Glencore’s (LSE: GLEN) share price has tanked lately. Presently, the shares are buying and selling about 40% off their highs and at ranges final seen in September 2021.

Is now the time to think about shopping for this FTSE 100 inventory? Let’s talk about.

A play on copper

In concept, Glencore has a gorgeous long-term outlook. That’s as a result of it’s a serious producer of copper.

Within the years and many years forward, copper demand is forecast to extend considerably. The worldwide shift to wash vitality, a rise within the variety of electrical autos (EVs) on the highway, and a rise in information centres are anticipated to be among the key development drivers.

The EV growth, specifically, is price highlighting. Whereas a conventional automobile makes use of round 20-25 kilograms of copper, an EV makes use of about 80-85 kilograms so demand right here is more likely to be excessive.

Information centre demand additionally seems like it’ll develop considerably. In keeping with BHP, the quantity of copper utilized in information centres is about to develop six-fold by 2050.

Unpredictable earnings

The issue with Glencore from an funding perspective, nevertheless, is that it’s very unpredictable. With this firm (which produces a variety of commodities together with nickel, zinc, and coal), there’s no assure of income and revenue development (which is what drives an organization’s share price increased in the long term) because of the truth that commodity costs are inclined to swing round wildly.

This was illustrated earlier this week when the corporate posted its full-year outcomes for 2024. On account of weak coal costs and impairment fees, the numbers had been poor.

For the yr, adjusted earnings earlier than curiosity and tax (EBIT) got here in at $6.9bn – down a whopping 33% yr on yr. In the meantime, the group posted a web lack of $1.6bn versus a revenue of $4.3bn a yr earlier.

Trading uncertainty

One different concern to concentrate on with Glencore is that it’s not only a commodity producer. It additionally engages in commodity buying and selling, like an funding financial institution or hedge fund.

This provides one other layer of uncertainty for traders. Even when commodity costs had been to rise, there are not any ensures that the inventory would do properly as a result of the corporate might expertise buying and selling losses.

It’s price noting right here that during the last yr, the price of copper has risen almost 20%. But over this timeframe, Glencore’s share price is down about 16%.

Dividend revenue?

What about dividends although? Might the inventory be a great play for revenue?

Properly, for 2025, the corporate is anticipated to pay out 21.8 cents per share to traders. That interprets to a yield of round 4.9% proper now.

Nevertheless, I’d take this forecast with a pinch of salt. Glencore’s payout tends to fluctuate closely from yr to yr as a result of its earnings fluctuate, and in recent times, the corporate has slashed its payout closely on a number of events.

Higher shares to purchase?

Now, in fact, there’s an opportunity that Glencore shares might do properly within the years forward. Previously, there have been instances the place the share price has surged.

Nevertheless, for me, they’re too unpredictable. I feel there are higher shares to think about shopping for.