3 Stocks That Could Soar if Republicans Sweep the Midterms

Currently, the consensus expectation, the betting markets, and history indicate a greater than 50% chance that Republicans take control of the House of Representatives and the Senate.

Of course, a lot could happen between now and the November elections, especially with more right-wing and Trump-aligned candidates winning primaries, and the Supreme Court decision on abortion which might energize Democrats.

However, given the poor performance by incumbent parties in midterm elections and the economy falling into recession, Republicans remain the odds on favorites to retake control of Congress even if it may be a weaker wave than what seemed likely a couple of months ago. Here are 3 stocks that could soar higher if this scenario does come to pass:

Axon (NYSE: AXON)

This is the stock formerly known as TASR. And, tasers certainly continue to comprise a meaningful chunk of the company's revenue. However, it has a growing business in providing IT services to police departments which are linked to its camera business.

This is a high-growth, high-margin business. There's also much less competition as there is a significant regulatory burden. And, Axon offers the chance to link different departments together which enhances their ability to share information and solve cases more effectively.

More Republicans at the local, state, and federal levels mean that police funding will likely increase. And, some of this will flow to Axon.

Stride (NYSE: LRN)

LRN is an online, educational platform that is becoming increasingly popular for homeschoolers. Like Axon, it has the favorable economics of a tech business with high margins and high growth.

Homeschooling has been booming for several decades, and its growth will skyrocket even more following the coronavirus. Further, public schools have become politicized, and there is increasing momentum for vouchers. And in some states, these vouchers will also cover online educational programs which would be a boon for companies like Stride.

CoreCivic (NYSE: CXW)

Another beneficiary of Republicans winning the elections is private prison stocks. These stocks were decimated under the Obama Administration as there was a movement to phase them out in favor of state-run institutions.

This is likely to change if Republicans gain more seats especially as one of the issues driving their electoral success is the rising crime rate. Even Democrats at the local level are being forced to confront this issue and take on a 'tough on crime' stance to stay electorally viable.

CXW is a private-prison operator which could see a massive gain if this were to come to fruition. It's very cheap and about 75% off its 5-year high.