These are the 10 most shorted shares on the ASX

Every Monday 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) continues as the most shorted share on the ASX with short interest of 19.7%. Although the retailer recently released a better than expected trading update, short sellers are holding firm possibly due to concerns over the performance of its Good Guys business.
  • Syrah Resources Ltd (ASX: SYR) has seen its short interest jump week on week to 16.2%. Despite this, Syrah was one of the best performers on the ASX 200 last week following the announcement of a sales agreement and the resumption of production at its Balama project.
  • Orocobre Limited (ASX: ORE) has short interest of 16.1%, down meaningfully since last week. Orocobre’s share price performed very well last week, possibly due to short sellers buying shares to close positions.
  • Galaxy Resources Limited (ASX: GXY) has also seen short interest fall meaningfully since last week. Galaxy now has 15.1% of its shares held short after investor sentiment in the lithium industry improved.
  • Inghams Group Ltd (ASX: ING) has 13% of its shares held short, down slightly since last week. Inghams has been touted as a company that could be hit hard by higher input costs due to the impact of the droughts.
  • InvoCare Limited (ASX: IVC) has 12% of its shares held short, which is flat on last week. Short sellers may be targeting the funeral company due to its relatively high PE ratio and its low growth prospects.
  • Domino’s Pizza Enterprises Ltd (ASX: DMP) has once again seen its short interest fall, this time to 11.3%. However, a disappointing update at its annual general meeting last week may have caught the eye of short sellers.
  • BWX Ltd (ASX: BWX) has seen its short interest slide meaningfully to 10.8%. The personal care products company has come under pressure this year due to a failed takeover bid and disappointing guidance for FY 2019. Some short sellers may believe its shares have bottomed now.
  • IOOF Holdings Limited (ASX: IFL) has entered the top ten with short interest of 10.3%. The financial services company’s shares have fallen heavily this year after disappointing funds under management updates.
  • NEXTDC Ltd (ASX: NXT) is a new entrant in the top ten with 10.3% of its shares held short. Its sky high PE ratio and the lack of a new big name customer announcement has weighed on its shares in recent months.

While I'm a big fan of NEXTDC, I think these tech shares could be better options right now.

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited and NEXTDC 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.

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