Jim Cramer and his team at TheStreet's Action Alerts PLUS club for investors say a Democratic takeover of the U.S. House in Tuesday's midterm elections will favor six specific stocks, while a Republican victory would help four other names.
"Without taking sides, we are simply providing our view on how certain stocks and industries may react depending on which party takes control of the House," Cramer and his researchers wrote Tuesday ahead of the results in an exclusive note for club members.
The team said that if Democrats win a House majority, as many polls suggest, "we think investors will look to buy the tech sector. ... A gridlock scenario, where the House and Senate are controlled by different parties, may serve to offset President Trump's call to raise tariffs on Chinese imports -- a factor that could be viewed as a positive given the tech has been placed in the intellectual-property crosshairs of the ongoing trade dispute."
As a result, Cramer and his experts like five cloud-computing stocks and one e-commerce name.
On the other hand, the stockpickers believe that three defense stocks will particularly benefit if the GOP retains the House. "The expectation amongst investors has been for the Democrats to take control of the House, and thus curb [defense] spending," the team wrote. "But should the Republicans maintain control, this fear would be reduced."
The analysts added that one health-care stock in particular could also benefit from a Republican House victory. That's because a win on Tuesday could give the GOP the votes to suspend or eliminate a major health-insurer fee that's required under the Affordable Care Act (Obamacare), which is unpopular with Republicans.
Want to see specifics of which stocks Cramer and his team like for a Democratic victory or a Republican one? Click here for a free 14-day trial of Action Alerts PLUS and read their entire research note now.
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