Should You Hold Park Aerospace Corp. (PKE)?

Core Insights - Prosper Stars & Stripes achieved a net return of +9.8% in Q3 2025, outperforming its peer group which returned +3.8% and the Russell 2000 Index which returned +12.4% [1] - Year-to-date, the fund returned +8.6%, lagging behind the HFRI's +13.6% and the Russell's +10.4% [1] - The fund's long book performed well, while the short book negatively impacted overall performance [1] Company Highlights: Park Aerospace Corp. (NYSE:PKE) - Park Aerospace Corp. had a one-month return of 2.78% and a 52-week gain of 28.52%, with a market capitalization of $390.154 million as of November 26, 2025 [2] - The company was the second-best contributor in the fund's long book during Q3 2025, focusing on advanced composite materials for aerospace and defense [3] - Park has a sole-sourced agreement for producing composite materials for the LEAP-1A engine, which powers 60-70% of the A320 family of aircraft [3] - Airbus plans to increase production from 50 to 78 planes per month, benefiting Park's operations [3] - Park is involved in the Valkyrie loyal wingman program with Kratos and has historically achieved EBITDA margins above 20% in the aerospace and defense sectors [3] - The company announced a significant investment to expand production capacity for components used in missile systems, responding to increased demand from the US Army [3] - Military sales accounted for 42% of FY25 sales, with expectations for growth in the coming years [3] - The stock is valued at 25x FY26 EBITDA, with projections to reach the mid to high $20s within the next 12 months [3]