(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — One of the unsung cheat codes for investing in stocks is to find the most powerful, generational tailwinds and put them at your back. This means thinking about the types of things people and companies will be spending their capital on almost regardless of what happens to the cyclical economic story. We have discussed some of these secular tailwinds before when writing up stocks like CrowdStrike (CRWD) and many other cybersecurity plays. Cybersecurity is a must for corporations, governments and other organizations; it’s not a “nice to have” sort of endeavor. If you get hacked badly enough, it doesn’t really matter what else you’re doing — it could be game over. Cyber is among the most durable software themes of the decade so far and it’s hard to see what would change that. I think of defense spending in this time of endless and unlimited potential conflict as, unfortunately, a pretty safe bet. It would be nice if this weren’t the case, but we both know that it is. Countries around the world, including the United States, are arming their militaries and remaking their defense capabilities like we haven’t seen in decades. Vladimir Putin is the greatest munitions salesman the world has ever known. This doesn’t mean that every defense-related stock is going to work in a straight line. That’s why we look for entries and exits and talk about managing risk no matter what we buy. Sean’s going to show you a law enforcement stock that once looked promising but has since broken down. Then we’ll tackle some other potential setups in the aerospace and defense industry. But first, we’ve got some Best Stocks in the Market stats to share as well. Strap up. Sector leaderboard As of Nov 10, there are 188 names on he Best Stocks in the Market list. Top sector ranking: Top industries: Top 5 best stocks by relative strength: Spotlight Sean — We wrote up AXON twice this year, once on May 19 and again on June 16 . After closing below its 200-day moving average on Oct. 14, the stock was removed from the list. After that date, the stock continued its downtrend and is now 15% lower than that day. You can see the stock was in a messy uptrend, broke down, and then things really got messy following the breach below its 200. The stock fell 18% following its last earnings report, where it missed on earnings and had slower revenue growth compared to previous years along with shrinking margins compared to the prior quarter. With AXON’s poor showing, we wanted to check in on how other aerospace and defense companies are doing. These others are faring better than AXON, but the technicals are getting a little noisy during this recent sell off. RTX is another one we have noted a couple times. RTX is currently the fourth-best performing aerospace and defense stock this year, up 51%. You can see the stock is clearly in an uptrend. The stock gapped higher post results beating on top and bottom lines with 104% free cash flow growth, a record backlog level of $251 billion, and margin expansion across all segments. LHX just reported a record backlog similar to RTX , raising guidance for the rest of 2025 and improving operating margins and organic revenue growth of 10% year-over-year. GD had a similar report to LHX. Operating margins improved 30bps sequentially from the previous quarter, operating earnings were up 11% year-over-year, and backlog improved 19% year over year. These companies are doing okay — they have a major advantage in this environment in that most of these firms’ earrings are coming from government institutions, not consumers. All of this comes against the backdrop of a powerful tailwind for the defense industry the past year or so. Defense budgets are rising across the U.S. and allied nations, driven by consistent geopolitical tension and shifting relationships among US allies. The U.S. alone is expected to spend nearly $900 billion on defense in 2025, an all-time high. Here’s Josh on the technicals. Josh: RTX retested the low 170’s and the buyers did not allow it to fall back into it’s recent gap. This is bullish. Now it’s bouncing off that retest and picking up momentum with an RSI in the high 60s. You can see how the 50-day moving average was bought quickly around $165. Just below that level is your stop if you’re trading. I would give it a little bit of breathing room but not too much. My best guess is we see a new high before year-end. L3Harris (LHX) is messier. I don’t like this action for a trading entry although it would be perfectly fine for it to chop around in a horizontal trading range for investors who are long the name. Ever since snapping its downtrend this past May, LHX has been a good soldier (pun intended), holdings its rising 50-day and trending higher. At the moment, this trend line is being tested. Totally natural, just makes the entry decision harder. The name is still 21% above its 200-day with lots of room to chop around before we can say there’s any sort of real trouble. Risk management General Dynamics (GD) is still a pristine chart. The stock acted well this fall and the buyers are buying all dips, in a hurry. I think this one sees $375 before it sees $325. That being said, use the low end of the July gap at 310 as a pivot point. A violation of that level invalidates the uptrend and changes the technical attractiveness of the stock. Until then, I think you can ride it. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC” TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
