Cadre (CDRE) And Leonardo DRS (DRS) Remain at Buy
Shares of Cadre (CDRE) were down almost 10% yesterday on news of a secondary offering, which will be priced at 35, roughly the level of yesterday’s closing price. It’s not atypical for a stock like this to absorb a secondary over a week (roughly) then resume its upward march. Additionally, with part of CDRE’s growth strategy revolving around M&A, it’s not too surprising that they would seek to raise capital and do so with equity (strong stock) rather than debt (high cost). Maintaining Buy rating as this offering doesn’t change the big-picture story. BUY
Leonardo DRS (DRS) held its first Investor Day this week and the story remains intact. Management talked about profit margin expansion on the Columbia-class sub program (new South Carolina facility a part of this) as well as their hunger for accretive M&A with a focus on “platform agnostic technologies.” BUY
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