public offering

It’s Skin Co. Ltd., symbol 226320 on the Korean Stock Exchange, is a South Korean cosmetics and face cream company. The company first sold shares to the public in December 2015. The initial public offering (IPO) for It’s Skin was part of a widespread effort by South Korean businesses to capitalize on the “Korean wave”—the rising popularity of South Korean culture in China. This investment comes with a number of negatives. For one, it’s always difficult to break into a foreign market, especially when there are language, legal and cultural barriers. The cosmetics business is also notoriously fickle. In any event, a weakening economy in China could slow sales to that country in the near term....

IPO investing issues typically come to market when it’s a good time for the company or its insiders to sell. That’s often a bad time for you to buy

CPI Card Group, $14.30, symbol PNT on Toronto (Shares outstanding: 56.5 million; Market cap: $808.0 million; www.cpicardgroup.com), makes plastic credit and debit cards, mostly for U.S. lenders like Bank of America, American Express, Visa and MasterCard. It produces 35% of all such cards issued in the U.S. The Colorado-based company first sold shares to the public and began trading on the Toronto and Nasdaq exchanges on October 15, 2015, at $10 U.S. per share. CPI sold 15.0 million shares in its initial public offering, raising proceeds of $142.5 million U.S. It originally hoped to raise $300 million U.S. but insufficient demand forced it to cut the number of shares it sold and their price. The company is benefiting as the U.S. shifts to debit and credit cards that use chip-and-PIN technology and away from magnetic stripes. This change accelerated with the EMV (EuroPay, MasterCard and Visa) payment networks’ liability shift, which came into effect in the U.S. on October 1, 2015....

VISA INC., $78.75, New York symbol V, set up its European operations (Visa Europe) as an independent firm in 2008. Over 3,700 European banks own this business, which uses Visa’s brand and payment networks under a licensing deal. This week, Visa agreed to buy Visa Europe. Under the deal, it will pay 11.5 billion euros in cash (1 euro = $1.07 U.S.) plus stock worth 5 billion euros. Depending on Visa Europe’s future results, Visa may have to pay an additional 4.7 billion euros at the end of four years. Visa’s balance sheet is strong, so it can comfortably afford this purchase. As of September 30, 2015, it held cash of $3.5 billion and was debt-free....

Hydro One Inc. is an electricity transmission and distribution utility owned by the province of Ontario. It owns and operates 96% of Ontario’s electricity-transmission capacity, serving 1.4 million customers through its 29,000 kilometres of power lines. Transmission refers to the delivery of electricity over high-voltage lines, typically over long distances, from generating stations to local areas and industrial customers. Distribution refers to the delivery of electricity over low-voltage lines to users such as homes, businesses and institutions. Hydro One doesn’t generate electricity. Ontario Power Generation, also owned by the province of Ontario, supplies about 50% of the province’s power. Companies like Northland Power, TransAlta and TransCanada Corp., along with small independent producers, supply the rest....

Our view of one of the world’s largest mining stocks, Freeport-McMoRan, as activist investor Carl Icahn buys in and presses for change.

Freeport-McMoRan Inc., $11.18, symbol FCX on New York (Shares outstanding: 1.1 billion; Market cap: $12.7 billion; www.fcx.com), is a leading producer of copper, gold and other metals from mines in the U.S., Indonesia, Africa and South America.

In 2013, the company diversified into oil and natural gas by acquiring McMoRan Exploration and Plains Exploration & Production, which have properties in Louisiana, Wyoming and California, as well as wells in the Gulf of Mexico. Freeport paid a total of $9 billion for both companies.

In 2014, copper supplied 60% of Freeport’s revenue, followed by oil and gas, 20%; gold, 7%; molybdenum (which strengthens and prevents rust in alloys and high-temperature steels), 6%; and other minerals, 7%.

The U.S. accounted for 48% of total revenue, followed by Indonesia (8%), Japan (7%), Spain (6%), China (5%), Switzerland (4%), Chile (3%), Turkey (2%) and South Korea (2%). Other countries supplied the remaining 15%.

In the three months ended June 30, 2015, Freeport lost $1.85 billion, or $1.78 a share, after the plunge in oil and gas prices forced it to write down its oil and gas holdings by $2.7 billion. Without unusual items, the company earned $143 million, or $0.14 a share, down 70.3% from $482 million, or $0.46, a year earlier.

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Tucows, $30.88, symbol TC on Toronto (Shares outstanding: 11.0 million; Market cap: $340.9 million; www.tucows.com), provides network access, domain names and other Internet services, such as email hosting, through its OpenSRS division. OpenSRS manages over 14 million domain names, while the company’s Ting subsidiary offers mobile phone service to individuals and small businesses. In the three months ended June 30, 2015, Tucows’ revenue rose 20.5%, to $42.9 million from $35.6 million a year earlier (all figures except share price and market cap in U.S. dollars). Earnings per share jumped to $0.21 from $0.12....

BOMBARDIER INC. (Toronto symbols BBD.A $1.53 and BBD.B $1.46; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.2 billion; Market cap: $3.2 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) owns 50% of a joint venture in China that has won an order to build 15 high speed passenger trains for that country’s rail system. The company’s share of the $381- million U.S. contract is $190.5 million U.S., or 1% of its annual revenue.

Deals like this enhance the prospects of the railcar division as Bombardier prepares to sell part of it in an initial public offering later this year.

Bombardier is still a hold.

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BOMBARDIER INC., Toronto symbols BBD.A $1.89 and BBD.B $1.86, jumped 42% this week in response to media reports that a Chinese company has offered to buy a majority stake in its passenger-railcar business, Bombardier Transportation. The reported price of $7 billion U.S. to $8 billion U.S. is roughly 2.4 times Bombardier’s $4.2-billion (Canadian) market cap (or the value of all of its outstanding shares). The company has denied that it plans to sell the railcar business. However, it still intends to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake....