The year-end is approaching for many companies and this may present an opportunity to the canny investor. If a company based in the UK has significant business overseas it may have seen an upturn in the last quarter of 2008, despite the horrid economic environment. This is because with the collapse of sterling versus such currencies as the Euro and US dollar the income generated overseas will be worth more in the last quarter of the year, than in the beginning of 2008. There may be some share valuations which have not fully taken this exchange rate risk benefit into account, thus presenting an opportunity.
A similar investigation may be worthwhile on return on assets calculations. Be warned however that the opposite can be true if you are looking at income generated in the UK for company shares held in the USA or Eurozone.
This is a tricky business, be very careful!
Related posts:
Thanks for writing about this. There’s a heap of bad info about finance on the Net.Your blog is awesome, I have found a lot of good information about finance here. Keep up the good work!