At the start of each week I like to look at which shares short sellers are targeting. One question I get asked a lot is whether or not short sellers get it right.
In order to see how good they are at picking out a loser, I thought I would go back one year and see how the top ten most shorted shares have performed.
Here are the ten most shorted ASX shares from a year ago:
- Aconex Ltd (ASX: ACX) was the most shorted ASX share at the time. Although in the long-term short sellers got it wrong, in the short-term it was a big winner for them. Over the following two weeks its shares would go on to sink almost 50% lower.
- The Myer Holdings Ltd (ASX: MYR) share price has fallen 50% since this time last year, making it a big win for short sellers.
- The Western Areas Ltd (ASX: WSA) share price fell 32% over the next five months as nickel prices softened, but is now 23% higher than it was a year ago thanks to an improved outlook.
- The Quintis Ltd (ASX: QIN) share price has lost 82% of its value since this time last year. It was around this time last year that the sandalwood plantation manager was accused of operating like a Ponzi-scheme.
- The Syrah Resources Ltd (ASX: SYR) share price would go on to fall 34% over the next couple of months, before recovering and ultimately racing to an-all-time high earlier this month.
- The Nine Entertainment Co Holdings Ltd (ASX: NEC) share price has risen 37% over the last 12 months, making it a big loser for short sellers.
- The Metcash Limited (ASX: MTS) share price is 39% higher since this time last year, much to the dismay of short sellers.
- The Vocus Communications Limited (ASX: VOC) share price is down 25% over the last 12 months. At one stage its shares were down as much as 48%.
- The Worleyparsons Limited (ASX: WOR) share price has stormed 41% higher since this time last year. There was, however, a sharp 25% drop in February that short sellers could have used to exit positions.
- The News Corp (ASX: NWS) share price has rallied 31% in the last 12 months, making it another loser for short sellers.
Seven out of the ten shares sank notably lower at some stage in the months that followed.
As a result, I believe this demonstrates why investors ought to take high levels of short interest seriously when considering an investment.