[On :Freetrade:] Glencore - GLEN 🕵 💰

Don’t think there’s a thread for Glencore, the commodities giant and my first pick (ahem) in the Stock Prediction League.

Here’s some info about them from my fave weekend read:

And here’s some latest news…

:arrow_double_down:

I’ve had Glencore in my portfolio for a while now (consistently in the red) and only yesterday they have dropped even further. The UK investigating into suspicions of bribery & the stock market as a whole not doing so great at the moment all contributing to the drop. Just wanted to know who else has got Glencore shares and what your suggestions are; hold, buy more or sell.

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I hold Glencore.

I’m buying more whilst they’re so cheap. The “Rich Kids” have nearly all left now, with Glasenburg hinting that he’ll be off soon. They’ve got tons of potential still and this isn’t the first controversy they’ve been through - far from it. They’re also paying down their debts aggressively.

I’m super bullish on basically anything needed to make energy storage or EV. So copper, nickel, cobalt etc. Glencore does all of this and has the money to continue to do so.

Simply Wall St indicates that whilst risky, they could have a huge future:

Might be a case of holding your nose though!

Sven Carlin has done a great video on copper stocks here and discusses which of the miners are the lowest cost (so still make a profit, despite the copper price being low ((and the trade war))).

There’s also a follow up here:

Of course…there’s a decent yield too. Whether that will stay during the litigation is anyone’s guess.

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Glasenberg is off!

I wonder who will replace him,

Potentially a nice bit of synergy for some shareholders here?

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Nice!

Nice write up. Glencore up 5% for me!

Not good news for a company with so much debt, net debt up 20%. Earnings faltering.

20c dividend though :man_shrugging:

Some more Glencore news:

And

Simply Wall St now indicating Glencore is 50% undervalued

https://simplywall.st/stocks/gb/materials/lse-glen/glencore-shares/news/an-intrinsic-calculation-for-glencore-plc-longlen-suggests-its-50-undervalued/

Anyone buying Glencore at present? I suppose it’s getting quite attractive for dividend investors with its yield creeping over 7%.

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.

‘Facts…’

Coal… seriously?

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.

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