Every Monday I like to take a look at which ASX shares are attracting the most unwanted interest from short sellers.
Unlike the majority of investors, short sellers aim to profit from share price declines. They hope to achieve this by borrowing shares to sell on market with the aim of buying them back at a cheaper price. Although it's worth noting they're not always right and can be spectacularly wrong.
According to data provided by ASIC, here are the 10 most shorted shares on the ASX this week:
- Myer Holdings Ltd (ASX: MYR) has seen short interest rise slightly to 16.2% this week, making the retailer the most shorted share on the ASX once again.
- Aconex Ltd (ASX: ACX) has seen short interest fall to 15.3%. I think some short sellers will have closed positions last week following the sharp drop in the tech company's share price after its shock profit downgrade.
- TFS Corporation Limited (ASX: TFC) has 11.7% of its shares now held short. Short sellers clearly don't expect the company to deliver on its promise of adjusted cash EBITDA growth of at least 25% in FY 2017.
- Western Areas Ltd (ASX: WSA) has seen short interest fall slightly to 11.7%. With nickel prices likely to remain lower for longer than expected, Western Areas does look vulnerable right now.
- Vocus Communications Limited (ASX: VOC) has 11.3% of its shares held short. If the telco company delivers a strong half-year result on February 22, I believe there's a good chance we could see a short squeeze.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) has short interest of 10.5%, down slightly week-on-week. Its shares may be down 28% in the last 12 months, but short sellers clearly believe they can fall further.
- Worleyparsons Limited (ASX: WOR) has 9.9% of its shares in the hands of short sellers. I'm not confident on the mining services industry right now, due to heightened competition and low margins.
- Monadelphous Group Limited (ASX: MND) is another mining services company being targeted by short sellers. It has short interest of 9.8%, up sharply from 7.8% last week.
- Metcash Limited (ASX: MTS) has now seen short interest drop for a fourth week in a row to 9.8%. It looks as though the market is becoming a little more bullish on the wholesale distributor.
- Syrah Resources Ltd (ASX: SYR) has seen short interest drop a touch to 9.7%. The graphite miner's shares have been amongst the worst performers on the ASX in the last six months, dropping 30%.
