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These are the 10 most shorted shares on the ASX

At the start of each week I like to look at which shares are being targeted by short sellers.

As short selling is one of the riskiest strategies out there, short sellers will generally only take out a position if they have a high conviction of success. Because of this, I think it is prudent for investors to keep a close eye on short interest levels.

Here are the 10 most shorted shares on the ASX according to data provided by ASIC:

  • Syrah Resources Ltd (ASX: SYR) continues to be the Australian share market’s most shorted share with short interest of 21%. Syrah has been targeted due to concerns that its massive Balama project could lead to an oversupply of graphite.
  • Domino’s Pizza Enterprises Ltd. (ASX: DMP) has seen its short interest fall slightly week-on-week to 17%. The pizza chain operator has fallen out of favour with investors following a series of disappointing results.
  • JB Hi-Fi Limited (ASX: JBH) has 16.3% of its shares held short, up slightly from last week. Short sellers appear to believe that the retailer will not live up to expectations amid increasing competition online.
  • Galaxy Resources Limited (ASX: GXY) has 14.2% of its shares held short. There are concerns that lithium prices could tumble by half over the next few years as a result of increased production in Australia and Argentina.
  • Healthscope Ltd (ASX: HSO) has seen short interest rise again to 13.9%. Short sellers continue to target the private hospital operator over concerns that falling private health insurance numbers will continue to negatively impact its business.
  • Independence Group NL (ASX: IGO) has short interest of 12.3%, up slightly week-on-week. Although it has risen this week, the gold and nickel miner has seen a significant reduction in short interest over the last few months.
  • Vocus Group Ltd (ASX: VOC) has short interest of 11.6%. Short sellers will be pleased to learn that last week the telco company’s shares fell to a multi-year low.
  • Mayne Pharma Group Ltd (ASX: MYX) has short interest of 10.9%. The pharmaceutical company has been suffering greatly from weak prices in the U.S. generic drugs market and short sellers don’t appear to expect things to change any time soon.
  • Myer Holdings Ltd (ASX: MYR) has returned to the top ten with short interest of 10.9%. Despite the retailer’s shares falling significantly this year, short sellers continue to believe they could fall lower.
  • HT&E Ltd (ASX: HT1) has 10.7% of its shares held short. Short interest has been dwindling since the outdoor advertising company released a better than expected half-year result in February.

Lastly, here are three top shares to buy that are free from short seller interest.

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Vocus Communications 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 Scott Phillips.

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