If you had invested £1,000 in the Glencore share price a year ago, this is how much it would be worth today

The Glencore share price has been on a bumpy road over the past year, writes Jonathan Smith.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Glencore (LSE: GLEN) is regularly in the top-ten list of the most traded stocks on the FTSE 100 index, reflecting both the size of the company but also the frequency of trading by short-term speculators and longer-term investors.

It is logical to conclude that a good number of our readers own or have owned Glencore shares over the past year, so it makes sense to review the recent share price performance and look into the bumpy road it has been on.

First, the numbers. If you had invested £1,000 into Glencore a year ago, when it was trading at 297.5p per share, you would currently be seeing a loss of 22.5% when comparing it to the share price of 230.55p at the close last Friday. This would mean your £1,000 is now worth £775.

When we compare this to the overall FTSE 100 index, which returned 11.3% over the same period, it is clear the share has under performed.

Sell in May and go away

As the old investment adage goes, many investors sell shares after strong performance in the first quarter of the year and come back later in the year. For Glencore, this appears to have been true, as the share price performance was healthy from January to April, but started to fall from the end of April onward. 

While this drop could be attributed to company-specific issues, it was really driven by broader sentiment in the market. This was at the time when the trade war between the US and China was escalating, along with concerns about the global economy slowing down. Due to the size and truly global nature of Glencore, the stock was hit hard by these concerns.

Into the summer, the share price was hit further following the release of half-year results. Net profit fell from $2.8bn in the previous period to $226m, which was mostly blamed on weak metals prices. It also decided to cut operations in the Democratic Republic of Congo, after various issues there continued to cause headaches. My colleague Karl wrote an interesting piece at the time, here.

This left the share price around 230p, a level at which it now sits around six months later. 

A further slump ahead?

Just when the share price was starting to stall toward the end of last year, the FT reported that the Serious Fraud office had opened an investigation into the firm due to suspicions of bribery. This was not a good note to end on, and it continues to hang over performance in the market.

With this investigation ongoing, along with rumors of job cuts, I do not feel buying into Glencore makes sense at the moment. This doesn’t mean that I would steer clear of the industry in general. Take a look at players such as Rio Tinto instead, that have had positive share price performance over the past year.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jonathan Smith and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »

Investing Articles

2 FTSE dividend shares yielding more than 6% with P/Es of less than 9!

Harvey Jones picks out two brilliant FTSE 100 dividend shares that yield more than 6% but are selling at strangely…

Read more »

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »