Trading at a 52-week low is Glencore's share price now in deep overvalued territory?

I Glencore (LSE: GLEN)'s stock price makes for a grim sight these days, as I know to my cost. Every time I go into my portfolio, it drops another point or two.

Shares in FTSE 100 the mining giant hit a 52-week low of 362.8p on 11 September, after retreating 16.23% on the year. In two years, they decreased by 25.72%.

I bought Glencore shares on 26 July last year at 472p and off on 1 September at 429p. So far I'm down 20.84%. Should I rate down again?

Is Glencore now the top FTSE 100 deal?

My first response was 'no way'. But after taking a closer look at Glencore, I'm starting to feel positive about it.

The goods sector has been bolstered by the economic slowdown in China, which for decades was the biggest consumer of metals and minerals.

In fact, decline is a polite way to describe it. China is in a mess, financially and politically, and Beijing is struggling to find a solution. That's because it's a big part of the problem.

Political strategies have disrupted the business class of this country. China is also sitting on a mountain of debt, while its asset and shadow banking sectors are in shambles.

The US may struggle to stay afloat as it teeters on the brink of recession. Few expected a sudden resurgence in demand for natural resources. The drop in oil prices confirms that.

The commodities sector has been hit hard, but Glencore seems to have been hit harder than others.

This LSE stock is making money

That said, to my surprise, revenue actually increased by 9% in the first half of the year, to about $117.1bn. However, adjusted operating profit fell by 33% in EBITDA terms to $6.3bn. Glencore posted a net loss of $233m, down from a profit of $4.6bn last year. Wow! That was partly due to $1.7bn in priorities, but it still hurts.

However, there was good. The board was able to write off a total of $1.3bn, bringing the value down to just $3.65bn. And that was after financing $2.9bn of net capital expenditure and a $1bn return on shareholders. So it's not a basket case.

Annual free cash flow generation reached $6.1bn says CEO Gary Nagle “good luck” as the shareholder may return in February 2025. I hope you are right. When I bought Glencore, it had a trailing yield of around 6%, but that is now 2.76%.

I was expecting to bury Glencore, but now I see a lot of praise. I wouldn't describe the shares as dirt cheap, but they aren't that expensive, trading at 10.76 times earnings.

Commodity stocks are notoriously cyclical. They are prone to wild swings based on nothing more than investor sentiment. Today, sentiment is low on dumping and Glencore's shares may fall further in the near term. That would put them in a deep, deeply valued place. But they are high on my shopping list for what could be a volatile fall.