Why Austal is a value packed share, page-89

From Jan 2020 until about October 2020 the ASB share price (candle chart below) has broadly correlated with the Aussie market (blue chart below S&P300). One thing that has happened since October is that the big banks, which dominate the market index have rallied around 30%, so there could have been selling out of stocks like ASB to buy the banks. In addition, since October the USD has weakened by around 8%. I am not sure how much ASB hedges against currency, but hedging isn't 100% effective. I also own IPH ( patent law firm) which has a very similar chart to ASB, including the drop around October, but the drop was not as severe. A post on an IPH hotcopper forum indicated that even with hedging every 1c drop in the USD results in a 1.9M difference in revenue ($386M revenue in FY20, profit margin 17.7%). ASB had revenue of ~$2086M in FY 20, so each 1c drop in the USD might lead to ~ $10M drop in revenue, assuming all things being equal. ASB only had profit margin of 4.3% in FY20, so resulting earnings and hence share price are likely to be more sensitive to changes in revenue.

Of course there are probably other factors at play, all IMO.