The Glencore share price is down 36%! Is it worth buying?

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Anna Sokolidou does not have any position in any of the shares mentioned in this article. The Motley Fool UK owns shares of and has recommended Tesla. 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. Image source: Getty Images. See all posts by Anna Sokolidou Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares The Glencore share price is down 36%! Is it worth buying? Enter Your Email Addresscenter_img The Glencore (LSE:GLEN) share price dropped dramatically because of the Covid-19 pandemic. But could the mining company’s stock fully recover and make its holders rich?   Glencore share priceGlencore specialises in the mining of cobalt, nickel, copper, zinc, lead, aluminium, gold, and silver. It also extracts oil and gas. As we all know, due to the coronavirus outbreak, lockdowns, and resulting recession, there has been quite low demand for natural resources. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…So, the commodities producers have been on sale for a while. Even though Glencore’s stock has recently seen some upsurge, it is still more than a third below the January levels.  The company’s newsTesla, an overhyped American car maker, is increasing its electric vehicle (EV) production. To do so, Tesla needs to buy cobalt, a material essential for making batteries. It signed a contract with Glencore to supply this material. But the good news for the mining company does not end here.Growing consumer interest in environmental issues has prompted many other car producers, including BMW, start producing electric vehicles. In order to do so, they also need cobalt. But this material isn’t just used for producing EVs, it is also needed by companies producing laptops and smartphones. So, Glencore is in an excellent position, since it is the leader in mining this material. However, investors should be aware of the reputational risks linked to Glencore’s cobalt production. The problem is that most cobalt comes from Congo, where child labour is used. In December 2019, the mining company even had to issue a news release saying that it did not use any forms of child labour. Is Glencore worth investors’ attention?The 2019 results were not amazing for Glencore. The mining company reported its first annual net loss in five years. Remember that there was no coronavirus lockdown in 2019. As my colleague Alan Oscroft very correctly pointed out in his February article, a couple of tough years might be ahead for Glencore. It really looks so, since the Covid-19 pandemic appears to particularly harmful to natural resources companies.In terms of dividends, it seems that the company won’t be able to announce or pay any new dividends this year and will instead try to conserve cash. So, its attractive dividend yield of over 11% it not sustainable after all.Glencore still has an investment-grade credit rating. Moody’s rates the mining company as Baa1, or lower investment grade. However, the agency noted that the company borrowed heavily in 2019 when commodity prices were quite low. At the same time, Glencore paid its shareholders substantial dividends, thus decreasing its free cash flow. Covid-19 has made the situation much worse. But Moody’s still thinks that Glencore will be cash positive in 2020 because probably not paying dividends. Since the pandemic crashed many developing countries’ currencies, some of Glencore’s costs went down too. This is because the mining company operates in these countries and has to export the commodities elsewhere.    Although Glencore could be worth buying for patient investors, I think that there are still better alternatives in the mining industry and other sectors. “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Anna Sokolidou | Friday, 19th June, 2020 | More on: GLEN I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.last_img read more