It was only back in May 2013 that the Aussie dollar was still at parity with the US greenback. It was popular with forex traders because Australia had some of the highest government bond yield rates and also it was a "proxy currency" for China through the iron ore and coal industries.
Now, that has all changed and it has slipped down to under US$82 cents on weakening commodities markets and an economic slowdown. The RBA wants it to fall even further – to as little as US$75c – to relieve economic pressure.
Australian investors have several options to take advantage of the situation and safeguard their returns. One is to invest directly in foreign stocks. The US stock market is still expected to expand as its general economy recovers, so international equities may see better returns than ASX stocks.
Another way is to buy more Aussie companies that have large portions of revenue coming from overseas business. There are a number of ASX-listed stocks that have successful businesses abroad that could get a boost in earnings from US dollar and Euro denominated revenue.
Here are 4 stocks with strong international business that can help keep your returns strong and stable in 2015 and beyond.
ResMed Inc (CHESS) (ASX: RMD) produces breathing aids and respiratory devices for individuals. It is also expanding its e-health product lines that average people can use to monitor and analyse their sleep and breathing patterns. This is intended to open up a much larger mainstream customer base through mobile app development in conjunction with Apple's (NASDAQ: AAPL) Apple HealthKit and Nintendo's new Nintendo Health division.
Brambles Limited (ASX: BXB), the global supply-chain logistics service provider, is forecast to grow earnings on average 13% annually over the next two years. It still is making steady acquisitions to expand its global footprint. Only about 11% of revenue is generated in Australia, so the company provides excellent exposure to foreign markets and strong currencies.
Sirtex Medical Limited (ASX: SRX) produces a specialised liver cancer treatment used in the US and other major medical markets that could potentially become a first-line treatment for cancer patients. If clinical trial results suggest its SIR-Spheres product should be a routine cancer treatment administered to all patients at the beginning of therapy, production is expected to more than triple to meet the sudden new demand. Already a big success, this could boost Sirtex Medical up even further.
SEEK Limited (ASX: SEK) is the top market leader for job search services through its seek.com.au website. It has subsidiaries in Malaysia, Singapore and several other South East Asian countries. It is also the majority shareholder in China's number one job search website Zhaopin (NYSE: ZPIN) which it listed on the New York Stock Exchange in FY 2014. Thanks to the overseas business expansion, SEEK is forecast to maintain its double-digit earnings growth over the next two years. Its move into international markets is really paying off.
