International investing is all the rage these days—and for good reason. Over the past four years or more, many global stock markets have left New York in the dust. Since March 2003, for example, the Dow Jones Euro STOXX 50, an index of 50 large European companies, has soared 133% in local-currency terms. Thanks to the surging euro, STOXX in dollars has leaped an even more dazzling 209%. Over the same period, our home-grown Standard & Poor’s 500index has tacked on just 85%.

Emerging markets, if you can imagine, have performed even better. From the same starting point in March 2003, the MSCI Emerging Markets Index (in dollar terms) has boomed 360%, one of the great stock market pole vaults of the past century.

So why don’t I urge you to dump your entire wad into foreign stocks and mutual funds? Because trees don’t grow to the sky. At some point, possibly soon, foreign economies (many of which depend heavily one exports) will react to the slowdown in orders from their biggest customer, the United States.

That’s when you’ll be glad you own some U.S. multinationals that can take advantage of the weak dollar by shipping goods overseas. Foreign companies that try to send goods here, with price tags inflated by “hard” currency, will face a tougher go of it.

Another, though smaller, benefit of using American stocks to roam the world has to do with dividends. Most foreign governments impose a withholding tax on dividends paid to U.S. investors. You can recoup the tax if you hold a foreign stock in a taxable account, but not in a retirement account. Thus, multinational U.S. companies provide an extra measure of tax efficiency if you’re investing for retirement.

Americans on the World Stage

Happily, in Profitable Investing’s model portfolio we already own a clutch of world-class American businesses that derive a large percentage of their revenues and profits from international trade. If you’ve got extra cash jingling in your pocket, consider adding to the following names (or initiating a position if you haven’t climbed aboard yet):

• Stock #1: This management consulting and technology-outsourcing firm employs 170,000 people in 49 countries—a true global behemoth. In the most recent fiscal year (ended August 31), a solid majority of their revenues came from overseas, magnifying the company’s profits translated into dollars. Earnings per share for the year, after adjusting for one-time items, exploded 22%. Another double-digit gain seems likely in 2008.
• Stock #2: When I look at the numbers for the world’s premier overnight freight carrier, I have to rub my eyes. Granted, they have felt the slowing of the U.S. economy of late. But 40% or more of the company’s business originates internationally. On our recent InvestorPlace Mediterranean cruise, I saw FedEx trucks swarming over Europe. If there’s a hall of fame for globalization, this outfit (along with McDonald’s and Coke) surely belongs in it.
• Stock #3:  Americans aren’t the only people in the world who need artificial hips, knees and joints. In fact, this global leader in orthopedic implants, picks up about 40% of its sales from outside the Americas (North and South).  I’m expecting it to close the year with about a 14% increase in profits, net of special items. We can look forward to another 8%–10% gain in 2008—well above what most large corporations are likely to earn.
• Stock #4: In many ways, this they are the original globetrotting American company.  Overseas business makes up well over half of their annual sales. Yet there’s a lot more to like about them besides international exposure. Over the past decade, they have transformed themselves from primarily a computer-hardware manufacturer (a tough market niche, with wide cyclical fluctuations) into predominantly a software-and-services provider. As a result, they are now posting much more stable earnings growth. In turn, the enormous cash flow is enabling the company to buy back stock at an astounding clip.

Now that you know some of the best “global” investments right now are sitting in your own backyard—make a tidy fortune in the next 6–12 months, at modest risk, with the stocks of these giant American multinational corporations.  All four of the stocks listed here are capable of delivering a 25% (or greater) return in the year ahead.

Richard Band uncovers the names of these four blue chip multinational companies in his December issue of Profitable Investing.  It’s available immediately online when you accept a risk-free trial subscription to his award-winning investing service! Richard Band’s recommendations for conservative investors have grown 900% since 1984! Don’t miss out! Click here to get started today!