Do you own 10 of the most shorted ASX shares?

Credit: Amada44

Once a week I like to take a look at ASIC’s short positions report table to see which ASX shares short sellers are hoping will fall in value over the next few months.

Whilst short sellers don’t always get it right (in fact they often get it wrong) I believe rising short interest should be viewed as a potential warning sign for investors.

Here are the 10 most shorted shares on the ASX as of November 14:

  1. Myer Holdings Ltd (ASX: MYR) is still the most shorted share on the ASX with 17.4% of its shares held short. However, following a strong trading update last week I wouldn’t be surprised to see short interest fall in next week’s data.
  2. Western Areas Ltd (ASX: WSA) has 14.9% of its shares shorted. Although the nickel producer’s share price has rallied 58% in the last six months, short sellers clearly don’t expect those gains to last.
  3. Worleyparsons Limited (ASX: WOR) has 13.7% of its shares in the hands of short sellers. Short interest in the mining services company has remained flat week on week.
  4. Bellamy’s Australia Ltd (ASX: BAL) continues to see short interest rise. The organic infant formula manufacturer has 13.2% of its share held short, which is the highest level this year.
  5. Aconex Ltd (ASX: ACX) is another company experiencing record high short interest. The software-as-a-service company has short interest of 12.2% this week.
  6. Nine Entertainment Co Holdings Ltd (ASX: NEC) has also seen short interest hit a new high this week. The media company has 11.2% of its shares held short as investors become ever more bearish on its future prospects.
  7. Metcash Limited (ASX: MTS) has 10.9% of its shares held short. Short interest in the wholesale distributor has remained flat week on week.
  8. Monadelphous Group Limited (ASX: MND) is another mining services company which short sellers are fond of and has short interest of 10.3%. With mining capital expenditures tipped to fall next year, it isn’t too surprising to see high short interest in mining services companies.
  9. TFS Corporation Limited (ASX: TFC) has 9.9% of its shares in the hands of short sellers. The sandalwood plantation manager has seen a small rise in short interest since last week.
  10. G8 Education Ltd (ASX: GEM) has seen short interest rise to its highest level this year of 9.7%. The childcare operator had a poor first half to the fiscal year, but promised a much stronger second half. It would appear as though short sellers doubt the company will deliver on its promise.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bellamy's Australia. 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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