Sometimes it's worth taking a look at ASIC's record of short sold positions to see what companies traders, hedge funds or speculators are betting most heavily against. If a company has more than 10% of its outstanding stock "shorted" it's fair to say some hedge funds or other financial market professionals are expecting it to fall.
Of course short sellers can often be wrong as well as right so their calls should be taken with a pinch of salt.
However, let's take a look at 5 companies on the ASX right now that have more than 10% of their outstanding scrip shorted.
Myer Holdings Ltd (ASX: MYR) is the department store with 11.6% of its shares shorted. It faces rising competition from online shopping and overseas competitors in particular.
Invocare Limited (ASX: IVC) has 12.8% of its shares shorted and its funeral parlours also face the potential for rising competition from discount competitors using the internet to boost their margins.
JB Hi-Fi Limited (ASX: JBH) is the electronic goods retailer that also faces potential pressure on its market share and margins from online overseas giant Amazon.com. Falling market share and margins at the same time would be a terrible combination, but so far JB Hi-Fi continues to perform strongly. It has 15.9% of its shares shorted.
Speedcast International Ltd (ASX: SDA) has 9.3% of its shares shorted as speculators bet that the satellite communications provider's profitability won't meet its valuation.
Metcash Limited (ASX: MTS) is a perennial short seller favourite as the IGA store supplier faces pressure on its margins and market share due to rising competition. It has 12.9% of its shares shorted.
