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These are the 10 most shorted shares on the ASX

Once a week I like to take a look at which shares are being targeted by short sellers.

Although it is a high risk strategy, as we have seen recently with Retail Food Group Limited (ASX: RFG), it can at times be a very rewarding one.

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

  • Syrah Resources Ltd (ASX: SYR) continues as the most shorted share on the ASX with short interest of 21.3%. Short sellers continue to believe that Syrah’s massive graphite project will disrupt the supply and demand balance.
  • Independence Group NL (ASX: IGO) has short interest of 17.2%. Short sellers may be betting on Independence falling short of its production guidance this year.
  • Domino’s Pizza Enterprises Ltd. (ASX: DMP) has 16.2% of its shares held short. The pizza chain operator had a disappointing FY 2017 and short sellers appear to believe FY 2018 could be equally disappointing.
  • JB Hi-Fi Limited (ASX: JBH) has seen short interest rise again to 16%. The arrival of Amazon in Australia seems to have many investors concerned about this retailer’s future performance.
  • Healthscope Ltd (ASX: HSO) has short interest of 13.3%, down sharply for a second week in a row. The healthcare company was targeted amid falling private health insurance participation rates.
  • Retail Food Group Limited has short interest of 12%, down sharply week-on-week. As there is a delay to this data from ASIC, I suspect next week will reveal an even bigger drop. Last week short sellers appeared to be covering positions to lock in sizeable gains.
  • Ardent Leisure Group (ASX: AAD) has 10.7% of its shares held short. With the market responding positively to the sale of its bowling business, short sellers may want to be careful with this one.
  • Myer Holdings Ltd (ASX: MYR) has returned to the top ten with short interest of 9.7%. Earlier this month Myer warned that sales were down sharply in December compared to the prior corresponding period.
  • Flight Centre Travel Group Ltd (ASX: FLT) is another new addition to the top ten with short interest of 9.6%. The travel agent’s shares have run hard this year and short sellers may believe they are overvalued now.
  • Western Areas Ltd (ASX: WSA) has 9.5% of its shares in the hands of short sellers, down sharply week-on-week. Short interest continues to fall as nickel prices improve.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited 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.

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