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.
