I believe the huge overseas exposure of Sage (LSE: SGE) should allow the company to hurdle the worst of a cooling UK economy and keep printing solid earnings growth.
The company — which provides a variety of accounting products to businesses — sources around a third of total revenues from its home territories.
However, Sage’s exposure to the robust North American marketplace in particular gives plenty of reasons to get excited, in my opinion. Organic sales here leapt 9% during October-April. And Sage is also enjoying resounding success in other territories, with organic sales outside Europe and North America climbing 17% during the period.
Like all stocks, Sage can’t be considered completely immune to the threat of significant slowdown in British output, with the threat of economic contagion looming over its other regions too.
But I reckon the software giant can rely on its pan-global exposure, not to mention commitment to innovation, to protect it from the worst of Britain’s EU exit. As do City brokers, who expect Sage to report a 7% earnings rise in the current fiscal year.
I reckon Sage’s strong outlook fully warrants a heady P/E rating of 22 times for the period.
As you’d expect, defence giant Avon Rubber (LSE: AVON) has benefitted from the sector’s longstanding reputation as a go-to destination in turbulent times.
Mankind’s tendency to wage war is one of life’s constants regardless of wider economic considerations. But while many of Avon’s peers face the prospect of pressure on UK arms spend should the domestic economy tank, the mask builder’s strong ties to the US Department of Defense removes some of this uncertainty.
On top of this, Avon’s diversification, which means its rising position in the dairy market through shrewd acquisitions and product innovation, gives it added strength. Indeed, revenues here shot 18% higher during January-March.
With group earnings expected to rise 19% in 2016, I believe Avon is a steal on a P/E rating of just 12.2 times.
In the bank
The emerging markets focus of HSBC (LSE: HSBA) has seen investors pile-into the bank at a staggering rate in recent days. Indeed, ‘The World’s Local Bank’ has avoid the worst of the washout smacking the wider banking sector and is currently dealing at three-month highs.
But like Sage, this doesn’t make HSBC immune to the implications of a potential slump in the UK economy. After all, the company currently generates around a quarter of all revenues from British customers.
Investors should already be prepared for decelerating income growth as developing economies in Asia undergo significant economic rebalancing, while massive streamlining at the bank adds an extra layer of pressure to HSBC’s top line.
Still, I’m convinced that these far-flung markets should deliver splendid long-term gains as expanding wealth levels drive demand for banking products.
And a low prospective P/E rating of 10.3 times makes HSBC an appealing investment choice for patient investors, in my opinion.
Make a fortune while others fidget
In short, there are plenty of reasons to remain bullish on the UK stock market, even if the risks have just leapt a notch, or several.
But as I've explained, times of great macroeconomic uncertainty like these mean that picking the 'right' stock can be more difficult than usual.
So the Motley Fool's expert analysts have been busy scouring the FTSE 250 to dig out what they believe is one of the best growth stocks money can buy.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended HSBC Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.