“Buy American” isn’t only an admonition in support of U.S. manufacturers. In recent years, it’s also been the best advice for stock investors.

U.S. stocks have radically outperformed shares of non-U.S. companies, driven by the superior performance of the U.S. economy relative to Europe, as well as our diversification relative to energy-heavy markets such as Canada’s and Russia’s. Even the once-soaring BRIC markets have suffered of late, as the rate of economic growth in China, India and Brazil has slowed considerably, with storm clouds on the horizon.

#-ad_banner-#The numbers tell the story: for the three years ended April 30, the S&P 500 generated a total return of 39%, vs. 3.7% for the MSCI EAFE Index (EFA) of international stocks. That outperformance has dampened American investors’ enthusiasm for foreign stocks. The U.S. dollar’s strong rally during that period only reinforced the bias. 

But in recent weeks the dollar has dipped, signaling that the euro and other currencies are staging a cyclical comeback. And in a larger sense, ignoring the rest of the world means writing off dozens of excellent companies — some of which do significant business in the United States.

So let’s take a look at two such stocks that represent attractive buys today.

Siemens (OTC: SIEGY) is one of the world’s largest electrical engineering and manufacturing companies. The German company’s vast array of products includes equipment for the oil and gas industry, electric utility and transmission companies, wind and solar energy producers, and the transportation, manufacturing, construction and healthcare sectors. 

Last week, Siemens reported second-quarter earnings that were better than expected, with solid gains for manufacturing revenue making up for continued weakness from the energy sector. But I’m more interested in the company’s long-run prospects to participate in the boom in wind and solar energy. Like its U.S. rival General Electric (NYSE: GE), Siemens is a major producer of energy infrastructure that will be needed by countries around the world as they build out cleaner electricity generation platforms in the coming decade.

At recent levels, Siemens trades at only 14.2 times analysts’ consensus estimate for 2016 earnings per share. That’s not a screaming bargain, but it’s a reasonable entry point for this global leader with a bright future.

Teva Pharmaceutical Industries (Nasdaq: TEVA), based in Israel, is the world’s #1 maker of generic drugs. As such, it has benefited enormously from concern about rising healthcare costs, especially for vital medicines. As the Baby Boom generation ages, demand for prescription drugs is soaring — and generic alternatives allow for treatment of chronic conditions at a much lower price. 

An innovative and well-managed company, Teva moved aggressively to build state-of-the-art labs and production facilities that allowed it to introduce generic versions of blockbuster drugs as soon as their patent expired. The company also has a branded-drug business, which now accounts for nearly half of revenue; its leading product is Copaxone, the world’s top multiple sclerosis treatment. Teva has also grown through acquisitions, including IVAX (2006), Barr Pharmaceuticals (2008), Ratiopharm (2010) and Cephalon (2011). It’s in the middle of one of its most ambitious: buying Allergan’s generic-drug segment for $40.5 billion; the deal is expected to close in June. 

Once a market darling, Teva has slumped over the past year on a general decline for generic drug makers, who face strong competition and falling prices in many markets. But I think investors were forgetting that Teva is transforming into a specialty drug maker that sells both generics and branded products (which carry higher profit margins). The stock began to rally this week after the company announced its second-quarter earnings earlier this week; earnings beat analysts’ estimate and demonstrated that profit margins are rising.

Teva’s long-term potential remains bright given rising demand for prescription drugs. At recent prices, the stock trades at less than 10 times analysts’ consensus estimate for 2016 earnings per share. This is an interesting bet on a turnaround for a once-hot stock that has struggled despite continued success for the company.

Risks To Consider: Siemens’ results in the short term will continue to be dragged down by the weak oil and gas sector. Worse-than-expected global economic weakness, particularly for manufacturing, could also hurt the company. Teva faces risk from its not-yet-completed acquisition of Allergan’s generics unit; the company’s perception among investors also could be hurt by price wars among generics manufacturers.
    
Action To Take: Buy Siemens below $107 and Teva Pharmaceuticals below $55.

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