I am buying more glencore shares looking to the next 5years. I see a lot of growth coming from South America, Russia, India and yes China.
May seem a bold prediction as there is some way to go but I expect (and hope) this falls below 100 soon as lower commodity prices put focus on ability to service debt. Here and moreso in the oil companies, a perfect storm of ESG concerns- over investment in poor return on capital infrastructure and projects using debt- and now an unexpected significant fall in demand due to the virus, will put these companies on sale.
The ESG concerns will preclude many institutions from buying and force some current owners to sell regardless of view on long term prospects.
The debt loads raise concerns on whether a company will be able to weather a prolonged period of reduced prices, lower prices mean less or no profit and less money available to service the debt, also puts a company at risk of breaking terms agreed with lenders. Debt problems make a company less flexible and less able to invest in growth or even expenditure to maintain current resource reserves.
The reduction in demand follows from coronavirus. I would argue resource companies were still trying to reach equilibrium from ‘legacy’ investment in projects, usually debt funded 10/10+ years ago, where they assumed prices to be much higher today than they are and so commissioned much more capacity than they would have had they expected oil to be mid double digits rather than high double digits or triple. Ofcourse supply and demand are two sides of the same coin, but I would argue we have something close to structural oversupply or overcapacity even if coronavirus wasnt in play, and that now this is paired by a big short term reduction in demand.
I like glencore as a company because I dont think the markets they operate in are as sensitive to price linked production increases as oil. With the level of control they exert over many commodities, I dont think we can have a situation where the increasing price of a commodity brings in a boatload of new players like what happened with shale oil in USA. Although they may have to accept periods of lowered profit, they are still the only real player for many resources and so assuming a long term increase in consumption and demand and ignoring more ‘cyclical’ changes I think they will be ok and will likely buy if we get under 100, otherwise I will take the L of a missed opportunity.
Trading house Glencore (GLEN.L) has chartered the 3 million barrel crude carrier ‘Europe’ to store oil at sea for at least 6 months, trading sources on Tuesday.
The vessel is one of two so-called ultra large crude carriers (ULCC), the largest tankers in the world.
Glencore booked the vessel at a rate of $37,000 a day for the first six months, according to the sources.
Could be good news🤷
Is there any new news on the battery factory?? Technology minerals has just opened there first battery recycling plant
Hmm price crash … but the dip or buy the dip
Everytime I try to edit a post it never works.
Dividend due Thursday guys
Got my dividend and notification today.
Declared today 7.02% dividend yield for 2023:
18% increase over last year 70% increase over last year excluding the special dividend.
Not bad Long may it continue
Wow that was a huge drop yesterday. Anyone else think this was linked to credit suisse - I do. Strange thing is today pre market CS is flying yet GLEN has barely pulled 1% back. Strange times I added at 4.12 - long term prospects still very sound.
Joined the party today with a 1k investment chasing dividend payments.
Anyone got the dividend yet ?
No I’m guessing it being a US stock then falling over the weekend has delayed it. It’ll come.
I checked mine this morning, No joy yet @Pazza
Think our divi is in guys. £47
£37.39 dividend just came through now