Glencore

gadgetmind

Glencore really isn't my cup of tea. Lots of debt, lots of selling things they don't have in the hope they can buy cheaper when they need to do the deal, suits doing huge acquisitions that thrown question on their judgement, and much more.

Bargain price coupled with good business model and sound management = buy. Bargain price was absence of the other two = abstain.

gadgetmind

I hope they sold Zinc futures before announcing they were cutting Zinc production.

planteria

i like wt's approach.. in a way it seems a shame to me that they are selling assets to cut costs which are going to become very profitable again before very long. but the market clearly likes these cuts, and the debt reduction is important
i held Xstrata for a good while, had a quick dip into Glencore, and now am sat on some AA shares that i bought before the downturn in commodities. i think resources are a good sector to be investing in for the long term.

atush

worldtraveller wrote: »

I like them when we see market conditions that we're seeing today.

However, as I've said before, this is a medium-long term strategy, not a short term view.

As always, time will only tell!

This is a classic approach, to buy an unloved sector when others are selling.

In the case of commodities, we will eventually see an uptic as they are vital to so many industries and eventually demand will resume at some point in the future. It has to. unless the world ends which in t hat case it wouldn't mater where or how much money you have.


The only question is how long from now?

gadgetmind

atush wrote: »

The only question is how long from now?

The big question is when (not if, in most cases) they will cut their dividends and by how much.

Glen_Clark

atush wrote: »

The only question is how long from now?

Exactly - because in the meantime mines are hemorrhaging money. Mines tend to be very expensive to open, to maintain, and to close. You don't save a lot of money by slowing down production, but you lose much of your revenue from lower volumes at lower prices.
Commodity prices are bound to recover at some point, but that point might be too far away for Glencore, Who knows?

Glen_Clark

gadgetmind wrote: »

The big question is when (not if, in most cases) they will cut their dividends and by how much.

The big question is whether they will stay solvent long enough to benefit from the inevitable recovery in commodity prices.

atush

gadgetmind wrote: »

The big question is when (not if, in most cases) they will cut their dividends and by how much.

I wasn't speaking about Glencore specifically, but commodities in general.

I agree that servicing that debt is going to affect dividends.

PeteinSQ

I know this is an old post but I wondered what people's thoughts were on Glencore now.

I've have a very small number of their shares that I bought back at 84p and today they're sat at 127p. Several analysts would suggest that they may go up to 150-160p.

I originally bought with a view to holding for up to five years but now I'm tempted to sell them and put the money into a passive fund (which is what I intend to do with 95% of my investable money).

cloud_dog

Two things... 1) It's never wrong to bank a profit ... 2) Who knows what the future holds.

Glencore announce their 2015 preliminary results on Tuesday 1st March. Depending on expectations / perceptions etc etc the SP may experience a jump up or a fall based on expectations (buy the rumour, sell the news, as the saying goes).

Just to cover all bases... it is possible the SP may remain flat (after the results)