Only a few real winners from a falling dollar
Anton Tagliaferro, Investment Director at Investors Mutual, says the contraction in the domestic export industry has left few opportunities to invest in companies benefitting from a lower dollar. “For many companies the impact is one of translation, which is not a cash flow impact anyway. So your Amcors and Ansells, their EPS is helped when the dollar falls but it is a translation impact. It’s not like they are exporting and making more money through exports.” One trend Tagliaferro has observed from the falling currency is that food packaging companies have reversed a trend of offshoring their operations and have started to bring these functions back onshore. Tagliaferro highlights Pact Group as one company he is ‘quite keen on’ that is benefitting from this trend reversal.
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