These are the 10 most shorted ASX shares

Short sellers think the Orocobre Limited (ASX:ORE) share price is one of 10 heading lower. Here's why…

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Every Monday I like to take a look through the data provided by ASIC to see which ASX shares are currently being targeted by short sellers.

Although short sellers will often get it wrong, I believe investors should pay close attention to high levels of short interest as it could be seen as an early warning sign of a share price decline.

At present these are the 10 most shorted shares on the ASX:

  • Orocobre Limited (ASX: ORE) continues as the most shorted share on the ASX with short interest of 19.7%. Last week severe weather forced the lithium miner to downgrade its full-year production for the second time this year.
  • Syrah Resources Ltd (ASX: SYR) isn't far behind with short interest of 19%. Short sellers have targeted the miner over concerns that its massive Balama Project will upset graphite's supply-demand balance when it finally opens.
  • Western Areas Ltd (ASX: WSA) has seen short interest drop to 15.8%. A weak nickel price has weighed heavily on the miner's shares. But due to its cost-savings, when prices do eventually improve, I think Western Areas could be worth a look.
  • Myer Holdings Ltd (ASX: MYR) has 15.2% of its shares in the hands of short sellers. The department store operator's shares are down 36% this year but some investors still appear to believe they can fall further.
  • Independence Group NL (ASX: IGO) has seen short interest rise slightly to 15%. Production delays at its Nova mine have weighed heavily on the gold miner this year. Its shares are down 29% compared to a 10% gain by the gold index.
  • Metcash Limited (ASX: MTS) has 13% of its shares held short. Short interest in the wholesale distributor has been building up ahead of this week's full-year results.
  • Mayne Pharma Group Ltd (ASX: MYX) has 12.9% of its shares in the hands of short sellers. Although I think its shares are dirt cheap, until President Trump's policies on drug prices are known I would hold off an investment.
  • Domino's Pizza Enterprises Ltd. (ASX: DMP) has short interest of 12.8%. Short sellers took an interest in Domino's following allegations that a number of its licensees have underpaid staff.
  • Aconex Ltd (ASX: ACX) has 12.5% of its shares held short. Short interest in the software-as-a-service company continues to fall, which I feel could be a sign that sentiment is shifting positively.
  • iSentia Group Ltd (ASX: ISD) has short interest of 12%. Concerns over the underperformance of its content marketing business are behind the high level of short interest. Whilst I think its shares are cheap, until the segment's performance improves I would stay clear of the media intelligence company.
Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of ACONEX FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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