At the start of each week I like to look at ASIC's short position report to find out which shares short sellers are targeting. This is because I believe it is well worth keeping a close eye on short interest levels as high levels can be a sign that something isn't quite right.
Here are the 10 most shorted shares on the ASX this week:
- JB Hi-Fi Limited (ASX: JBH) continues as the most shorted share on the Australian share market with short interest of 19.6%. Short sellers may be targeting the retailer due to concerns that its performance could be negatively impacted by a cooling housing market and online competition.
- Orocobre Limited (ASX: ORE) has seen its short interest rise again to 17.1%. Concerns over lithium prices and the recent introduction of an export tariff by the Argentine government have weighed on Orocobre's shares of late.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest decline again week-on-week to 16.8%. Short sellers appear to believe that the graphite miner's shares have bottomed after recently hitting a 52-week low.
- Galaxy Resources Limited (ASX: GXY) has experienced a small increase in short interest to 16.6%. Predictions that the lithium price would sink over the coming years has weighed on investor sentiment.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has continued to see its short interest fall. The pizza chain operator now has 12.9% of its shares in the hands of short sellers. With its shares rising strongly over the last six months, many traders appear to have given up on this one.
- Inghams Group Ltd (ASX: ING) now has 12.5% of its shares held short. Investors are betting that the leading poultry producer will be negatively impacted by the NSW droughts due to higher feed costs.
- Metcash Limited (ASX: MTS) short interest has remained flat at 11.8%. This wholesale distributor's shares have come under pressure this year after the loss of a major supply contract.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall again to 11%. Short sellers have been closing positions in a hurry after the department store operator's shares stormed higher last month. Investors are betting on the company's latest turnaround plans being a success.
- G8 Education Ltd (ASX: GEM) has short interest of 10.2%. Short sellers are likely to be targeting G8 Education due to the oversupply of childcare centres and its weakening occupancy levels.
- Harvey Norman Holdings Limited (ASX: HVN) is back in the top ten with short interest of 10.2%. As with JB Hi-Fi, investors believe Harvey Norman could struggle with a cooling housing market.
