At the start of each week I like to take a look at ASIC's short position report to understand which ASX shares short sellers believe may fall in value over the next few months.
Although they don't always get it right, I still believe it is important to consider short interest prior to making an investment. At the moment short sellers are betting on the 10 shares below taking a tumble in 2017. Here they are:
- Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the ASX with 16.5% of the department store operator's shares held short.
- Aconex Ltd (ASX: ACX) is however closing in fast on Myer. The software-as-a-service provider for the construction industry has yet again seen short interest rise, this time to 16%.
- Western Areas Ltd (ASX: WSA) has 12.9% of its shares in the hands of short sellers, which is a slight drop from last week. With nickel prices tipped to improve in 2017 short sellers may want to be careful with this one.
- Syrah Resources Ltd (ASX: SYR) has seen a sharp rise in short interest to 12.6%. A rumoured takeover of the graphite miner by South32 Ltd (ASX: S32) appears to have been dismissed by short sellers.
- TFS Corporation Limited (ASX: TFC) is once again a favourite of short sellers. The sandalwood plantation manager has seen short interest rise slightly to 11.1%.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) saw short interest edge lower again to 10.9%.
- Metcash Limited (ASX: MTS) has also seen short interest fall to 10.7% this week. Since peaking at the end of November, short interest in the wholesale distributor has been falling slowly. This could be a sign that investors are becoming bullish on its prospects now.
- Monadelphous Group Limited (ASX: MND) has 10.1% of its shares held short. Last week the mining service company saw the number of shares held short jump from 8.5 million to 9.5 million in the space of a day.
- Estia Health Ltd (ASX: EHE) continues to see short interest rise. The aged care operator has 9.5% of its shares held short. Whilst 2016 was a year to forget for its shareholders, it would appear that some short sellers believe there is more bad news to come in 2017.
- Nextdc Ltd (ASX: NXT) is a new addition to the top 10. The data centre company is likely to have been targeted due to its shares trading at an astronomical 91x estimated FY 2017's earnings.
