Here are the 10 most shorted shares on the ASX

The Aconex Ltd (ASX:ACX) share price may be down 31% year-to-date, but it hasn't stopped short sellers from increasing their interest in the tech share. Here are the top 10…

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Every Monday I like to take a look at which ASX shares are attracting the most unwanted interest from short sellers.

When an investor decides to "short" a company's shares, they are borrowing shares to sell on market with the aim of buying them back at a lower price further down the line.

As there is theoretically limitless losses, it is certainly a high-risk investment strategy. But as we have seen with the likes of Bellamy's Australia Ltd (ASX: BAL) this year, it can also be a rewarding strategy.

According to data provided by ASIC, here are the 10 most shorted shares on the ASX this week:

  • Aconex Ltd (ASX: ACX) has become the most shorted shares on the ASX again with short interest rising to 17.1%. The software-as-a-service company's share price has fallen 31% so far year-to-date, but short sellers clearly believe it could drop further.
  • Myer Holdings Ltd (ASX: MYR) has seen short interest drop sharply to 15.7% ahead of its half-year results announcement at the end of this week.
  • Orocobre Limited (ASX: ORE) now has 14.4% of its shares in the hands of short sellers, up strongly since last week. Investors appear to be bearish on the lithium miner's prospects after a cut to its annual production guidance.
  • TFS Corporation Limited (ASX: TFC) has 14% of its shares held short. This is hardly a surprise considering the sandalwood plantation manager recently reported a 58% drop in net profit after tax.
  • Western Areas Ltd (ASX: WSA) has seen short interest remain steady at 13.8%. I'm still quite bearish on the nickel producer this year due to Indonesia's decision to lift its ban on nickel exports. Any hope of a recovery in prices this year appears to have been ruled out now.
  • Syrah Resources Ltd (ASX: SYR) has once again seen short interest rise, this time to 12.1%. Year-to-date the graphite miner's share price has fallen almost 17%.
  • Vocus Group Ltd (ASX: VOC) has seen short interest rise slightly to 11.7%. Although the rising short interest is a concern, I believe the telco company's relatively cheap price and strong growth prospects could make it a great investment right now.
  • Nine Entertainment Co Holdings Ltd (ASX: NEC) has short interest of 11%, up slightly on last week. The media company's share price has fallen 31% since this time last year.
  • Metcash Limited (ASX: MTS) has 10.2% of its shares in the hands of short sellers. Short interest in the wholesale distributor has risen slightly since last week.
  • Worleyparsons Limited (ASX: WOR) has 9.7% of its shares held short. Last week 13.8% of its shares were held short, but a takeover offer quickly sent short sellers scrambling to close their positions.
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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