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.
Whilst 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) has retained the top spot for another week with short interest of 19.5%. Short sellers will no doubt have been pleased to see the graphite miner recently downgrade its full-year production guidance.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise slightly to 19.1%. Today is a big day for short sellers with the embattled retailer due to release its full-year results. A surprisingly good result could lead to a potential short squeeze.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest rise to 16.9%. Although Galaxy has a lot going for it at the moment, short sellers appear to be betting that future lithium prices will undo this.
- Orocobre Limited (ASX: ORE) has short interest of 15.4%, up sharply week-on-week for a second week in a row. Short interest continues to rise despite Orocobre recently announcing a record sales result with record prices received for its lithium.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest increase slightly week-on-week to 15.2%. Later this week the pizza chain operator will release its highly anticipated full-year results. Short sellers still appear confident that it will fall short of expectations either with its results or FY 2019 guidance.
- Inghams Group Ltd (ASX: ING) has 13.1% of its shares held short, up week-on-week. The sudden exit of the poultry producer's CEO and competitive pricing appears to have caught the attention of short sellers.
- Metcash Limited (ASX: MTS) has seen its short interest rise week-on-week to 11.8%. The probable loss of the Drakes SA supply contract continues to weigh on investor sentiment.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall for a second week in a row to 11.5%. The department store operator's shares are up 14% since this time last month, possibly indicating that some short sellers feel it has bottomed now.
- Greencross Limited (ASX: GXL) has short interest of 11.2%, up again week-on-week. The struggling integrated pet care company looks set to release a disappointing full-year result later this month due to weakness in its veterinary business.
- Vocus Group Ltd (ASX: VOC) has seen its short interest slide to 10.5%. The telco company has been tipped by a few brokers to disappoint when it releases its results later this month.
