Member Info for Just_My_Opinions

Remember Investec released a report doubting Glencore's ability to even service the debt, never mind pay it off. So they've absolutely proven Investec wrong. Investec's analysis was the main reason the share price tanked like it did.

2015 Net borrowings was $44,049 Millions, ($44.049 Billion) 2017 Net Borrowings on the annual report is $33,934 Millions. ($33.934 Billion) So the debt has been reduced by $10,115 Millions ($10.115 Billion) Quick bit of maths shows a 22.96% reduction in debt over 3 years. That is a very good achievement.

Page 3 under highlights... the total borrowings is sitting to the left of net debt/FFO... it's $33,934 Billion... which is "exactly" the figure showing on SimplyWall.st http://www.glencore.com/dam/jcr:62bed41c-1627-4bf5-bc43-cf5518ba1193/glen-2017-annual-report.pdf Having more debt in business isn't necessarily bad... if that debt results in massive cash generation... then there's funds to reduce that debt when times are good, so that when times are bad the company is in a strong position to whether the storm in anticipation of the next boom. Glencore is currently in that position right now, but how Ivan treats that debt now matters. He could gamble, buy more assets, mines, companies etc... that gamble might pay of, the commodities super cycle might last another 10 years before it starts to tank again. Or he could buy up assets more slowly, pay some debt off and maybe even a special dividend. Even if he decides not to pay the debt off for a while, the market won't necesarily punish the share price for it. But the slightest sign of revenue lower than expected and there could be big drops if he's not being sensible. People like to see growth, growth he is demonstrating... but he also has to strengthen the balance sheet. If there's a load of debt sitting, the next time cash generation goes down people will start to question the dividend, and any bad news can hammer the share price. Granted unless something unforeseen happens in the world, it looks like miners should keep raking the cash in for the foreseeable. But that day will come when it all goes t*ts up again.

It's not quite as simple as that though mate... Net debt to FFO doesn't take into consideration cost of current projects, so that's another reason why you can't take that figure as how much debt Glencore has. All you're interested in is the "Net Borrowings"... that's how much debt the company has. Cash generation is not guaranteed for many, many variable reasons however unlikely or likely they may be. Which is why I think he should keep paying the debt off when times are good now. He's already built an Empire, there will be some projects he should get into yes... but I don't think anything massive should be done till the debt is lowered a bit more. But then that's me, I'm pessimistic, I don't care how good something looks... the unexpected happens sometimes.

Yes the debt is 100% not below $10 Billion. Basically it's used as a way of showing analysts/credit reference agencies etc how risky a business is by showing how much it's debt is based on how much it brings in. Or how easily it can service that debt. Glencore is highly leveraged, but by increasing the leverage, or in English lending to be able to buy cash generating assets, it has a higher potential for growth. Which was my point with AAL showing as fully valued more or less, but Glen still showing a big discount. That doesn't guarantee big gains in the future, it just makes it more likely assuming the world doesn't fall apart economically again.

It's simple Billy, Glencore has debt in various forms. Until that debt is 100% paid off, that debt is still owed, it still sits on the balance sheet and it's not paid off. That Net debt to FFO figure, I took it directly off the Glencore report mate. It's just a way of saying look we have X amount of debt, but we bring in Y amount of cash, so if we wanted to we could reduce our debt to $8552 Million. That doesn't mean they have done so, it just means they could. Say for example I had a small business with �70k cash from operations each year, but I needed a �100k loan to aqcuire something for the business. My net debt to FFO would be �30k, because I have �70k cash from operations, but I still have the �100k loan sitting on my balance sheet. Just because I could pay �70k off, doesn't mean I will. Glencore hasn't paid it off mate... in theory it could, but it hasn't. But Glencore "is" reducing it's debt at a decent rate I would say. It's proved the naysayers wrong that it is a going concern, that it can meet it's obligations and it can also pay extra off. It's hard to say a company is about to fail when it can do that, hence why Mr Hargreaves got his fingers burnt. But that doesn't mean it will always be that way, Mining is Cyclical... if a massive global economic downturn happened for whatever reason, that debt is suddenly a lot harder to handle. Hence why he should continue to show the market he is reducing the debt, and therefor lowering Glencore's Net Gearing.

I think I've found what ever you read was on about mate... the Net debt to FFO is $8552 Million. Net debt to FFO is the ratio between the net debt and total funds from operations, so basically the ability of the company to pay off it's net debts using funds from operations. Obviously Glencore generates a massive amount of cash from operations, so this is why the Net debt to FFO is below $10 Billion. But if the article you read wasn't worded that way I would say it's misleading, as the funds generated from operations is purely dependent on operational performance and the amount of cash generated. Obviously if something very serious happened in the world that caused people, companies and countries to stop spending as much that would affect the cash from operations. So going back to what I said earlier, I think Ivan still needs to show he is paying the debt off. There is no point in having a low net debt to FFO meaning debt can be paid off from operations, but not actually pay any debt off. Obviously Glen has been paying the debt off, but I hope it's not been a tick box exercise to get the negative analysis from the likes of Investec of their back... he can just say look we've been paying it off, people like that then suddenly stop and start going on a buying spree again. He's done well to acquire the assets Glencore has, but I think it's time to focus on strengthening the balance sheet substantially to build a massive and very strong company. Just my opinion

Billy it's not $10Billion mate, the debt's not been reduced by $40 Billion in 3 years. SimplyWall.st has the debt at $33.9 Billion mate. So Ivan has demonstrated to the market that Glencore can meet it's obligations and pay extra off with the strong cash flow Glencore has. I would assume that figure takes into consideration bond debt etc. Debt is debt, no matter how it's dressed up. Some debt is obviously better than others though. The London Stock Exchange itself has the liabilities far higher, so SimplyWall.st must be taking some of the debt out of the equation, maybe due to inventories etc. Here's the LSE's summary... http://www.londonstockexchange.com/exchange/prices/stocks/summary/fundamentals.html?fourWayKey=JE00B4T3BW64JEGBXSET1

In truth, I don't know... at a guess the next time there's a financial statement if it really is at the top end of estimates I wouldn't be surprised to see it announced. It would line the pockets of the major shareholders including the directors, and soften the blow somewhat for people who bought at the IPO. It's a pure guess, a guess that makes sense. Whether it happens or not, no idea. The only argument against that is whether or not the market will think Glencore is paying off it's debt at a sensible base whilst granting a dividend, because this stock is definitely highly geared. A special dividend wouldn't be justified if there weren't also showing progress with the debt. Time might be good just now, but times will change, and when they do the balance sheet needs to be healthy to avoid another nose dive like we've seen, the predators will circle if there's an economic downturn, Glen cash flow suffers and they didn't pay a decent chunk of the debt of now. I know they have been, but I don't think Ivan should take that as a signal that the market is now satisfied, stop paying it off.

SimplyWall.st has BT's discount to future cash flow at 105% based on a price of �4.18 vs current price of around �2.03. Growth is lower than it's piers though, but if the management "manage" to come up with a winning strategy, whilst cutting costs significantly that could obviously change. Even if it doesn't and growth is slower, but there's still growth. I'd expect it to slow creep towards it's valuation overtime. That doesn't mean this can't change, obviously new financial data could change the valuation. And market sentiment could go against BT taking the price lower again. But I'll hold it for better days, and buy more at past support levels if it drops more.

If was any other stock I'd say a special dividend was pure speculation from over biased holders. But since it's Glencore and the directors all have big holdings I wouldn't be surprised.

SimplyWall.st has AAL fully valued according to discount to future cash flow. But Glen at over 50% discount to future cash flow. Albeit AAL's balance sheet is in better condition with less debt... but there's more growth seen in Glencore... 654 puts it at a 69% discount to future cash flow by my calculation.

Sh*t better not say that slogan, Billy will start spitting teeth about his �34k :-)

Yeah it was me, had a spare �9 Million left over from a night out... every little helps

I'm buying and holding, not trading it... going to start doing that with most of my buys, more spare time then. Will trade small amounts on the side for fun occasionally on spread betting. SimplyWall.st has the discount to future cash flow for Glen at �6.54, I'll hold for �6 or more depending on whether or not that calculation changes, it updates based on any new financial releases.

Click on Indicators at the top. When that pops up type RSI in the search box. It will come up as Relative Strength Index

How much of Glencore's revenue is directly linked to the DRC? I can go hunting myself, just wondered if anyone had already looked into it?

At a guess I think it will go down next week until this bribery stuff is clarified. But it's Glencore, it'll probably �13 by Wednesday haha

The BBC just said the only member of Megan Markles family that will attend the wedding is her mother. Something's going on behind the scenes.

I think she's a bit twisted. Her dad for whatever reason was obviously ****ed off enough not to walk her down the isle, I suspect the heart surgery thing is made up as he was already saying he wasn't going to the wedding a couple of days before he came out with that. Maybe I'm wrong. But now she's asked Charles to walk her down the Isle. Looks a bit vindictive as if to get one up on her dad for snubbing the wedding. There's something about her, she looks like a cat that's caught a bird and doesn't want to let it go.