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.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources 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.