I have a client in the E&P sector that operates in the US and AU. Discussed with the CFO back in 2014 to hedge the USD/AUD, the CFO recommended to the board a currency hedge. Board rejected it. AUD went from .98 to .72. The company was stupid enough to keep sending free cash flow from the US operations to the AU HQ, then when the US ops required capital back to the US.
The cost of capital and loss on the currency not only hurts cash flow, but explaining that to KPMG during an audit and looking like a fool.
Airlines, I like HA, they have nearly $700M in cash and should have hedged against currency flux. They fired their prior CFO after the 2014 currency and oil mess, brought in a novice that the CEO can control, I think she learned her lesson on hedging, or her head will be on the block. Not a buyer of HA yet, but if it flirts with low $30s again, will be a buy.
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