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…
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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.
While some of those shares may be best avoided due to their high levels of short interest, these buy rated shares are certainly worth snapping up if you ask me.
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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 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.