Glencore (GLEN-LN)

First, the deal needs board approval, then Ottawa's approval. He doesn't buy commodities. GLEN has a (dirty) thermal coal business and Teck has a coal-for-steel business. Teck feels (and he agrees) that it doesn't make sense to combine these two coal businesses.

Trades on the Pink Sheets, which can be very expensive. He says 40-42% of the EBITA is exposed to batteries. He has generally been under weighted in materials as the sector has underperformed. He would give this time to watch. He likes the house, just not the neighbourhood.

Had a near-death experience because of debt, and it took a change in commodity prices for it turn. If bullish on industrial commodities, this is one you could continue to own. Has a lot of hidden assets.

It has not been without its volatility. They deleveraged in Jan/Feb this year. They continued deleveraging and if you look at them now they are one of the more unique global diversified resource plays. They are trying to conserve cash, pay off debt and sell non-core assets.

They are working hard to restructure their debt. It fell in September due to worries their derivative exposure would take them down. He would focus viewers on LUN-T and HBM-T.

He is suspect of this company. Had tried to Short it, but was late. It had a massive rally, but is still down from the beginning of the year. He just doesn’t see going in now. They have 2 businesses. One is commodity trading that has very thin margins. They need to have a very good credit rating in order to maintain that. They have a mining business that they bought at the top of the cycle. It is difficult to see how they can maintain their credit rating while the mining cycle turns down and the commodity price falls. Has a large amount of debt.

A bit of a black box. If you are looking for commodity exposure you may do ok, but there are others. It lacks transparency. Prefers others.