Is the Glencore share price a long-term play?
Shares of Glencore (LSE: GLEN) have underperformed the FTSE 100 over the last year, falling 24% while the index has been essentially flat over the same period. Is the current price a good entry point to the mining and commodity trading giant, or should investors stay away? It is difficult to say when or if the problem will go away, so I won’t attempt to forecast that either way. However, there is another reason behind the recent share price weakness, and that has been poor financial results. Moreover, governments and institutional investors have increased pressure on Glencore and other mining companies to change their models in order to address the issue of climate change. For instance, production of coal, a particularly-high margin commodity for Glencore, is going to be capped at current levels, meaning that management will have to look elsewhere for ways to increase the bottom line.