Given that the US Federal Reserve is making ever louder noises about embarking on the start of a rate hike cycle later in 2015 it makes sense to position your portfolio to enjoy the tailwind of a strengthening US dollar.
The key is to find stocks on reasonable valuations that enjoy positive outlooks aside from US dollar exposure, as it is no use buying a business exposed to the US dollar if its earnings disappoint or it is overvalued.
Here are five businesses that present on reasonable valuations, with some exposure to superior offshore growth, a weakening Aussie dollar, the demographic support for healthcare, and lower local rates for longer.
CSL Limited (ASX: CSL) is a healthcare giant that provides life-saving medicines to the public and private healthcare sectors worldwide. Selling for $96.34 the tailwinds supporting this business suggest it will hit the $100 mark soon enough.
Macquarie Group Ltd (ASX: MQG) was once regarded primarily as an investment bank, but is fast becoming an asset manager that also offers investment and retail banking services. For every 10% drop in the Australian dollar net profit is estimated to lift 7%.
ResMed Inc. (CHESS) (ASX: RMD) is a sleep treatment business with heavy exposure to growth in US markets and direct exposure to a falling Australian dollar. The company is also a market leader in its field with bullet proof like revenue growth that provide it natural growth qualities without the additional tailwind of US dollar appreciation.
Nanosonics Limited (ASX: NAN) is another growing healthcare business focused on the US market. It's more of a speculative bet that sells disinfectant devices to hospitals worldwide and with much of its sales being posted in the US market it will enjoy a natural currency tailwind.
Westfield Corp Ltd (ASX: WFD) is the shopping centre operator with a focus on the US and UK markets. It offers an attractive mix of value, growth and yield in my opinion, with the offshore exposure making it an excellent option to counter the soft outlook for the local economy.
