The recent tumble in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) means many businesses are currently trading at big discounts to prices they sold for just a few months ago.
Some of these businesses also have exposure to a lower Australian dollar, which means they are likely to do well in the year ahead due to the dollar's tough outlook and the likelihood of cash rate lifts in the US and UK in the near future.
Here are four businesses with exposure to a falling Aussie dollar that trade at discounts to recent prices.
Crown Resorts Ltd (ASX: CWN) stock has fallen around 30% over the past year as investors worry about its debt-fuelled expansion plans and tumbling revenues at its Melco-Crown joint venture in Macau.
The Chinese government's crackdown on Macau's reputation as an out-of-sight international money transfer hub for rich Chinese has taken its toll on Macau casinos, but the Macau slowdown is now largely priced into Crown's share price.
Furthermore, as the dollar tumbles Crown's core Australian operations are likely to benefit from an increase in high-spending overseas tourists, while locals holiday at home more.
Today the stock sells for $10.98 on 15x analysts' estimates for forward earnings with a big growth pipeline of projects in Las Vegas, Sydney and Asia. This is all backed up by its dominant Crown Melbourne operation and it might be a bet worth taking.
TFS Corporation Limited (ASX: TFC) manages sandalwood plantations in the tropical regions of northern Australia. Sandalwood is sold in appreciating US dollars, while the wood's relative rarity is seeing market prices rise due to the inelastic demand side.
Plantation sales are also seeing strong investor demand and selling for $1.55 TFS Corp is only ascribed a market value of $515 million having just posted cash earnings of $57.5 million – with a forecast for a 5-10% earnings increase this financial year. It looks a high-risk bet that may attract investors.
Macquarie Group Ltd (ASX: MQG) has dropped around 15% from July's prices as worries over China and slowing global growth knocked the stuffing out of global capital markets facing businesses worldwide.
For Australian investors though Macquarie continues to offer leverage to a falling dollar and strengthening US economy, with an attractive trailing 4.5% dividend yield and more growth forecast it looks a buy in my opinion.
Westfield Corp Ltd (ASX: WFD) admittedly has not been sold off much recently, but its defensive earnings and ability to ride out the worst storms better than most are exactly what makes it attractive. The business also has heavy leverage to the US dollar, a great yield, a strong real estate development pipeline and perhaps most importantly a superb management team.
I would not bet against the Lowy family's expertise or ambitions and this business is a rarity among large-caps on the ASX given how genuinely aligned shareholders' interests are with the interests of management. Offering a small discount to recent prices this stock looks a buy at $9.70.
