At the start of each week I like to take a look at ASIC’s short position report to find out which shares are being targeted by short sellers. This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right. With that in mind, here are the 10 most shorted shares on the ASX this week: JB Hi-Fi Limited (ASX: JBH) remains the most shorted share on the ASX with 19.8% of its shares held short. It appears that short sellers are not giving up…
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At the start of each week I like to take a look at ASIC’s short position report to find out which shares are being targeted by short sellers.
This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right.
With that in mind, here are the 10 most shorted shares on the ASX this week:
- JB Hi-Fi Limited (ASX: JBH) remains the most shorted share on the ASX with 19.8% of its shares held short. It appears that short sellers are not giving up on this one despite its reasonably positive trading update last month.
- Orocobre Limited (ASX: ORE) has short interest of 16.8%, up slightly since last week. Last week was one to forget for short sellers after Orocobre’s shares rocketed higher on the back of no news.
- Galaxy Resources Limited (ASX: GXY) now has short interest of 16.4%. Short sellers appear to have topped up positions after the release of a disappointing production update late last month.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest continue to slide, this time to 15.3%. Last week Syrah was the best performer on the ASX 200, possibly driven by short sellers buying back shares to close positions.
- Inghams Group Ltd (ASX: ING) has 13.1% of its shares held short, down slightly since last week. Short interest has shot up over the last few months amid concerns that the poultry company would be hit hard by higher input costs due to the impact of the droughts.
- Metcash Limited (ASX: MTS) has 12.3% of its shares held short, down slightly since last week. The wholesale distributor has come under pressure this year due to rising competition and the loss of its major contract to supply Drakes South Australia.
- InvoCare Limited (ASX: IVC) now has 12% of its shares held short, up strongly since last week. The funeral company’s relatively high PE ratio and its low medium term growth prospects could be the reason for the worryingly high short interest.
- BWX Ltd (ASX: BWX) has seen its short interest slide to 11.8%. The personal care products company has come under pressure this year due to a failed takeover bid and disappointing guidance for FY 2019.
- Domino’s Pizza Enterprises Ltd (ASX: DMP) has continued to see its short interest fall. The pizza chain operator now has just under 11.5% of its shares in the hands of short sellers. They appear to believe that the company is over the worst of its issues now and have been closing positions.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise to just under 11.5%. The department store operator has recently seen some of directors buying shares on-market. This could be a sign that they are confident in the company’s turnaround plan.
I would suggest investors skip Myer and look at these top growth shares instead.
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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 BWX Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited and InvoCare 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.