Investing.com | Nov 13, 2020 05:24
November has so far been a good month for investors in a number of stocks both in US and UK markets, including commodity trading and mining giant Glencore (LON:GLEN) (OTC:GLNCY). So far in the month, the shares are up over 20%.
Switzerland-headquartered FTSE 100 member, Glencore is regarded as a giant in the commodities sector. Its history goes to the 1970s and it employs around 160,000 worldwide in over 35 countries.
Glencore's 150 mining and metallurgical sites, as well as oil production assets, make up most of the operations.
Metals and minerals assets include copper, cobalt, nickel, zinc and lead, ferroalloys, aluminum, iron ore, gold and silver.
Thermal coal, crude oil, oil products and natural gas are among the energy products.
Glencore's marketing activities differentiate the group from producers. In other words, it physically sources commodities from other suppliers and sells to global customers.
Despite a strong month so far, year-to-date (YTD), GLEN stock is down about 21%. On Nov. 12, the stock closed at 188.58p ($4.88 for US-based stock).
Despite the decline in 2020, we must note that the shares have had a strong comeback since the lows hit in March.
The reason for this drop was mostly the pandemic, which meant a pause in some mining operations during various lockdowns. The company also incurred high storage costs for energy products.
In early August, the group released its half-year report. CEO Ivan Glasenberg said:
"we are pleased to announce an overall strong financial performance from our various businesses, reflecting the countercyclical earnings power from our large scale Marketing activities, combined with a cash generative industrial asset base, which quickly adapted to the changed environment."
Despite his optimism, net loss was $2.6 billion. A year ago, it reported a gain of $226 million. Management also canceled the interim-dividend as it wants to reduce its debt.
We believe GLEN stock offers an acceptable margin of safety for long-term investors. In other words, most of the bad news has already been factored into the price.
Forward P/E, P/S, and P/B ratios stand at 11.68, 0.19, and 0.92, respectively. Therefore, we'd look to buy the dips.
Those investors who are not ready to commit capital into the commodity giant may also consider exchange-traded funds (ETFs) that also have Glencore as a holding. As most of these funds offer juicy dividend payments, they could appeal to passive income seekers, too.
Examples of such funds include:
These funds offer access to a range of both US and global companies, such as:
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