Do you own the 10 most shorted ASX shares?

Could the Orocobre Limited (ASX:ORE) share price and nine others come under more pressure as short interest builds? Here are the 10 most shorted shares on the ASX…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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

For those unfamiliar with short selling. A short seller will borrow 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.

At the moment short sellers are betting on the 10 shares below taking a tumble in the coming months:

  • Orocobre Limited (ASX: ORE) is yet again the most shorted share on the Australian share market with short interest of 19.3%. Although I am bullish on the lithium mining sector, two production downgrades this year makes me think it would be best to avoid Orocobre's shares.
  • Western Areas Ltd (ASX: WSA) has seen its short interest surge higher to 18.1%. Although improvements have been made in nickel prices recently, it hasn't stopped short sellers from taking an interest in its shares.
  • Syrah Resources Ltd (ASX: SYR) short interest has rebounded after two weeks in a row of declines. Short interest in the graphite miner has jumped to 17.8% ahead of next month's opening of its Balama project.
  • Myer Holdings Ltd (ASX: MYR) has 16.6% of its shares in the hands of short sellers. A recent full-year profit downgrade is likely to be the reason for the sudden rise in short interest.
  • Independence Group NL (ASX: IGO) has seen short interest rebound to 14.5%. Delays at its Nova operation and increasing costs are largely behind the high level of short interest.
  • JB Hi-Fi Limited (ASX: JBH) has now seen short interest lessen slightly to 13.6%. Short sellers appear very bearish on the electronics retailer's prospects due to the imminent launch of Amazon in Australia.
  • Retail Food Group Limited (ASX: RFG) has 13.2% of its shares held short. Short interest has risen sharply in the last few weeks following the release of a disappointing trading update from the food and beverage company.
  • Metcash Limited (ASX: MTS) has 12.1% of its shares held short due largely to concerns over how the supermarket price war and the Amazon launch will impact its future results.
  • Aconex Ltd (ASX: ACX) has climbed back into the top 10 with short interest of 12.1%. It appears as though short sellers expect Aconex to disappoint during earnings season.
  • Ardent Leisure Group (ASX: AAD) has short interest of 12.1%, up slightly from last week. While a recent trading update from its theme parks division revealed major improvements in its performance, it hasn't been enough to shake off interest from short sellers.
Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of ACONEX FPO and Retail Food Group 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »