At the start of each week I like to take a look at data provided by ASIC to see which ASX shares are currently being targeted by short sellers.
While short sellers will often get it wrong, I believe it is prudent for investors to pay close attention to high short interest as it could be an early warning sign of a share price decline.
At present these are the 10 most shorted shares on the ASX:
- Orocobre Limited (ASX: ORE) is once again the most shorted share on the ASX with a whopping 22.4% of its shares held short. Short sellers have been targeting the lithium miner since it reduced its full-year production guidance.
- Western Areas Ltd (ASX: WSA) has seen its short interest jump to 17.5%. The outlook for nickel prices looks increasingly bleak with speculation that Indonesia and the Philippines will soon lift their export bans.
- Syrah Resources Ltd (ASX: SYR) has short interest of 16.2%, up sharply from last week. Despite the high level of short interest, the graphite miner's shares have rallied 7.5% in the last 30 days.
- Vocus Group Ltd (ASX: VOC) has short interest of 15.3%, which is the highest level this year. Despite its share price falling sharply this year, some investors appear to believe it could yet fall further.
- Aconex Ltd (ASX: ACX) has 13.7% of its shares held short. Short interest in the software-as-a-service company continues to fall, possibly hinting that investors believe the worst is behind the company now.
- Myer Holdings Ltd (ASX: MYR) has seen short interest rebound. The department store operator now has 12.7% of its shares held short following last week's disappointing quarterly update.
- Mayne Pharma Group Ltd (ASX: MYX) has 12.1% of its shares in the hands of short sellers. Whilst I think the pharmaceutical company could be a good buy and hold investment option, the rising short interest is a worry. Investors may want to hold back for the time being.
- Quintis Ltd (ASX: QIN) has 11.4% of its shares held short. Short sellers will have been celebrating this weekend after the sandalwood plantation manager's shares fell a massive 73% last week.
- Independence Group NL (ASX: IGO) is a new addition to the top 10 with short interest of 11.3%. Production delays at its Nova mine have been a big disappointment this year, weighing heavily on its share price.
- Bellamy's Australia Ltd (ASX: BAL) has jumped into the top 10 with short interest of 11.1%. With the infant formula company's shares up a remarkable 34% in the last 30 days without any meaningful news, it seems as though short sellers think it could be at risk of declines now.
