At the start of each week I like to take a quick look at which ASX shares are attracting the most unwanted attention from short sellers. When an investor shorts a company’s shares they are borrowing shares to sell on market with the aim of buying them back at a lower price further down the line and pocketing the difference. At the moment short sellers are betting on the 10 shares below taking a tumble in the coming months according to data provided by ASIC: Syrah Resources Ltd (ASX: SYR) continues to be the most shorted ASX share with short…
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At the start of each week I like to take a quick look at which ASX shares are attracting the most unwanted attention from short sellers.
When an investor shorts a company’s shares they are borrowing shares to sell on market with the aim of buying them back at a lower price further down the line and pocketing the difference.
At the moment short sellers are betting on the 10 shares below taking a tumble in the coming months according to data provided by ASIC:
- Syrah Resources Ltd (ASX: SYR) continues to be the most shorted ASX share with short interest of 20.6%. Short sellers appear concerned about a potential oversupply of graphite due to its enormous Balama project.
- Independence Group NL (ASX: IGO) has short interest of 16.6%. Short sellers have been targeting the gold and nickel miner since it suffered from production delays at its key Nova operation last year.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall to 14.9%. Short sellers appear to be closing positions after Morgan Stanley upgraded the retailer’s shares to an overweight rating and added them to its model portfolio.
- Healthscope Ltd (ASX: HSO) has short interest of 13.7%. Short sellers may believe that the private hospital operator’s shares are expensive given the company’s weak outlook.
- Domino’s Pizza Enterprises Ltd. (ASX: DMP) has short interest of 13.6%, down sharply since last week. Short sellers may be concerned that the pizza operator could surprise during earnings season.
- Retail Food Group Limited (ASX: RFG) has short interest of 13.3%. Despite its fall from grace this year, short sellers continue to target the embattled food and beverage company.
- HT&E Ltd (ASX: HT1) has short interest of 10.2%. Things appear to be going from bad to worse for the outdoor advertising company. It recently lost a major contract and is now facing a sizeable tax bill from the ATO after being issued amended assessments.
- Flight Centre Travel Group Ltd (ASX: FLT) has 9.7% of its shares held short. Short sellers may be regretting this one. The travel agent’s shares have been on a tear recently following a broker upgrade.
- APN Outdoor Group Ltd (ASX: APO) has 9.6% of its shares held short. Short sellers may be targeting APN Outdoor over concerns that competition in the industry is heating up after JC Decaux won the Yarra Trams contract from HT&E.
- Greencross Limited (ASX: GXL) has entered the top ten with short interest of 9.3%. The integrated pet care company’s shares have rallied almost 24% over the last four months. Short sellers may believe they have run too hard.
Lastly, here are some top growth shares that short sellers won't go near right now.
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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, Greencross 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.