MENU

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

Every Monday morning I like to start the week with a look at ASIC’s short position report in order to find out which shares are being targeted by short sellers.

A short seller borrows shares to sell on market, with the aim of buying them back at a lower price in the future and pocketing the difference.

As it is a high risk strategy with the potential for limitless losses, short sellers will often only take a short position if they believe they have a high probability of success. For this reason I believe it is prudent for investors to keep a close eye on short interest levels.

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

  • Orocobre Limited (ASX: ORE) continues to be the most shorted share on the ASX with 20.9% of its shares in the hands of short sellers. Short interest shot up after the lithium miner surprised the market with a downgrade to its full-year production guidance.
  • Syrah Resources Ltd (ASX: SYR) has short interest of 17.6%, down slightly from a week earlier. Whilst I think the graphite miner could have a bright future ahead of it, a group of notorious short sellers believe Syrah is vastly overvalued and have tipped it for a heavy fall.
  • Vocus Group Ltd (ASX: VOC) has short interest of 17.1%, up sharply on last week. The increasingly higher levels of short interest in the telco company’s shares is certainly a concern in my opinion.
  • Western Areas Ltd (ASX: WSA) has seen another slight drop in short interest to 17%. Weakening nickel prices have weighed heavily on the miner’s shares this year.
  • Myer Holdings Ltd (ASX: MYR) has seen its short interest rise again to 15%. Short sellers have taken a keen interest in the department store after its disappointingly weak quarterly update.
  • Independence Group NL (ASX: IGO) has seen short interest increase to 14.2%. Production delays at its key Nova mine appear to be the reason behind the sudden and sharp increase in short interest.
  • Mayne Pharma Group Ltd (ASX: MYX) has 13.3% of its shares in the hands of short sellers. Alleged price-fixing of generic drugs and Trump’s policies on prices are largely behind the negative sentiment.
  • Aconex Ltd (ASX: ACX) has 12.9% of its shares held short. Short interest in the software-as-a-service company has fallen sharply in the last few months as sentiment shifts positively.
  • iSentia Group Ltd (ASX: ISD) has short interest of 12.1%. Although there have been signs of improvement at the media monitoring company, short sellers appear to believe the problems with its content marketing business are not over.
  • Domino’s Pizza Enterprises Ltd. (ASX: DMP) is back in the top 10 with 11.7% of its shares in the hands of short sellers. The pizza chain operator came under pressure from short sellers after a number of its licensees were accused of allegedly underpaying staff.

Finally, if you'd like to avoid shares with high short interest then I would suggest you take a look at these incredible growth shares.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

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

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.