Member Info for danl90

Great result Qz. Unfortunately for me I’d been trading from around this level up to 295(ish) so I’ve be caught out by the recent dip

Hoping this is on the way back to £3

Any insight if this might close a few mines (hopefully not glen ones)?

Possibly could spike copper. Along with Suez this could be a decent time to be a commodities trader - oh we are!

@sharprite I agree that debt is definitely the issue on the down days

My point re coal was that it will hold back the top end valuation so not a factor for today but it is when this current upset is over ie glen could be valued with a higher EV/EBITDA multiple

Also a coal spin off would likely get in enough cash to take the lions share of the debt

I’d have one good year of coal. Then spin away

Well I think glens overall top end valuation is being held back by coal as so many big investors won’t hold a coal asset. Today’s fall and like most times glen falls more than the market for me is the debt

The market views glen as very highly geared even take out the marketing debt (which for me isn’t debt) at $16billion we are at 1.6x last year EBITDA. I know that’s daft as EBITDA this year should be higher (price increases) but I think it’s the drag

For me as billy said the coal deals were perhaps Ivan’s mistake and also not viewing debt as an issue, until it was almost too late.

But for me this means the next 12 months are all buying opportunities as these dips based on debt will hopefully be gone in the near future. I would rather debt repayments than specials (that might be unpopular)

https://www.glencore.com/dam/jcr:6738b004-2209-47bb-b541-6fafd3b0829c/20210216-GLEN-FY-2020-Results-Presentation.pdf

Pg14 - 10% atm but agree this will rise as price is up (but so will other metals etc)

Get 1 good year out of it $3billion EBITDA is a nice chunk of change and then spin it off (would be a steal for who buys it)

I think coal is 10% of profits (falling to 5% over next few years) but if cutting this off means you gain 1 or 2 turns on the EV/ EBITDA multiple then it’s worth it

I think that’s where glen will end up. A smaller more metal and trading focused business with reduced debt. Will cause a huge re rate. Coal will have to go at some point. As with most things you have to sell just before the top

Mind blowing numbers! Absolutely mind blowing. As you say what impact are we ever going to make vs that level of construction

My hope is that glen rides the coal price for 6-12 months and then we sell the division as the start of a peak cycle

Get a decent penny for it and then get a huge re rating. Oh and take a huge chunk of the debt out

It’s all exciting

The issue though billy is not that coal doesn’t or won’t make money. It’s that a lot of investors won’t invest in companies associated to coal.

The irony is although we’d be less profitable glen would be worth a lot more with coal spun off.

This could be a very easy win for the new ceo to get this close to £4. But he, like Ivan, is a coal man

because this is shocking yet when the lights go out and millions go hungry that will equally be shocking!

I'm long here as I think the world is sleepwalking into one of the biggest commodity crunches we will ever see

ESG and green driving the need for commodities etc but ESG and green are stopping mines being brought on stream etc

Same is for coal. People want alternatives but then aren't aware of what's needed to produce those alternatives

Makes glen a winner although the catch 22 is our stock will re-rate if we spin off coal (hopefully we are just choosing the right time to do so!)

does feel like further to fall! very annoying but as you say copper is appearing all over the place atm

There is an article (i can't find link now) saying construction season is starting for china and globally. This should see a drag on inventory so any copper showing up now likely has a destination

https://www.miningweekly.com/article/trafigura-sees-green-copper-supercycle-driving-prices-to-15-000-2021-03-23/rep_id:3650

Dips like today (or in the coming weeks) will be times to buy in my view. It feels like the market is forgetting that copper is at $9,000 despite a lot of stock appearing on the LME

Biden pushing for infrastructure will drive the link above

Any one want to guess the EBITDA for Glen with copper at this price? I don't think we will be too worried about our debt in 12 months time!

https://www.google.com/amp/s/www.marketwatch.com/amp/story/biden-team-preparing-to-recommend-up-to-3-trillion-in-new-spending-for-economy-report-2021-03-22

Thinking you'll see that soon. Really think the market is underestimating miners and particular glen atm

The level of cash flow atm will be immense and trading should have done well from the fast run in oil prices

Sold my holding up at 170p. I was really keen on this stock but I now worry if the FX won't come back as the door on o'seas travel this year might be gone

Thoughts...

Very true

https://www.google.com/amp/s/www.barrons.com/amp/articles/glencore-gets-an-upgrade-from-jpmorgan-because-its-heavily-exposed-to-commodity-prices-51614010684

JP Morgan mention that inflation is positive for miners

“Miners in the Europe, the Middle East and Africa region are cheap and “high-yielding reflation proxies,” the investment bank’s analysts said. They added that mining stocks are positively correlated to rising bond yields”

For me I think the drag is the debt. As I say I’ve no worries on glens debt but I sort of feel that glen has played against the market on this basis for too long and might as well just play the game and take that worry off the table

No doubt at all the business is extremely cash generative atm. The industry has been burnt too many times to surely be stupid enough to invest or do M&A at the top of the cycle again? We hope :)

$17billion EBITDA this year! The £ is drag but this stock is cheap as chips

Worth reading the Jan trading update again as your comments here aren’t correct

I think you’ve right here billy. Glen is undervalued given where copper is heading but I think this is purely a reflection of the inflation trade.

Due to worries in the past (and never getting back to ipo price) I think glen will always suffer volatility and we are in that phase atm. New inventory at LME hasn’t helped this week but hopefully that will clear as as you say there seems to be a lot of demand

With the dollar rising atm (relative to £) I’d be happy with glen just focusing on paying down debt. Although I disagree the market views glen as having too much debt so perhaps if we clear that beyond the current range then the volatility in the stock reduces

Trading again will be a blessing for glen. In my view that part of the business is undervalued

Seem to be swelling at the LME

Also good you mention cards - I think they must have order those fancy cameras - up 10%

Of course the pics are important I think the bit you miss is the "idea" around value creation. Asos isn't worth £5billion because it knows how to take pictures. I think you confusing a small detail point with the "idea" of what the business is trying to achieve (ie it's strategy) and how it's trying to achieve it (it's equity story) and then what drives that ability to execute (business model and platform)

These are the big ideas - you think JL is sat wondering what cameras to use?

As I say it's not just me who shares this view (CEO's, funds, analysts etc) basically everyone except rag