I’m beginning to think Glencore (LSE: GLEN) shares have a grudge against me.
Maybe I’m paranoid, but they’ve inflicted so much damage on my self-invested personal pension, I’m convinced they’re out to blight my retirement.
They’re not my worst performer. Aston Martin and Ocado Group having inflicted even more misery. But I don’t take that personally. Those two play twisted mind games with every investor.
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I accept that others are suffering at the hands of the Glencore share price. It’s down 14.5% over the last 12 months. But my personal loss has now topped 30%. Why do they hate me so?
Can this FTSE 100 stock show me some love?
All I’ve done is shower Glencore with love and admiration. I’ve written several articles praising the FTSE 100 mining and commodities trading giant.
I said its troubles aren’t its fault. It’s all down to China buying less of its production as the world’s second biggest economy slows.
I’ve talked up its prospects – once China revives, the global economy recovers and the green transition boosts demand for lithium, copper, manganese and rare earths.
I’ve tried to see the positives of holding Glencore shares, such as the dividend. I’ve even overlooked the fact that the trailing yield has slumped to 2.47%, so I’m pinning my hopes on getting a bumper ‘special’ in the spring.
My reward? The Glencore share price dropped another 10% in the last month. Okay, so that’s not as bad as Aston Martin and Ocado, down 20% and 16%, respectively. Like I said, I knew what I was letting myself in for with those two.
On 19 February, the Glencore board pulled out the big one. It announced that it was considering swapping its primary London listing for New York, or anywhere else it can “get the right valuation”, according to chief executive Gary Nagle.
That’s all the rage today, threatening poor beleaguered London, while gushing about how much greener the grass looks Stateside.
If Nagle was hoping it would lift the share price, he was disappointed. Instead, it plunged. If even the New York magic trick doesn’t work for Glencore, what will?
It didn’t help that at the same time, Nagle unveiled a sharp drop in its annual core earnings, amid weaker coal prices.
I’m looking forward to some dividends now
Analysts knew Glencore’s adjusted earnings before interest, tax, depreciation and amortisation would fall. They expected $14.55bn. Instead, they got $14.36bn, a 16% drop year on year. Listing in rainy London had nothing to do with that.
The Glencore share price continues to persecute me but at least I’ll be getting more dividends soon.
The board is going to pay out $1.2bn together with a “top-up” buyback of $1bn before first-half results on 6 August. At that point shareholders can expect further returns, as Nagle divvies up a healthy $4.8bn of free cash flow.
That’s something to hang my hat on. I’ve no idea when the share price will stop tormenting me. It could take months, maybe years. But at least Glencore is giving me a reason to stick around. Unless it’s playing me for a sucker again.
