Do you own any of the 10 most shorted shares on the ASX?

Every Monday I like to take a close look at ASIC’s short positions report table to see which ASX shares short sellers expect to fall in value over the next few months.

Whilst short sellers don’t always get it right (often they get it very wrong), I feel 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 December 5:

  1. Myer Holdings Ltd (ASX: MYR) continues to be the number one target of short sellers on the ASX. The department store operator has 16.7% of its shares held short this week.
  2. Aconex Ltd (ASX: ACX) has seen short interest rise to a record high of 14.2%. It would appear as though short sellers think 81x full year earnings is still too expensive for the software-as-a-service company’s shares to trade at.
  3. Western Areas Ltd (ASX: WSA) has seen a slight drop in short interest week on week. At present 14% of the nickel producer’s shares are being held short.
  4. Nine Entertainment Co Holdings Ltd (ASX: NEC) has also seen short interest fall slightly. The media company has 11.5% of its shares in the hands of short sellers, compared to 12.1% last week. These are still some of the highest levels this year though.
  5. Metcash Limited (ASX: MTS) has 11.5% of its shares held short currently. Short interest in the wholesale distributor has fallen slightly week on week.
  6. TFS Corporation Limited (ASX: TFC) has 10.8% of its shares in the hands of short sellers. This means short interest in the sandalwood plantation manager has risen to a new high this year as some investors become ever more bearish on its prospects.
  7. Worleyparsons Limited (ASX: WOR) has seen short interest drop to 10.7% this week. Short interest in the mining services company has been on a steady decline in the last few weeks, which could be a positive sign for shareholders.
  8. Syrah Resources Ltd (ASX: SYR) is once again being targeted by short sellers. The graphite miner may be hovering just above its 52-week low, but clearly some believe it will go lower still. Short interest has reached a new high of 10.6% this week.
  9. Monadelphous Group Limited (ASX: MND) has 10.3% of its shares in the hands of short sellers. Short interest in the mining services company has remained largely flat from last week.
  10. Bellamy’s Australia Ltd (ASX: BAL) has seen a sharp drop in short interest. Just 10% of the infant formula producer’s shares are in the hands of short sellers this week, compared to 13% last week.

If you want to avoid shares with high levels of short interest then I would suggest you sell these shares now before short sellers target them too.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying even if the market turns south.Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of ACONEX FPO and 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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