Glencore’s (LSE: GLEN) share price has tanked recently. Currently, the shares are trading about 40% off their highs and at levels last seen in September 2021.

Is now the time to consider buying this FTSE 100 stock? Let’s discuss.

A play on copper

In theory, Glencore has an attractive long-term outlook. That’s because it’s a major producer of copper.

In the years and decades ahead, copper demand is forecast to increase significantly. The global shift to clean energy, an increase in the number of electric vehicles (EVs) on the road, and an increase in data centres are expected to be some of the key growth drivers.

The EV boom, in particular, is worth highlighting. Whereas a traditional vehicle uses around 20-25 kilograms of copper, an EV uses about 80-85 kilograms so demand here is likely to be high.

Data centre demand also looks like it will grow substantially. According to BHP, the amount of copper used in data centres is set to grow six-fold by 2050.

Unpredictable earnings

The problem with Glencore from an investment perspective, however, is that it’s very unpredictable. With this company (which produces a range of commodities including nickel, zinc, and coal), there’s no guarantee of revenue and profit growth (which is what drives a company’s share price higher in the long run) due to the fact that commodity prices tend to swing around wildly.

This was illustrated earlier this week when the company posted its full-year results for 2024. Due to weak coal prices and impairment charges, the numbers were poor.

For the year, adjusted earnings before interest and tax (EBIT) came in at $6.9bn – down a whopping 33% year on year. Meanwhile, the group posted a net loss of $1.6bn versus a profit of $4.3bn a year earlier.

Trading uncertainty

One other issue to be aware of with Glencore is that it’s not just a commodity producer. It also engages in commodity trading, like an investment bank or hedge fund.

This adds another layer of uncertainty for investors. Even if commodity prices were to rise, there are no guarantees that the stock would do well because the company could experience trading losses.

It’s worth noting here that over the last year, the price of copper has risen nearly 20%. Yet over this timeframe, Glencore’s share price is down about 16%.

Dividend income?

What about dividends though? Could the stock be a good play for income?

Well, for 2025, the company is expected to pay out 21.8 cents per share to investors. That translates to a yield of around 4.9% right now.

However, I’d take this forecast with a pinch of salt. Glencore’s payout tends to fluctuate heavily from year to year because its earnings fluctuate, and in recent years, the company has slashed its payout heavily on several occasions.

Better stocks to buy?

Now, of course, there’s a chance that Glencore shares could do well in the years ahead. In the past, there have been times where the share price has surged.

However, for me, they’re too unpredictable. I think there are better shares to consider buying.

Speculation is rife that the Cash ISA is about to go undergo some significant surgery. There have been murmurs that these tax-efficient products could be scrapped altogether.

There’s also talk that the £20,000 annual allowance could be trimmed back to just £4,000.

Supporters of a radical overhaul believe it could ignite investment in higher-yielding assets like shares, boosting individuals’ retirement pots while giving a leg-up to the British economy.

Rumours are certain to continue swirling ahead of next month’s Spring Statement. But following government comments this week, it appears change is coming down the tracks in some way, shape or form.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Change is coming

On Thursday (20 February), chancellor of the exchequer Rachel Reeves said: “At the moment, there is a £20,000 limit on what you can put into either cash or equities [via the Stocks and Shares ISA], but we want to get that balance right.”

Tellingly, she added: “I do want to create more of a culture in the UK of retail investing like what you have in the US to earn better returns for savers and to support the ambition to grow the economy creating good jobs right across the UK.”

Reeves’ comments would have sent a shiver down the spine of many savers. Investing isn’t for everyone, and some prefer the security and the simplicity of just holding cash on account instead of buying shares, trusts and funds.

Embracing opportunity

As a Cash ISA holder myself, I’m hoping the chancellor resists wholesale changes to this popular product. I don’t fancy having to pay tax on the interest my savings generate.

But any modifications might not be the disaster some Cash ISA users fear. It may even provide the opportunity that the chancellor believes could supercharge all of our retirement funds.

And if done the right way, Britons can embrace this new reality without burdening themselves with too much risk.

Diversifying for safety

By holding a diverse selection of shares, investors can greatly reduce the danger to their hard-earned cash. A portfolio of, say, 10-15 shares across different sectors can balance risk, provide exposure to a multitude of investing opportunities, and deliver a stable return across the economic cycle.

A simpler way to diversify is by buying an investment trust or an exchange-traded fund (ETF) that invests in a basket of assets. The iShares FTSE 250 ETF (LSE:MIDD) is one such fund that risk-averse individuals may wish to consider.

The fund invests across the whole of the FTSE 250 index. So it has holdings in a wide spectrum of companies including retailer B&M, broadcaster ITV and insurance provider Direct Line.

Funds like this aren’t totally without risk and may fall during broader market downturns. But over time they’ve also proved to be effective ways to build wealth in a low-risk way.

FTSE 250 funds like this one have provided an average annual return of around 9% in the last 20 years. That’s also higher than the return Cash ISAs have delivered over the same timeframe.

I believe it’s wise to retain some cash held in a savings account, regardless of any tax liabilities on the interest. But with changes to the Cash ISA likely approaching, now could be a good time for us to explore additional (and potentially superior) ways to grow our money.

Building a diversified portfolio allows investors to spread risk as well as target market-beating returns. Someone who invested £20k equally five years ago in this particular FTSE 100 share and exchange-traded fund (ETF), for instance, would have more than doubled their money to £45,493.

I think these London-listed stocks remain top investments to consider. Here’s why.

A top fund

A blend of soaring tech earnings, sustained monetary support, and a rebounding US economy has driven the S&P 500 through the roof since 2020. Over the past five years, the index-linked fund iShares Core S&P 500 ETF (LSE:CSPX) has delivered an average annual return of 14.8%.

Admittedly there’s more risk to buying US-focused funds like this today. This is because growth-sapping and inflation-stoking trade tariffs introduced by President Trump could be coming.

Intelligence provider S&P Global thinks US tariffs on Canada and Mexico alone will boost consumer price inflation (CPI) by 0.5% to 0.7%. That’s assuming said tariffs persisted through 2025.

S&P also thinks US real GDP over the next year will be 0.6% lower if new trade taxes are introduced, with the Federal Reserve pausing planned rate cuts earlier than anticipated.

Yet despite this threat, I’m still confident about the S&P 500 looking ahead. While past performance is not always a reliable indicator, the index has been resilient despite past macroeconomic and geopolitical turmoil.

Since February 1995, the S&P 500 has appreciated by a whopping 1,160%. I believe it’ll continue soaring over the next 30 years too.

For one, it still provides significant exposure to growth themes like increased digitalisation, the growing green economy, rising healthcare demand, and the financial services boom. A substantial weighting of multinational large-cap shares also makes it less reliant on a strong US economy to drive earnings than a mid-cap tracker is.

Finally, the S&P 500’s unique mix of innovation champions and established industry leaders provides growth potential as well as resilience over the long term.

Game on

Investing in individual shares doesn’t provide security through diversification like an ETF. But it can also deliver superior returns if stock pickers choose wisely.

Take Games Workshop (LSE:GAW), for example. Since 2020, the tabletop gaming specialist has delivered an impressive average annual return of 18.3% as sales have kept soaring.

Since it opened its first shop in the late ’70s, the fantasy wargaming hobby has become a multi-billion-pound industry. And through its Warhammer line of products — which it has been cultivating for almost 40 years — Games Workshop has become the undisputed market leader.

This is reflected in the premium prices of its models and other paraphernalia, and consequently its enormous profit margins. Core gross margin was 67.5% in the six months to 1 December.

Can Games Workshop continue its stunning share price ascent, though? Some analysts have concerns, reflecting less scope for earnings growth as what was a niche hobby has become more mainstream.

I have no such concerns, however. For one thing, the business continues to rapidly expand its store network across the globe. It’s also taking steps to supercharge its royalty revenues, as illustrated by its blockbuster TV and film deal with Amazon last year.

Revenues growth may slow during economic downturns. Still, over the long term, I’m expecting Games Workshop to keep delivering.

Premium content from Motley Fool Hidden Winners UK

Our monthly Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of small-cap recommendations, to help Fools build out their stock portfolios.

Why we like it: “The world of founder-led companies is among our favourite hunting grounds here at Hidden Winners. That’s because tenured management – with a significant stake in the business – often has cautious, long-term-oriented management principles. Partners Sam Bazini and Eoin Macleod – who combined own roughly 4-% of Warpaint London (LSE:W7L), evenly split – began their business careers selling cosmetics on market stalls. In 1992 they founded Warpaint, buying excess stock of cosmetics and fragrances from companies such as Revlon, and selling it on to discount retailers and wholesalers. While it was a nice business, the excess stock it was buying never included the most sought-after products, and to fill in the gaps and offer a complete cosmetics range to their growing customer base, the founders decided to create their own brand, W7.

“The key W7 brand – which focuses on the 16-34 age range – grew sales by 25% in the last six months and is responsible for around two-thirds of total sales. Its Technic brand – which focuses on the gifting market – grew by 34% in the same period and makes up about 32% of the sales pie. The company reckons that the key to its growth is expanding its presence into large retailers globally, growing sales with existing customers, while attracting new customers and growing its online presence. The business is both profitable and cash generative, with an exceptional recent and longer-term track record, and we’re given confidence that the owners/managers will steward the business (and their own investments) in a way that maximises long-term potential while avoiding catastrophic risk-taking.”

Why we like it now: Warpaint’s recent trading update was disappointing, with sales of £102m and profits of £24m falling slightly behind expectations of £105m and £24m respectively, but the share price fall looks potentially overdone. The market’s concerned that its growth rates aren’t sustainable – and if the trend of missed forecasts continues, that would be a worry – but the company boasts an exceptional longer track record of profit growth and could offer good value if its performance recovers. Warpaint is set to raise prices in 2025 and will benefit from the increasing scale of orders placed with suppliers as the business grows – potentially helping gross margins expand for a fifth consecutive year. Its strategy is “growing profitable sales of its branded products globally, while increasing overall margins” remains attractive in our view.

Shares in tobacco group British American Tobacco (LSE: BATS) have fallen to a price of £30 since the company’s 2024 results were published on 13 February. That’s a drop of just over 10%.

This FTSE 100 stock has now given up most of the gains made since 1 January, but the year is still young. British American shares are still up by 25% over 12 months.

I reckon it’s worth considering whether this dip could provide a buying opportunity to lock in an 8% dividend yield.

Why the dip?

Let’s start with a look at some possible reasons for BAT’s recent share price slump.

One factor may be the news that the company has set aside £6.2bn relating to a class action lawsuit in Canada. This has been rumbling on for years but now seems to be nearing a settlement.

Elsewhere, changes to regulations in Australia and tax policies in Bangladesh are expected to contribute to a 2% fall in industry cigarette volumes in 2025. This is expected to affect British American too.

The big picture hasn’t changed

The reality is that regulations, excise duties, and lawsuits will always be a risk to the tobacco industry.

Declining sales of traditional cigarettes are also likely to continue. But it’s worth remembering this is a very large and profitable business.

British American sold 505bn cigarettes last year, thanks to the appeal of leading brands such as Dunhill, Lucky Strike, Rothmans, and Camel.

The company is also one of the largest players in other forms of nicotine delivery. These include vapes, oral and heated tobacco.

The only problem here is that British American’s vaping volumes also fell last year, dropping 5.9%.

Management say its vaping products have a 40% share of the world’s top vapour markets. However, they say it is suffering significant lost sales due to the “continued lack of enforcement of illegal flavoured and single-use products” in the US.

These “illicit” vapes are said to account for almost 70% of all US vaping sales.

The good news for British American is that enforcement seems to be tightening up. If more illegal vapes can be removed from the market, I think it’s fair to expect that BAT’s Vuse brand would increase its market share in the US.

BAT: a stock to buy?

This is a business where it’s easy to suggest things that could go wrong. But these risks aren’t secret. I think they are probably reflected in the share price.

In the meantime, it’s worth remembering that British American Tobacco is still a huge and highly profitable business.

The company generated £7.9bn of surplus cash last year. That’s equivalent to 12% of the current £67bn market cap. I would generally see this as good value.

This figure (known as the free cash flow yield) also tells me that BAT’s cash generation comfortably covers its 8% dividend yield. This reduces the risk of a cut to the payout.

These shares won’t be suitable for all investors. But I think British American Tobacco is worth considering as a cheap, high-yield share.

The FTSE 25O index has been limping along for some time now. Excluding dividends, it’s risen just 21% in a decade!

That meek performance is obviously very disappointing, especially when we compare it to other indexes. The mid-cap S&P 400 in the US, for example, is up more than 100% over the same period.

One problem is that FTSE 250 companies tend to be more domestically focused, meaning they’re reliant on the weak UK economy. And with inflation rising again and the Bank of England unlikely to cut rates in March, I’m not optimistic that the FTSE 250 will turn things around anytime soon.

As such, I’m confident that Baillie Gifford US Growth Trust (LSE: USA) will easily outperform the UK’s mid-cap index over the next few years.

The next generation

As the name suggests, this investment trust focuses on US growth stocks. Specifically, it invests in those that have the “potential to grow substantially faster than the average company”. And the trust’s strategy is to “hold onto them for long periods of time, in order to produce long-term capital growth“.

The largest 10 holdings are very different to the top of the S&P 500 index, which is dominated by Apple and Microsoft. The trust holds neither of those tech giants (nor Google parent Alphabet).

Instead, it chooses to invest in many smaller companies that it sees as the next generation of top growth stocks. These include Cloudflare, which operates a global edge computing network. The trust thinks this company could become the next major cloud platform outside the tech giants.

Another interesting stock is Sweetgreen, the salad restaurant chain that is using automation through its Infinite Kitchen technology to produce salads 50% faster than humans can. The share price has doubled in the past year, but Sweetgreen still has a small market cap of $2.7bn. So, if this firm succeeds in future, the stock could easily become a multibagger.

As well as public firms like these, the trust also invests in private companies that everyday investors cannot otherwise access. The largest of these is SpaceX, Elon Musk’s pioneering rocket company that was last valued at a whopping $350bn. As the largest holding today, it makes up over 10% of assets.

Top 10 holdings (January 2025)

Risks

Naturally, there are risks to my thesis. If inflation proves problematic this year, then rates might stay higher for longer. That could impact growth stocks, which tend to perform better in a low-rate environment (or the anticipation of one).

Also, the top 10 holdings account for nearly half of total assets. So, if a couple of these were to weaken, that could drag on performance.

Finally, the trust’s growth strategy could struggle if investors turn bearish on highly-valued tech stocks. This happened in 2022, sending the share price down 52%. Indeed, it is yet to reclaim its 2021 heights.

Bright future

Over the next few years though, I see Baillie Gifford US Growth Trust performing much better than the FTSE 250. Most of the portfolio is made up of extremely high-quality US companies, in my opinion.

With the shares currently trading at a 10% discount to net asset value, I think they’re definitely worth considering for long-term investors.

BAE Systems (LSE: BA.) shares have been having a bit of a breather recently — they’re basically flat over the past six months. Zooming out a bit further though, they’re up 47% in two years and 120% over three. That easily tops the wider FTSE 100.

Yesterday (19 February), we got the defence giant’s full-year 2024 results, which were solid. So, should I buy more shares for my ISA? Let’s discuss.

Strong growth and huge order backlog

Last year, BAE’s sales jumped 14% to £28.3bn, while underlying profit grew by the same percentage to just over £3bn. Underlying earnings per share (EPS) increased 10% to 69.5p.

A final dividend of 20.6p was declared, taking the total for 2024 to 33p — an increase of 10%. However, due to the strong share price appreciation in recent years, the forward-looking dividend yield here is just 2.65%. That’s below the FTSE 100 average.

The company also repurchased 43m of its own shares. Combined with dividends, that saw it return nearly £1.5bn to shareholders throughout the year.

CEO Charles Woodburn commented: “We’re supporting our customers around the world, while shaping our portfolio towards higher growth and strategically important markets… Based on the exceptional visibility of our record order backlog and sustainability of our value-compounding business model, we remain confident in the positive momentum of our business into the future.”

Speaking of that record order backlog, it’s now reached a gargantuan £77.8bn. That’s 11% — or £8bn — higher than the start of 2024, and nearly three times the firm’s annual revenue!

Looking ahead to 2025, BAE expects sales to increase as much as 9%, with earnings rising 8%-10%.

Paradigm shift

At the recent defence summit in Munich, European political leaders agreed that they need to spend more on defence. US President Donald Trump has gone further, saying that NATO members should spend 5% of GDP on defence, rather than the current target of 2%.

But hang on. Europe is no hotbed of high economic growth. So how would it afford this? Well, European Commission President Ursula von der Leyen proposed exempting defence expenditures from EU budget constraints, thereby artificially creating room for further spending.

According to Reuters, Deutsche Bank analysts say that correcting 10 years of underspending by NATO members will cost €800bn!

Obviously this is a massive long-term opportunity for BAE, as Europe is certain to focus on enhancing its own defence production capabilities. Chief executive Woodburn called it a “paradigm shift“.

Indeed, one potential challenge I see here is that BAE may struggle to scale quickly enough due to capacity constraints and a shortage of skilled workers, potentially limiting its growth opportunities. However, management reckons such challenges can be overcome, and is already having “high-level” conversations with governments about demand.

Another risk here is the US government efficiency drive led by Elon Musk, which could lead to defence cuts and reduced opportunities for BAE across the pond.

My move

I first bought BAE shares in 2022 at 819p, then added on a dip at 1,158p in December last year. Now at 1,317p, the stock is currently trading at 19 times earnings, which is reasonable compared to global peers.

For investors looking for a defence stock to buy, I think BAE is worth considering. Weighing things up though, I’m happy with my own position size for now.

British Gas owner Centrica (LSE: CNA) saw its share price rise 10% when markets opened on Thursday (20 February), after the company unveiled a strong set of results.

Centrica has lagged the wider FTSE 100 over the last year, after a strong recovery from 2021 to 2023. But today’s numbers suggest to me the business remains on track to make sustainable progress. I think this could open the door to further share price gains.

Profits down, dividend up!

Centrica’s operating profit fell 43% to £1,552m in 2024. Despite this, the company unveiled a 10% dividend increase, lifting the payout to 4.5p per share. That’s a yield of about 3.1%, at the time of writing. Shareholders should also benefit from a further £500m share buyback. My sums suggest this should provide good value for money at current levels.

I wouldn’t normally praise a company for increasing its payouts when profits have fallen sharply. But this is an unusual situation. Centrica’s profits are returning to normal after windfall gains in 2023, when the company’s position as a big gas producer meant it profited from higher energy prices.

The energy group’s accounts show clear support for the dividend and buyback. This business generated nearly £1bn of surplus cash in 2024 and ended the year with net cash of £2.8bn.

Investing for long-term growth

I think Centrica CEO Chris O’Shea knows he’s struck lucky. Not so long ago, this group was struggling with flagging profits and a heavy debt burden.

O’Shea has planned a £4bn investment programme that’s intended to support long-term earnings, improve customer satisfaction and position the company for a gradual shift towards net zero. For example, the company installed nearly half a million smart meters last year.

Centrica also agreed to build two 100MW “flexible hydrogen-ready” gaspower plants in Ireland and extended the life of its four UK nuclear power stations.

Are the shares still cheap?

There are still some risks here. For me, the biggest concern is that Centrica generated nearly half its underlying profits last year from gas production and energy trading on international markets. These businesses can be far more profitable than being a regulated UK utility. But profits can also be much more volatile, depending on commodity market conditions.

On balance, I think this is a risk worth taking. In my view, these businesses may be able to contribute significantly more attractive returns for shareholders than British Gas might do alone.

Centrica’s huge cash pile also means that it’s able to invest in long-term opportunities from a position of strength. If it’s managed well, I think this should be a big opportunity.

Even after this morning’s gains, the shares are only trading on 10 times 2025 forecast earnings. Shareholders should also be able to look forward to a 3.5% dividend yield for the year.

This looks undemanding to me. My valuation estimates suggest Centrica shares could be worth more, even if profits level out. I think this energy stalwart’s worth considering.