Market noise is everywhere. Financial headlines focus on the same handful of stocks while important opportunities – the kind that can meaningfully impact your portfolio – often fly under the radar.
That’s exactly why we publish this watchlist each week.
While most investors get distracted by mainstream stories, we’re digging through earnings reports, analyzing technical setups, and monitoring where institutional money is flowing to identify companies at potential turning points. Our focus isn’t on what’s already priced in, but rather on what the market hasn’t fully recognized yet.
Each week, we spotlight three stocks that deserve your attention. We look for opportunities where timing, valuation, and potential catalysts align to create favorable entry points.
Here’s what we’re watching this week:
General Dynamics (GD)
General Dynamics emerges as the cleanest technical setup among aerospace and defense stocks positioned to benefit from the secular tailwind of rising global defense spending. The company operates against a backdrop of defense budgets rising across the United States and allied nations driven by persistent geopolitical tensions, with U.S. spending alone expected to reach nearly $900 billion in 2025—an all-time high.
Defense spending represents one of the most durable secular themes given its non-discretionary nature as countries rebuild military capabilities in response to global conflicts.
The fundamental performance validates the sector opportunity:
- Operating margin improvement of 30 basis points sequentially from previous quarter
- Operating earnings up 11% year-over-year
- Backlog growth of 19% year-over-year
These results mirror strong performance across the defense sector where companies like RTX reported record backlog of $251 billion with 104% free cash flow growth, while L3Harris announced record backlog alongside raised 2025 guidance with 10% organic revenue growth and margin expansion.
The technical picture for General Dynamics stands out as particularly attractive among defense peers:
- While some names like Axon broke down below 200-day moving averages
- General Dynamics maintains pristine chart with buyers aggressively purchasing all dips
- Stock acted exceptionally well this fall with July gap around $310 providing strong support
- Momentum suggests stock likely sees $375 before revisiting $325
- Uptrend remains intact with violation of $310 level serving as key invalidation point
The defense sector advantage stems from earnings derived primarily from government institutions rather than consumers, providing insulation from economic cycles that impact consumer-facing businesses. General Dynamics benefits from long-term contracts and multi-year programs that create revenue visibility while geopolitical tensions ensure continued government spending regardless of broader economic conditions.
Eli Lilly (LLY)
Eli Lilly represents an exceptional growth opportunity as the pharmaceutical giant rapidly approaches the exclusive $1 trillion market capitalization club driven by explosive growth in diabetes and weight-loss medications. Trading around $1,025 per share with a $969 billion market cap after gaining 30% year-to-date, the company needs only an 11% additional gain to join the trillion-dollar ranks alongside just 10 other U.S. companies including Nvidia, Apple, and Microsoft.
The fundamental driver centers on Eli Lilly’s dominant positioning in the massive anti-obesity drug market:
- Mounjaro and Zepbound, both using tirzepatide for diabetes treatment and weight management
- Q3: Mounjaro sales increased $3.4 billion year-over-year to $6.5 billion
- Zepbound sales surged $2.3 billion to $3.58 billion
- Combined, these products accounted for $10.1 billion of $17.6 billion quarterly revenue
- Overall revenue growth of 54% and earnings per share expansion from $1.07 to $6.21
The market opportunity is staggering:
- Federal statistics estimate 43.1% of U.S. adults are obese
- Grand View Research projects global anti-obesity drug market expanding from $6.6 billion in 2023 to $77.24 billion by 2030
- Represents 31.66% compound annual growth rate
Eli Lilly’s additional pipeline provides diversification beyond weight-loss medications:
- Jaypirca for leukemia generating $143 million quarterly revenue with 61% prescription growth
- Ebglyss for eczema producing $127 million with 41% quarterly prescription growth
- Cancer drug Verzenio contributing $1.4 billion in sales
The financial mathematics support the trillion-dollar trajectory:
- Trailing twelve-month revenue of $59.42 billion projected to reach $75.3 billion next year (26% growth)
- At current forward price-to-sales ratio of 14.1 and hitting $75.3 billion revenue target
- Market cap would reach $1.06 trillion by end-2026
Management is aggressively building capacity through billions invested in Virginia and Texas manufacturing sites plus Puerto Rico facility expansion, while the Nvidia partnership promotes AI-accelerated drug discovery.
Exxon Mobil (XOM)
Exxon Mobil presents a compelling opportunity as the oil major’s fundamentals appear to be bottoming just as the stock approaches a potential breakout above multi-year resistance around $125. Trading around $118 per share following its Q3 earnings release on October 31, the company delivered record upstream production of 4.8 million barrels per day including 1.8 million from the Permian and 700,000 in Guyana.
Management highlighted strong shareholder returns:
- $9.4 billion in capital returned including $4.2 billion in dividends and $5.1 billion in share repurchases
- Declared Q4 dividend of $1.03 per share representing 4% increase
The fundamental transformation centers on Exxon’s aggressive cost-cutting program:
- Since 2019, achieved $14 billion in cumulative structural cost savings
- $2.2 billion realized year-to-date in 2025
- Operational efficiency focus means each dollar of oil price increase translates to greater earnings leverage
The growth trajectory is accelerating:
- 10 key projects scheduled for completion in 2025
- Expected to drive more than $3 billion in earnings contributions at constant prices and margins
- New growth driver from liquefied natural gas through Golden Pass LNG export terminal in Texas (jointly owned with QatarEnergy)
- Set to begin operations at year-end 2025
- Capacity exceeding 18 million metric tons annually when fully operational
Exxon’s capital allocation strategy has fundamentally shifted:
- Historical reinvestment rate averaged 70% during 2010-2019
- Current levels of 45-55%
- Further decline expected to 35% by 2030
- More efficiently deploying capital while returning more cash to shareholders
After three years of consolidation, a breakout above the $125 overhead resistance would trigger an extended rally with dividend yield and low expectations buffering downside risk.