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.
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%. One person that doesn't agree with short sellers is Tim Carleton from Auscap. On Friday he named JB Hi-Fi as a buy at the Sohn Hearts and Mind Conference.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise week on week to 16.6%. Short sellers have been increasing their stakes despite a series of positive announcements out of the graphite miner.
- Orocobre Limited (ASX: ORE) has short interest of 15.3%, down sharply again since last week. Investor sentiment in the lithium space appears to have improved this month. Not least since Orocobre's investor update.
- Galaxy Resources Limited (ASX: GXY) is another lithium miner which has experienced a decline in short interest. It currently stands 14.9%, down from 15.1% last week.
- Inghams Group Ltd (ASX: ING) has 13.1% of its shares held short, up slightly since last week. The poultry company's shares hit a 52-week high last week despite concerns that it could be impacted by rising input costs.
- Metcash Limited (ASX: MTS) has 12.3% of its shares in the hands of short sellers. Short sellers appear concerned by increasing competition from the likes of ALDI.
- InvoCare Limited (ASX: IVC) has 12% of its shares held short, which is flat on last week. I suspect that short sellers are targeting the funeral company due to its high PE ratio and low growth prospects.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest rise to 11.6%. A disappointing AGM update has brought the pizza chain operator back onto the radar of short sellers.
- BWX Ltd (ASX: BWX) has seen its short interest rebound to 11.4%. The personal care products company may have been targeted due to its slowing Sukin sales.
- Myer Holdings Ltd (ASX: MYR) has climbed back into the top ten with short interest of 10.9%. Last week Myer released its latest sales update and revealed that it has had a very poor start to FY 2019.
