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

While the majority of investors are focused on buying shares which they believe will go up in value, there are investors out there doing the very opposite.

Some investors will take short positions by borrowing shares to sell on market in the hope of buying them back at a cheaper price in the future.

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

  • Orocobre Limited (ASX: ORE) remains the most shorted share on the ASX with 20.4% of its shares held short. After rallying 40% in the last three months, short sellers appear to believe the lithium miner’s shares are in danger of a decline.
  • Syrah Resources Ltd (ASX: SYR) isn’t that far behind with 18% of its shares in the hands of short sellers. Short sellers believe that the miner’s massive Balama Project will cause an oversupply of graphite when it finally opens.
  • Western Areas Ltd (ASX: WSA) has seen another slight drop in short interest to 16.7%. Soft nickel prices have weighed heavily on the miner’s shares lately, but if this is the bottom of the cycle then Western Areas could be a good option for investors in my opinion.
  • Myer Holdings Ltd (ASX: MYR) has seen its short interest rise again to 15.4%. The department store’s weak quarterly update and the impending arrival of Amazon appear to be the catalyst for the rise in short interest.
  • Vocus Group Ltd (ASX: VOC) has short interest of 15%, down sharply on last week. As the telco company is the subject of a takeover approach, I wouldn’t be surprised to see short sellers scrambling to close positions.
  • Independence Group NL (ASX: IGO) has seen short interest increase to 15%. Production delays at its key Nova mine are likely to be behind the rise in short interest.
  • Mayne Pharma Group Ltd (ASX: MYX) has 13.4% of its shares in the hands of short sellers. While I am a big fan of the company, I would stay clear of it until Trump’s policies on generic drugs pricing is fully understood.
  • Aconex Ltd (ASX: ACX) has 12.9% of its shares held short. Pleasingly for shareholders, short interest in the software-as-a-service company has fallen sharply in the last few months.
  • Domino’s Pizza Enterprises Ltd. (ASX: DMP) has 12.2% of its shares in the hands of short sellers. Concerns over allegations that a number of its licensees were underpaying staff appears to be behind the high level of short interest.
  • JB Hi-Fi Limited (ASX: JBH) has entered the top 10 with 11.2% of its shares held short. Fears over the impact that Amazon will have on its business are likely to be the reason short sellers have taken a sudden interest in the retailer.

Finally, if you'd prefer to invest in shares with lower levels of short interest then don't miss out on these stunning growth shares. Each has been growing like gangbusters and I expect more of the same next year.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Amazon. 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.

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