Here are 3 ways to profit from a weak Australian dollar

Credit : Will

The Australian dollar may have fallen over 4% in the last two months, but there could be further declines to come in the future it seems.

According to a research note out of Credit Suisse this morning, courtesy of the Sydney Morning Herald, the investment bank believes the RBA may have to cut rates three more times.

Although the recent job numbers were better than expected, the fall in full-time jobs is a big concern for Credit Suisse.

Its analysts believe this is a sign that the Australian economy is falling short of its potential and that “the output gap is at levels historically consistent with another cash rate cut.”

Whilst the general consensus is that rates will remain on hold for the foreseeable future, I wouldn’t be surprised to see rates taken lower if the Australian economy continues to misfire.

If rates are taken lower I believe it will put significant pressure on the Australian dollar, sending it as low as 70 U.S. cents.

Three companies which I think would be big winners from a weaker Australian dollar are listed below:

Ardent Leisure Group (ASX: AAD)

Whilst it is best known for its embattled Dreamworld business, the main breadwinner for the company is its Main Event business in the United States. At present Main Event accounts for 63% of the company’s EBITDA, but I expect this to increase even further over the next few years as its aggressive expansion continues.

Cochlear Limited (ASX: COH)

Whilst its shares are a touch expensive, Cochlear would have to be one of the highest quality businesses on the ASX in my opinion. This could make it well worth paying a premium to own its shares, especially if the Australian dollar declines. After all, a significant portion of its sales come from the North American market.

Nanosonics Ltd. (ASX: NAN)

This infection control company recently reported an incredible 131% jump in half-year sales to $36.1 million. As the vast majority of these sales were generated in the enormous U.S. market, I believe that Nanosonics is a company that is likely to benefit greatly from favourable currency movements.

Finally, as well as Ardent Leisure, Cochlear, and Nanosonics, here are three other exciting shares which I think could be in a strong position to grow at an above-average rate over the next few years.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.