Tags: weak | dollar | stocks

Weak Dollar Helps Some Stocks Shine

By    |   Monday, 23 Nov 2009 10:50 AM

There’s been a lot of hand wringing lately over the dollar’s drop to 14-month lows.

But one group you won’t see complaining is U.S. multinational companies. That’s because the weak greenback makes their exports cheaper and the revenue they repatriate from abroad greater in dollar terms.

These companies are experiencing major profit gains as a result. And those strong earnings have sent their stock prices soaring.

The 30 stocks of the Standard & Poor’s 500 Index with the highest percentage of sales overseas saw their stocks double since March 1, CNBC reports.

That compares to a 51 percent gain for the bottom 30, which is about equal to the S&P’s performance overall.

The list was heavy on technology stocks —17 of them, including Advanced Micro Devices, Texas Instruments, and Intel.

A Bloomberg report based on data compiled by Bespoke Investment Group shows that shares of S&P 500 companies receiving more than 50 percent of their revenue overseas have outperformed those generating sales only in the U.S. by 27 percentage points this year.

It’s no wonder that investors are flocking to the companies with a foreign emphasis.

“Lately, I’ve been really focusing on the multinationals,” Stefanie Yeager, a fund manager at Vantage Investment Advisors, in State College, Pa., told Bloomberg.

“The U.S. is just slowly coming out of the recession, so companies that are purely domestic still have their problems. The multinationals are really benefiting from the exchange rate.”

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There’s been a lot of hand wringing lately over the dollar’s drop to 14-month lows.But one group you won’t see complaining is U.S. multinational companies. That’s because the weak greenback makes their exports cheaper and the revenue they repatriate from abroad greater in...
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2009-50-23
Monday, 23 Nov 2009 10:50 AM
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