Medtecs International (SGX: 546) shares are up 10% today. The difficulty we’ve got here is that there’s no obvious and public reason why this should be so. Given that there isn’t we cannot, therefore, work out whether we think this price change will continue, hold or even reverse? For we’ve got to know why the price change before we can consider which way the next price change.
Of course, we can always return to that stock market page let out - “steady buying”. For that is the imminent reason that any share price changes. Demand for the stock prises, supply is as it was, therefore the price will obviously rise. It goes up because more people buy it. But while that’s obviously true it’s unsatisfactory for we want to know why more people want to buy more. And in the absence of that information - as here at Medtecs - we can’t try to predict the next move.
We have talked before about Medtecs: “As we can see from the Medtecs share price chart above that global shortage of protective equipment during the covid pandemic led to a massive surge in pricing and business. But this is then the problem with a business which is easy for others to enter. Many people did. So, the surge only lasted as long as it took others to enter the business line. Yes, sure, the pandemic is over but there's still elevated demand for the protective equipment - just in case and all that. But there are now many more suppliers. Medtecs is therefore stuck back in a business with no moat around profits and more competition. Those glory days aren't going to return even if there will continue to be interesting variations in the stock price as today.”
That’s from March this year and as a basic analysis of the business we’re still happy with that.
Medtecs International share price from Google Finance
We also talked about Medtechs International a little later: “Medtecs (SGX: 546) shares are up 18% and change today in Singapore. There's been a burst of trading in the stock just recently which explains the price movement. But then that just moves the “why?” question one iteration back. Why has there been a burst of interest and trading in Medtecs? This isn't something that has an obvious answer. There've been no announcements from the company on new contracts or significant changes in the business.”
It’s unsatisfying, we know, as an explanation but there simply are some stocks which, at near random times, undergo 10 and 20% price changes. And it’s worth noting that Medtecs today is below where it was after that 18% rise in April. All it’s really possible to say is that the price is subject to swings in sentiment.