At the start of each week I like to look at which shares are being targeted by short sellers. As short selling can be one of the riskiest investment strategies out there, short sellers will generally only take out a position when they have a high conviction of success. Because of this, I believe it is prudent for investors to keep a close eye on what short sellers are doing. 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 most shorted share on the…
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At the start of each week I like to look at which shares are being targeted by short sellers. As short selling can be one of the riskiest investment strategies out there, short sellers will generally only take out a position when they have a high conviction of success.
Because of this, I believe it is prudent for investors to keep a close eye on what short sellers are doing.
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 most shorted share on the local market with short interest of 21.3%, down slightly week-on-week. Short sellers don’t appear confident that Syrah will ever command strong enough graphite prices to justify its current market capitalisation.
- Domino’s Pizza Enterprises Ltd. (ASX: DMP) has experienced another week-on-week increase in short interest to 17.5%. The pizza chain operator’s weak first-half result has many in the market concerned that it will fall short of its guidance once again in FY 2018.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise week-on-week again to 16.4%. Short sellers will have been celebrating last week when JB Hi-Fi downgraded its full-year profit guidance due to a weak performance from its Good Guys business.
- Galaxy Resources Limited (ASX: GXY) has 15.1% of its shares held short, down slightly week-on-week. Short sellers were hit hard last week when the market reacted positively to news that the lithium miner is looking into strategic options for its Sal de Vida operation.
- Nanosonics Ltd (ASX: NAN) has seen its short interest rise again to 12.9%. Short sellers don’t appear to have been put off by news that the infection control specialist’s trophon2 device has been granted FDA clearance.
- Vocus Group Ltd (ASX: VOC) has seen short interest fall slightly to 12.3%. Investor sentiment is low in the telco industry amid concerns over weaker than expected NBN margins and increased competition.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise to 11.3%. Unfortunately for short sellers, last week the department store operator’s shares rose strongly after three directors dipped into the market to buy shares.
- NEWS CORP (ASX: NWS) has entered the top ten with 11.2% of its shares held short. Short interest has risen sharply since this time last week despite there being no obvious catalyst.
- Orocobre Limited (ASX: ORE) has seen short interest remain flat at 11%. Short sellers have been capitalising on unfavourable weather conditions which have impacted Orocobre’s production in FY 2018.
- HT&E Ltd (ASX: HT1) has returned to the top ten with 11% of its shares held short. The outdoor advertising company may be being targeted due to its issues with the ATO relating to previous tax returns.
I would forget HT&E and consider buying one of these stellar growth shares which have the potential to be multi-year market-beaters.
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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 Nanosonics Limited and Vocus Communications Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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.