At the start of each week I like to take a look at data provided by ASIC to see which shares are being targeted by short sellers.
Unlike the majority of investors, short sellers aim to profit from share price declines. They aim to do this by borrowing shares to sell on market and then buying them back at a lower price in the future, pocketing the difference.
According to data by ASIC, these are the 10 most shorted shares on the Australian share market currently:
- Orocobre Limited (ASX: ORE) is once again the most shorted share on the ASX with short interest of 19.5%. The lithium miner's shares have come under significant pressure this year due to two unexpected production downgrades.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest drop to 18.1%. News that the graphite miner's massive Balama project is on course to commence production in August appears to have led to some short sellers closing positions.
- Western Areas Ltd (ASX: WSA) has seen short interest rise for a second week in a row and has now reached 16.9%. Global nickel prices fell sharply earlier this month after the Indonesian government eased its nickel ore export ban.
- Myer Holdings Ltd (ASX: MYR) has 16.2% of its shares in the hands of short sellers. The department store operator's shares have come under pressure this year following a weak third-quarter result and concerns over the growing e-commerce threat.
- Independence Group NL (ASX: IGO) has seen short interest remain steady at 15%. A cut to full-year production guidance at its Nova operation due to underground development delays is largely behind the negative sentiment.
- Retail Food Group Limited (ASX: RFG) has 13% of its shares held short. A recent trading update from the food and beverage company is likely to have attracted short sellers.
- JB Hi-Fi Limited (ASX: JBH) has seen short interest rise for a second week in a row to 12.8%. I suspect the imminent arrival of Amazon has investors expecting the worst for the electronics retailer.
- iSentia Group Ltd (ASX: ISD) has short interest of 12.7%. Short sellers appear to be concerned that there could be more bad news out of the media intelligence company's content marketing segment during earnings season.
- Metcash Limited (ASX: MTS) has 12.3% of its shares held short. Despite the high level of short interest, the wholesaler and distributor's shares have climbed strongly in the last six weeks thanks to its better-than-expected full-year results.
- Ardent Leisure Group (ASX: AAD) has entered the top 10 with short interest of 12%. Short sellers may want to approach this one with caution. Last week the entertainment company provided an update on its theme parks which revealed a solid improvement in visitor numbers and revenue.
