While most investors want share prices to appreciate, not all of them do. Some will borrow shares to sell on market with the aim of buying them back at a cheaper price further down the line.
This high risk investment strategy is known as short selling or shorting.
According to the most recent data provided by ASIC, the 10 most shorted shares on the ASX at present are as follows:
- Syrah Resources Ltd (ASX: SYR) is still the most shorted share on the ASX with 21.3% of its shares held short. Short sellers appear to believe that the recently opened Balama project will cause an oversupply of graphite.
- Independence Group NL (ASX: IGO) has seen its short interest slide to 18.8%. Short sellers may be concerned about the positive outlook for nickel due its use in electric vehicle batteries.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has 17.2% of its shares held short, up slightly on last week. Short sellers could be expecting the pizza operator to continue struggling this year following a weak FY 2017.
- JB Hi-Fi Limited (ASX: JBH) has 15.2% of its shares in the hands of short sellers. Although the Amazon launch may have been delayed slightly, it is only delaying the inevitable as far as short sellers are concerned.
- Healthscope Ltd (ASX: HSO) has short interest of 15% due largely to concerns over the impact that falling private health insurance participation numbers could have on its business.
- Retail Food Group Limited (ASX: RFG) has short interest of 12.1%. The food and beverage company held its annual general meeting last week and provided a mixed trading update.
- Ardent Leisure Group (ASX: AAD) has 10.9% of its shares held short. Short sellers may be targeting the entertainment company due to weak trading numbers from its US-based Main Event business this year.
- Metcash Limited (ASX: MTS) has entered the top ten with short interest of 10.8%. However, this morning the wholesaler and distributor reported an impressive 19.6% increase in half-year underlying net profit.
- Western Areas Ltd (ASX: WSA) has once again seen its short interest fall, this time to 10.5%. Short sellers are likely to be concerned that the miner could be a big winner if nickel prices rise sharply due to the electric vehicle boom.
- Aconex Ltd (ASX: ACX) has 10.4% of its shares held short. The software-as-a-service company may have been targeted by short sellers due to the sky-high multiples its shares trade at.
