Mothercare plc (lon:mtc)
MTC – MotherCare Disappointing Christmas And Small Trader’s Mistake?


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Title: MTC – MotherCare Disappointing Christmas And Small Trader’s Mistake?
Company: MTC - Mothercare plc
Share Price Then: 45.9p
Author: Ian Smith
Date: Mon 08 Jan 2018
Comments: Mothercare announced disappointing sales over Christmas and the shares opened about 25% down, this has been followed by a rash of transactions that usually accompanies such an announcement.

By 09:00 there have been three times as many trades as on the whole of the preceding Friday, nearly all in the sub £5k range and many sub £2K.

Obviously I have no way of knowing if these are buys or sells but it really looks like small private traders jumping in hoping for a bounce, the problem is the trade volume is normally so low that there is no reason to expect such a bounce.

Jumping in now is likely to tie you into a Value Trap.

Mothercare is a well established business that has tried to do the right things but its share price over the last three years shows a trend of falling with no real positive spikes to suggest a revival is possible.

Once today is over trading volumes are likely to go back to normal and you are likely to be stuck with a share on a slow downward trend.

The moral of the story is don’t just buy on price but also look at what you are buying.
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