Last Friday, the Aussie dollar slipped under US$80 cents for the first time since July 2009. At that time, the low point of the GFC had passed several months earlier and the markets as well as the Aussie were starting to rise.
Our currency started to make its way up because Australia was not as adversely affected by the GFC like the US and Europe. Our interest rates were some of the highest in the world at that time and Australia had a shining AAA credit rating. International investors and traders bought up Aussie dollars and drove the exchange rate up. It was also a proxy currency for the expanding Chinese economy.
Fast forward five years and the commodities markets from iron ore to oil are all tanking. The US dollar has strengthened and the weaker Aussie dollar reflects our subdued domestic economy.
But there are 3 individual stocks listed below that flourish in this kind of environment.
Australian companies generating a large proportion of revenue overseas, especially in the US, can get a boost when foreign earnings are reported in Aussie dollars. You can share in the good times by owning shares in CSL Limited (ASX: CSL), for example. The biopharmaceutical company only makes about 10% of its total revenue in Australia and almost 40% in the US. This profitable and growing business could be a solid performer in your portfolio.
Sirtex Medical Limited (ASX: SRX) has almost doubled in share price in the last twelve months on expectation this already successful company could potentially see a massive leap in demand for its specialised liver cancer treatments in 2015. About three-quarters of its business is in the US, so if the Aussie stays low or goes lower, forecast earnings should get a bump up when translated back into Aussie dollars.
Apart from these global healthcare stocks, Magellan Financial Group Ltd (ASX: MFG) also benefits in similar ways. The fund manager is achieving higher earnings from investing in international equities, which are generally performing much better than the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) currently.
