With copper demand accelerating and the firm’s production rising, it is generating the kind of cash flows typically rewarded with higher valuations.

Add in a cleaner balance sheet and clearer capital‑return strategy, and Glencore stands out as a compelling undervaluation prospect for long‑term investors.

So, how high could the stock go?

What are the key business drivers?

Glencore mines and trades commodities, making money at every stage of the process from shovel to shipping. Its primary focus is on becoming the world’s leading supplier of materials used in the energy transition, particularly copper.

To fund this aggressive expansion, Glencore is using the enormous cash flows generated by its coal division. The costs associated with this are minimal, as the sector is in wind-down phase, but global demand remains high.

By doing this, rather than seeking financing from loans in the capital markets, Glencore maintains a much cleaner balance sheet. Essentially, coal is bankrolling the firm’s transition to a green mining powerhouse.

What are the risks and rewards here?

Glencore’s strategy is not without its challenges. Regulatory pressure on coal could disrupt cash flows, for example. Another is geopolitical instability in key mining regions, which could delay expansion plans.

Yet global copper demand is forecast to increase by over 20% by 2030 and to double by 2050. And long-term price predictions project copper surging toward $15,000 (£11,300) per metric ton from around $13,000 now.

Given this and provided Glencore successfully channels coal‑generated cash into its transition metals portfolio, it could be one of the most profitable beneficiaries of the global energy shift.

Analysts forecast that the company’s earnings will increase by an annual average of 22% over the medium term at least. And it is ultimately this that powers any firm’s share price towards its fair value over time.

So where’s fair value for the shares?

When valuing a business, discounted cash flow (DCF) analysis remains one of the clearest ways to estimate where a stock should trade, in my experience.

It does this by projecting future cash flows and translating them into today’s money. The less straightforward those forecasts are, the heavier the discount becomes. And differing assumptions here sometimes can mean analysts’ DCF outcomes can vary occasionally.

But using my own assumptions — including an 8.5% discount rate — Glencore screens as 54% undervalued at its current £5.58 price.

That points to a fair value of £12.13 — more than twice today’s price.

This difference between price and value is critical in maximising profits, as historically shares trade to their fair value over time. So, if that trend continues, this could be a tremendous potential buying opportunity, if those DCF assumptions hold good.

My investment view

I already hold a stock (Rio Tinto) in the commodity sector, so adding another would unbalance my portfolio.

However, if I did not have this I would buy Glencore now for its strong earnings growth prospects and energy transition strategy.

For the same reasons, I think it well worth the consideration of other investors.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Simon Watkins owns shares in Rio Tinto.

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Why is the Buffett indicator so high?

The rise in the market cap-to-GDP ratio to over two times is less about a single bubble and more about concentration.

A large part of US equity gains has been driven by a small group of mega-cap technology stocks. The so-called ‘Magnificent 7′ now account for an outsized share of total market value, meaning index-level valuations are heavily skewed by a narrow set of AI-exposed companies.

That concentration reflects a broader narrative shift. Markets are increasingly trading around the AI theme, with semiconductors, cloud infrastructure, and data centre operators absorbing a disproportionate share of capital flows.

However, there are growing questions around whether the pace of investment is running ahead of monetisation. Hyperscalers are committing vast sums to AI infrastructure, but the number of clear ‘killer applications’ remains limited, and the return profile is still uncertain.

At the same time, the physical buildout is becoming more complex. Data centres face constraints around electricity supply, water usage, and local planning approvals. Some US states are actively putting the brakes on further approvals.

Even high-profile speculative listings and pre-IPO hype around companies such as SpaceX sit within this broader environment — not as the driver, but as a reflection of the same risk appetite.

An alternative way to play the AI arms race

If the AI trade is driving extreme market concentration, the obvious question is whether investors need to own the most expensive parts of that ecosystem at all.

One alternative approach is to focus on the physical constraints required to make the AI buildout possible.

Copper sits at the centre of that equation.

It’s essential for power grids, data centres, semiconductors, and electrification more broadly. Yet supply is struggling to keep pace with the scale of demand being implied by the AI investment cycle.

Copper giant

This is where Glencore (LSE: GLEN) becomes relevant.

Over the past year, copper prices have moved higher as structural supply tightness has started to emerge. In response, the miner has signalled plans to expand output through brownfield projects, with production expected to rise materially over the coming decade.

That positions the group to benefit if the current buildout phase continues, particularly if demand from data infrastructure and electrification proves more persistent than existing supply assumptions.

Importantly, this isn’t a short-term pricing story. New copper supply is slow to develop and highly capital intensive. Historically, the industry has struggled to respond quickly enough to sustained demand shocks of this scale.

The key risk is timing — both in terms of how durable AI-related demand proves to be, and how quickly new supply can realistically come online.

But if the AI narrative ultimately comes down to compute capacity and physical infrastructure, then copper is one of its most critical constraints. Glencore offers exposure not to the hype around AI itself, but to the industrial inputs required to make it happen. That’s why I view it as one to consider.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Andrew Mackie owns shares in Glencore.

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Against that backdrop, here are two FTSE 100 dividend powerhouses that I believe still deserve investors’ attention today.

Banking giant

HSBC (LSE: HSBA) is perhaps one of the clearest examples in the FTSE 100 of how strong capital allocation can drive shareholder returns.

Over the past few years, the bank has become a simpler and more focused business. It has exited lower-return operations, reduced management layers, and redirected resources towards areas where it enjoys genuine competitive advantages, particularly wealth management and transaction banking.

The result has been a significant improvement in profitability. Last year, return on tangible equity reached 17.2%, while profit before tax climbed to a record $36.6bn.

Importantly, these earnings are not simply being retained on the balance sheet. It has adopted a clear capital returns framework centred around a 50% dividend payout ratio alongside regular share buybacks.

What gives me confidence in the quality of those returns is the bank’s growing exposure to Asia and the Middle East. These regions are becoming increasingly important centres of trade, investment, and wealth creation.

The main risk is that a meaningful slowdown in Asia, particularly China, would weigh on growth and profitability. Falling interest rates could also pressure banking margins.

However, HSBC’s strong deposit base, diversified earnings streams, and disciplined capital allocation leave it well placed to continue rewarding shareholders through the cycle.

Different play

Where HSBC represents a more traditional income play, Glencore’s (LSE: GLEN) shareholder returns are increasingly being driven by capital allocation.

Management has shown a willingness to unlock value from non-core assets and return excess cash to shareholders when opportunities arise.

The recent early return of capital to shareholders following the sale of Viterra to Bunge is one such example.

Looking ahead, I think the bigger opportunity lies in copper. Electrification, grid expansion, data centres, and industrial investment are all placing growing demands on the metal. Against that backdrop, Glencore is targeting a significant increase in copper production over the next decade.

What I find attractive is that management appears to be balancing investment and shareholder returns rather than pursuing growth at any cost. The company is investing where it sees attractive long-term returns while maintaining a clear commitment to returning surplus capital when appropriate.

A clear risk is that commodity markets remain volatile. A weaker global economy or lower copper prices would reduce cash generation and could affect future distributions. But with management continuing to recycle capital and position the business towards what it sees as the most attractive commodities, I believe Glencore remains well placed to create long-term value for shareholders.

Bottom line

HSBC and Glencore operate in very different industries, but both illustrate the same principle. Strong shareholder returns are rarely the result of yield alone. More often, they are the product of disciplined capital allocation and management teams that understand when to invest, when to simplify, and when to return excess cash to investors.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Andrew Mackie owns shares in HSBC and Glencore.

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What matters more is whether fundamentals remain intact and whether the market has already priced in future earnings growth — because if it hasn’t, today’s winners may still have further to run.

Copper, the new gold

Glencore shares (LSE: GLEN) have surged over the past 12 months, with the investment case increasingly shifting towards copper.

Demand drivers are well known — electrification, grid expansion, AI-driven data centres, and a revival in industrial investment across the US and beyond.

What is changing now is the supply side. The market is beginning to recognise that future copper demand is likely to outstrip new supply by a wide margin. Glencore’s own long-term modelling suggests a structural shortfall of around 27m tonnes by 2050.

Source: Glencore

Against this backdrop, the group is targeting a major step-up in copper production, lifting output towards 1.6m tonnes by 2035. That marks a clear shift in strategy, driven by stronger pricing signals in recent years.

Risks remain. Commodity prices are inherently volatile, and any slowdown in global growth or disruption to mining operations could quickly impact earnings momentum.

Silver — a volatile metal

Fresnillo shares (LSE: FRES) have had a far more volatile ride. After a sharp spike towards $120, silver prices has since retreated and consolidated in the $70s, leaving some investors questioning whether the move has run its course.

On the surface, sentiment has cooled. But underneath, little has really changed.

Over the longer-term trend, silver has effectively moved sideways for months — a sign of consolidation rather than breakdown.

Structural demand

At the same time, structural demand pressures remain in place. Central bank buying, particularly in Asia, continues to underpin physical demand. Meanwhile, inventories across key pricing hubs such as COMEX and the London Bullion Market Association (LBMA) remain tight.

Beyond monetary demand, silver also carries an industrial profile increasingly similar to copper. It has a growing use in electrification, electronics, and energy transition technologies.

Taken together, this suggests a market still underpinned by firm long-term demand dynamics, even if short-term price action has shaken confidence. Calls for a return to $20-$30 levels look increasingly disconnected from the structural picture, in my opinion.

What matters for Fresnillo is the margin profile. With all-in sustaining costs (AISC) around $20, even mid-$70 silver prices imply very strong operating leverage, with incremental gains flowing disproportionately into profits.

Risks remain. Energy costs in particular are a key input and could erode margins if they remain elevated or rise further, alongside normal commodity price volatility.

Taken together with Glencore, both stocks sit within the same broader theme — the early stages of a potential commodities supercycle driven by structural supply constraints.

I’ve recently added to my Fresnillo holding on the pullback, having taken advantage of the weakness in the share price, which is still down around 25% from recent highs. In Glencore, I already hold a significant position, having been adding further over the past few months as the copper story has strengthened.

Should you invest £5,000 in Fresnillo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Fresnillo Plc made the list?

Andrew Mackie owns shares in Glencore and Fresnillo.

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Looking beyond the numbers

At first glance, the valuation looks difficult to justify. With profits collapsing to just $120m last year, the sky-high P/E ratio is hardly surprising.

But that headline figure tells only part of the story.

Mining stocks are rarely valued on what they earned last year alone. Investors tend to look forward — and increasingly, the market appears to believe Glencore may be entering a very different phase.

At its recent capital markets day, management outlined a more ambitious copper strategy, targeting annual production growth from around 850,000 tonnes today to 1.6m tonnes by 2035. If achieved, that would make it the world’s largest copper producer.

That matters because the miner has historically been cautious about bringing major new supply online, preferring sustained price strength over short-lived commodity spikes.

Copper prices have now risen more than 70% since early 2024. The question is why.

Why this time may be different

Copper shortages have been discussed for years. But what appears to be changing is the scale of the imbalance between future demand and known supply.

Demand is now being supported by several long-term trends at once. Electrification, grid expansion, data infrastructure, and industrial investment all require large amounts of copper. Yet bringing new supply online remains slow, capital intensive and increasingly difficult.

That creates a problem for the industry. Existing mines are ageing, new discoveries are harder to develop and large projects can take well over a decade to reach production. Even with announced developments, forecast supply still appears well short of expected demand over the coming decades.

This is why copper prices matter so much. If supply cannot respond quickly enough, sustained higher prices may be required to encourage new production and close the gap.

For companies with existing resources and expansion options already in place, that backdrop could prove increasingly valuable.

So if the copper story looks compelling, where could investors still get caught out?

What could go wrong?

The most immediate risk is timing. While the copper narrative is compelling, large-scale supply responses take years to deliver and depend on successful execution across multiple jurisdictions. Any delays in permitting, capital allocation, or project ramp-up could slow the path to higher production.

There is also the risk that commodity prices do not cooperate. Even in a structural deficit, volatility remains high and weaker-than-expected pricing could delay investment decisions or compress returns.

Finally, operational delivery matters. With growth spread across multiple regions, complexity increases — and with it, the potential for cost overruns or disruption at key assets.

Closing remarks

To me, the market is still underestimating how far copper dynamics could run if structural deficits persist. Glencore is increasingly positioned not just as a cyclical miner, but as a leveraged way to acccess that theme through scale and optionality. I have been adding to my own position recently, and I think it remains one for investors to consider for long-term exposure to the copper story.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Andrew Mackie owns shares in Glencore.

The post Up 103% with a P/E of 261 — is this FTSE 100 stock still worth buying? appeared first on The Twelfth Magpie.

Mining stocks move in cycles. It takes years to locate a mine, secure permission and build it, yet the subsequent revenues can swing wildly with commodity prices and demand. So I decided to buy Glencore at a time when the shares looked unloved, then sit tight for the cyclical upswing.

That recovery has now arrived with a vengeance. Astonishingly, the Glencore share price has surged 110% over the last 12 months. Throw in the 2.25% trailing dividend yield and a £12,750 investment would have turned into £27,094, ignoring charges. That’s a spectacular one-year return, which shows the growth potential of FTSE 100 shares.

Can this FTSE 100 stock continue to soar?

I’m thrilled, but frustrated too. My shares dropped 40% before rebounding, so my overall gain stands closer to 25%. These are still early days though. I plan to hold for years.

The stock took a hammering last year as US tariffs and fears over global growth crushed mining shares. Since then, sentiment has flipped. The Iran conflict has barely dented momentum.

Glencore’s full-year results published on 18 February, before the war began, beat expectations. Revenue climbed 7% to $248bn as strong copper and gold prices lifted the metals division. Lower coal and energy prices hurt operating cash flow, which fell from $3.8bn to $1.8bn.

Net debt held steady at $11.2bn. That debt pile looks manageable to me given Glencore’s size and cash-generating ability, but commodity downturns can quickly stretch miners when profits fall.

Management still rewarded investors with $2bn of share buybacks as part of a total shareholder return package worth $3.5bn. There’s more on the way in 2026.

Copper remains the big attraction. Glencore keeps ramping up production as electrification, renewable energy and artificial intelligence drive soaring demand. Data centres consume vast quantities of copper and investors view the metal as a long-term structural growth story.

The group also owns a huge commodity trading operation. Volatile markets often create opportunities for traders as prices swing sharply between regions and supply chains tighten.

But is it too expensive to buy today?

Coal remains controversial because it generates huge carbon emissions and is in the political firing line as governments pursue net zero targets. Yet it still throws off enormous profits and continues to power large parts of the global economy.

Inflation and geopolitical turmoil usually support commodity prices because hard assets often hold value when currencies weaken and supply chains seize up. Here’s my key concern. After such a ferocious rally, investors risk buying this stock closer to the top of the cycle, than the bottom. The trailing price-to-earnings (P/E) ratio has soared to a dizzying 73.

Despite that, I think there’s an opportunity here. The forward P/E looks far more reasonable at 13.8. I’ll keep watching Glencore closely. I still think it should outperform the wider market over time. But after the recent spike, I’d suggest investors considering it approach with caution, and drip-feed money instead of diving in all at once.

Should you invest £5,000 in Glencore Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

Harvey Jones owns shares in Glencore

The post See what £12,750 invested in red-hot Glencore shares 1 year ago is worth today… appeared first on The Twelfth Magpie.

So what should investors be doing in a market increasingly dominated by a narrow group of mega-cap technology stocks?

Stock market risks are building — but the trend is still intact

The US stock market continues to trade at elevated levels. One widely watched valuation measure — the so-called Warren Buffett indicator, which compares total market capitalisation to GDP — is currently above 200%.

A significant share of recent gains continues to be driven by semiconductor stocks and the large hyperscalers, as investment into AI infrastructure accelerates across the sector.

At the same time, broader macro risks remain in the background. Energy prices, geopolitical uncertainty, and the path of inflation are still unresolved, even if markets are currently looking through them.

As veteran market observer Bob Farrell once noted:

Parabolic moves tend to go further than people think, but they do not correct by going sideways.

In other words, strong trends can persist well beyond the point where valuation concerns first emerge. The current backdrop remains one of liquidity support, earnings strength in key areas, and persistent investor momentum.

For investors, the key question is no longer whether markets are cheap or expensive, but whether leadership can begin to broaden beyond a small number of dominant names.

Beyond the Magnificent 7

While much of the focus has remained on technology and artificial intelligence, other parts of the market have been quietly moving.

Resource stocks, in particular, have started to re-rate, supported by resilient commodity prices and ongoing demand for industrial metals. One example is Glencore (LSE: GLEN), which has recently reached record highs despite attracting far less attention than the major US technology names.

Where opportunities are starting to emerge

The group has traditionally been viewed as a highly cyclical commodities business, heavily exposed to swings in coal and base metal prices. That perception, however, is gradually starting to shift.

Copper is increasingly being viewed as a structural demand metal. Demand is being driven by electrification, grid expansion and the build-out of AI-related infrastructure.

At the same time, supply remains constrained. New projects are slow to come online due to permitting delays and rising development costs.

This is beginning to change how the business is assessed. Rather than being viewed purely as a short-cycle miner, it’s increasingly being considered through the lens of long-term industrial demand exposure across copper, zinc, and nickel.

What could go wrong

Despite the improving narrative, the investment case still depends heavily on commodity prices. These remain volatile and sensitive to global growth, particularly in China.

There is also execution risk around future development projects. The timing and economics of new copper supply will play a key role in long-term returns.

For now, the key point is simple: the stock market narrative remains concentrated in a narrow group of technology leaders. Other areas are starting to show independent momentum.

Resource stocks are one example of this shift. They are not replacing current leadership, but they do suggest that returns are beginning to broaden beneath the surface.

The post Stock market rally looks stretched in places — but the trend is still intact appeared first on The Twelfth Magpie.

This move back towards an earnings-driven phase means fundamentals such as cash flow strength and balance sheet quality are becoming more important for valuation.

That shift could have significant implications for the FTSE 100. It’s particularly relevant given its heavy exposure to traditional sectors such as banks, miners, and energy companies.

These industries are closely tied to earnings trends and broader economic conditions, making them more sensitive when market focus turns back towards fundamentals. So is the FTSE 100 now shifting into a more sustained earnings-driven phase?

Market shift

The stock market’s growing focus on earnings reflects a broader shift in the macroeconomic environment. After a long period where low interest rates supported distant growth stories, investors are now operating in a very different backdrop.

Higher inflation, more volatile interest rate expectations, and renewed geopolitical risk have all contributed to a reassessment of valuation. In this environment, future cash flows are being discounted more heavily, which naturally increases the importance of near-term earnings strength.

At the same time, higher-for-longer interest rates have restored the relevance of capital discipline. Companies are once again being judged on their ability to generate cash today, rather than promises of growth further out.

FTSE 100 earnings power in focus

Nowhere is this earnings-driven shift more visible than in its core sectors. Banks, energy companies, and miners all sit at the centre of the index and are highly sensitive to changes in earnings visibility and macro conditions.

Barclays reflects the interest rate and credit cycle, while BP remains closely tied to oil prices and cash flow generation. Both highlight how quickly earnings expectations can shift in the current environment.

But Glencore (LSE: GLEN) stands out. Its earnings have traditionally been driven by cyclical commodity prices, particularly copper. However, that story is beginning to change. Copper is increasingly being viewed as a structural demand metal, driven by the AI build-out, electrification of grids, and long-term industrial demand, while supply remains constrained.

Structural growth

That shift is already starting to change how the business is being positioned. Rather than being treated purely as a cyclical commodities producer, the miner is increasingly being viewed through the lens of earnings durability and long-term demand visibility.

If that narrative holds, it alters how investors think about earnings stability. Instead of being driven solely by short-term commodity cycles, future performance would be underpinned by structurally stronger demand dynamics for copper, zinc, cobalt, and nickel.

The risk is that this transition is not linear. Commodity prices remain volatile, and global growth — particularly in China — still plays a dominant role in short-term earnings outcomes.

The bottom line

Taken together, these shifts point to a stock market that is becoming more focused on fundamentals. Earnings visibility, cash generation, and balance sheet strength are regaining importance after years where sentiment and long-duration growth dominated.

For FTSE 100 investors, that means greater emphasis on business quality and earnings durability, and less tolerance for uncertainty.

In my view, that tilt towards fundamentals is a positive development for a market dominated by cash-generative businesses. It reinforces a more disciplined market backdrop, even amid ongoing economic uncertainty.

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Yet despite stronger production, firmer metals’ pricing and a strategic pivot to copper, it still trades at a big discount to its underlying worth.

With analysts forecasting robust medium‑term earnings growth, the key question now is how high can the stock go from here?

Strong earnings growth momentum?

Strong, sustained earnings growth is the key driver for any company’s share price over time. A risk for Glencore is any setback at its Kamoto Copper Company (KCC), Mutanda or South American mines that could slow its earnings momentum. Another is any long-term bearish trend in copper or coal pricing, which could underline the strong cash generation seen in 2025.

Nevertheless, analysts forecast that its earnings will jump by an average of 23.1% a year over the medium term. The momentum behind this was seen in its 2025 results released on 18 February this year.

Adjusted EBITDA soared 49% year on year in the second half to $8.1bn (£6bn), pushing full‑year adjusted EBITDA to $13.5bn. Revenue jumped 7% to $247.5bn, while operational cash generated before working capital, interest and tax was $10.6bn.

What’s the energy transition plan?

The numbers highlighted the growing weight of Glencore’s copper‑led strategy. Management believes copper will remain the single most critical metal for the global energy transition. And Glencore owns one of the most capital‑efficient portfolios of copper assets in the world.

CEO Gary Nagle underlined the near-50% rise in second‑half copper production, driven by stronger grades and recoveries at key assets. These include KCC, Mutanda, Antapaccay and Antamina. And the finalisation of the KCC land access package unlocks life‑of‑mine extensions and a pathway to around 300,000 tonnes per annum of copper.

These are crucial to Glencore’s plan to exceed a million tonnes of annualised copper output by 2028.

So where ‘should’ the stock be trading?

When valuing a business, discounted cash flow (DCF) analysis remains one of the clearest ways to estimate where a stock should be priced. It does this by projecting future cash flows and translating them into today’s money.

Naturally, the less certain those forecasts are, the higher the return investors demand — and the heavier the discount becomes. Analysts’ DCF models differ widely, with some more bullish than mine and others more restrained. But using my own assumptions — including an 8.3% discount rate — Glencore shares are 49% undervalued at their current £5.57 price.

That points to a fair value of £10.92, nearly double the current price. If markets continue drifting towards fair value over time, this could be a superb opportunity if those DCF assumptions hold.

My investment view

Glencore’s rising earnings momentum, copper strategy aligned to long‑term structural demand, and deep undervaluation look hard to ignore.

The 2025 results highlight a business with improving operational performance and a clear pathway to materially higher cash flows.

I already hold several stocks in the commodities sector, so buying another would unbalance my portfolio. Instead, I am eyeing other deeply discounted stocks in other sectors, often with high yields attached.

However, for investors without this problem and willing to look beyond short‑term commodity swings, I think Glencore is worthy of serious consideration.

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For me, this reflects a broader shift in global asset allocation. Capital is rotating away from high-multiple stocks priced on long-duration promises to companies generating near-term cash flows.

The Glencore re-rating signal

One old economy stock that sums up this notion of the great rotation is Glencore (LSE: GLEN). Its share price is back at its 2022 all-time highs, despite materially weaker earnings.

What stands out is not just the level of the share price, but what it implies. The market appears to be valuing Glencore less as a cyclical earnings proxy and more as a cash-generative industrial commodity business, with embedded optionality in copper and energy transition metals.

That shift matters. Even with profits well below the 2022 super-cycle peak, the company still generates strong cash flow and returns capital to shareholders. That’s exactly what the market is rewarding right now.

Coal remains the key swing factor and continues to weigh on headline profitability, particularly as prices have normalised over the past few years.

More broadly, consolidation in the sector remains a live theme, with past merger discussions involving Rio Tinto highlighting how strategic positioning in copper and other critical minerals could drive the next phase of value creation in the industry.

When banks become cash machines

HSBC (LSE: HSBA) is no longer just a ‘bank trade’. It’s a global cash engine inside the FTSE 100. Geopolitics and regional risks drive short-term volatility, but often hide a far more stable underlying story.

At its core, the bank is leveraged to a structurally higher interest rate environment. Even if central banks eventually ease policy slightly, rates remain well above the ultra-low era that defined the last decade.

That matters because it supports sustained net interest income across its global deposit base, particularly in Asia where much of its earnings power is concentrated.

In simple terms, HSBC doesn’t need rates to rise — it benefits from them staying ‘normalised’ rather than collapsing back to zero.

On top of that sits a clear capital return story. A dividend yield of 4.6%, supported by ongoing buybacks, positions the stock less as a traditional growth bank and more as a yield compounder.

Risks remain, particularly around global growth and geopolitical shocks. But these tend to affect sentiment more than long-term earnings power.

The bigger picture is that the market is re-rating HSBC as a high-yield, structurally supported cash flow business.

Bottom line

What stands out to me is that the FTSE 100 is being re-rated in plain sight. Investors are shifting away from long-duration growth stories and towards businesses delivering cash today. Miners and banks are no longer being priced as purely cyclical — but as cash-generative assets with real return potential.

In that context, I think both Glencore and HSBC are worth a closer look at current levels, given their ability to generate strong cash flow and return capital through the cycle, even in more uncertain macro conditions.

If that shift continues, this may be less of a short-term trade and more of a structural rotation. For me, that suggests the FTSE 100 still has further to run.

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