At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.
While short sellers don’t always get it right, there have been a number of high profile success stories over the last 12 months.
In light of this, I think it is well worth keeping a close eye on short interest levels. These are the 10 most shorted shares on the ASX this week:
- Syrah Resources Ltd (ASX: SYR) continues its long run as the most shorted share on the Australian share market with 21.1% of its shares now held short. Short sellers appear concerned with Syrah’s graphite production and the prices it is commanding.
- JB Hi-Fi Limited (ASX: JBH) has edged a little closer to Syrah with another increase in short interest. It now stands at 18.3%. The embattled retailer is already suffering from heightened competition and will have to contend with the Amazon Prime Day event on Monday.
- Domino’s Pizza Enterprises Ltd (ASX: DMP) has seen its short interest ease week-on-week to 15.1%. Opinion remains divided on the pizza chain operator’s prospects and its ability to achieve guidance this year. It certainly will be one to watch in the up coming earnings season.
- Galaxy Resources Limited (ASX: GXY) has 14.4% of its shares held short this week, down slightly week-on-week. This interest could continue to decline this week after lithium bear Morgan Stanley was revealed to be a major shareholder.
- Orocobre Limited (ASX: ORE) has seen its short interest rise week-on-week again to 13.4%. Short sellers may be targeting Orocobre due concerns that it could fall short of its production guidance.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise slightly to 12.2%. Despite its severe share price decline, short sellers appear to believe things can get worse for the struggling department store operator.
- Vocus Group Ltd (ASX: VOC) has seen its short interest slide again to 12.1%. With the telco company’s shares down 31% since this time last year, some short sellers may be locking in gains ahead of earnings season.
- Inghams Group Ltd (ASX: ING) has burst into the top ten with short interest of 11.9%. The exit of its CEO and bearish broker notes appear to have weighed on investor sentiment. Last week UBS downgraded the poultry company’s shares to a sell rating with a $3.40 price target.
- Metcash Limited (ASX: MTS) has seen its short interest rise again to 11.5%. The expected loss of the Drakes SA supply contract continues to weigh on its shares.
- Australian Agricultural Company Ltd (ASX: AAC) has 11.3% of its shares held short, down slightly week-on-week once again. The agribusiness company’s shares have been a strong performer this month despite the high level of short interest, rising over 12%.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended 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.
- Is the Qantas (ASX:QAN) share price great value? – February 26, 2021 3:47pm
- Why the Resolute Mining (ASX:RSG) share price is pushing higher today – February 26, 2021 3:16pm
- Why the Damstra (ASX:DTC) share price is crashing 11% lower today – February 26, 2021 2:53pm