These are the most shorted shares on the ASX

Syrah Resources Ltd (ASX:SYR), Domino's Pizza Enterprises Ltd (ASX:DMP), and Greencross Limited (ASX:GXL) are three of ten shares being targeted by short sellers this week…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Every Monday I like to start the week with a look at ASIC's short position report to find out which shares are being targeted by short sellers.

A short seller borrows shares to sell on market with the aim of buying them back at a lower price down the line and profiting from the difference. As it is a high-risk strategy with the potential for unlimited losses, short sellers will often only take a short position if they believe they have a high probability of success.

Because of this I think it is a good idea for investors to keep a close eye on short interest levels. According to data provided by ASIC, here are the 10 most shorted shares on the ASX this week:

  • Syrah Resources Ltd (ASX: SYR) continues to be Australia's most shorted share with 19.7% of its shares held short. Short interest in the graphite producer has fallen notably week-on-week, which could be an indication that some short sellers are moving on now.
  • JB Hi-Fi Limited (ASX: JBH) has seen yet another increase in short interest and is closing in fast on Syrah Resources. Its short interest now stands at 19.1%. Short sellers may be targeting the retailer due to increasing competition and a weak performance from its Good Guys brand.
  • Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest remain steady week-on-week at 15.1%. Short sellers are expecting Domino's to fall short of its earnings guidance when it reports its FY 2018 results in August.
  • Galaxy Resources Limited (ASX: GXY) has 14% of its shares held short this week, down slightly week-on-week. Short interest could be on the decline after the lithium miner delivered a strong result last week.
  • Orocobre Limited (ASX: ORE) has seen its short interest fall week-on-week to 13.1%. The lithium miners have been under pressure this year amid concerns that prices of the battery making ingredient could tumble.
  • Myer Holdings Ltd (ASX: MYR) has seen its short interest slide slightly to 12.1%. Many investors appear to have lost faith in the struggling department store operator's turnaround plan.
  • Inghams Group Ltd (ASX: ING) has short interest of 11.9%. The surprise exit of the poultry company's CEO and several negative broker notes may have weighed on investor sentiment. Earlier this month UBS downgraded its shares to a sell rating with a $3.40 price target.
  • Vocus Group Ltd (ASX: VOC) has seen its short interest slide once again to 11.9%. Some short sellers may believe the telco company's shares have bottomed now.
  • Metcash Limited (ASX: MTS) has seen its short interest ease week-on-week to 11.3%. The wholesale distributor's shares have come under significant pressure due to the expected loss of the Drakes SA supply contract.
  • Greencross Limited (ASX: GXL) has re-entered the top ten with short interest of 10.9%. Concerns over the success of its in-store veterinary clinic rollout have weighed on investor sentiment in recent months.
Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Greencross 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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »