that helped on his campaign.

HHS has a new Secretary in the form of one Robert Kennedy Jr. I give credit to DJT, he is going down the list and rewarded folks who helped with the campaign. That sent all health care stocks spiraling, which is what Frank thought would happen. Frank’s pick was good, my close, not so good since I should have waited for the RFK announcement. I will do better next time as my program with Frank has an 88% win rate for 2024. The 0 theta trade is really a great vehicle for the long term picks Frank makes.

Currently we are long some calls in Red Cat Inc (Ticker: RCAT), a drone defense contractor, that was flying after hours Thursday. Frank did mention it here so attending our talk Wednesday would have made some coin.

Back to Pete Hegseth, well he is a soldier’s soldier and he will be into the tech for his troops is my take. The stock below is trading off the adverse side of RCAT. I think the drone pie is plenty big for a few contractors.

I think the reaction was wrong.

Kratos Defense and Security Solutions (Ticker: KTOS) is the mystery ticker

So KTOS is already a profitable drone company at the intersection of AI and right now. The pullback is an overreaction to RCAT in my view and is a viable entry point. I hope by the time class rolls around on Tuesday I can add a new 0 theta trade.