At the start of each week I like to 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 an indication that something isn’t quite right.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Syrah Resources Ltd (ASX: SYR) continues to be the most shorted share on the ASX with 17.6% of its shares held short, down slightly since last week. A disappointing recent quarterly update out of the graphite miner has weighed heavily on its shares.
- Inghams Group Ltd (ASX: ING) has seen its short interest rise strongly again to 16.3%. There are concerns that the droughts could hit the poultry producer’s margins through higher input costs.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest slide week on week to 15.4%. Short sellers may have been closing positions after JB Hi-Fi released a solid third quarter update and reaffirmed its full year guidance despite the housing market downturn.
- NEXTDC Limited (ASX: NXT) has short interest of 15%, which is down slightly week on week. The data centre operator’s shares may have come onto the radar of short sellers due to the sky high multiples that they trade on.
- Nufarm Limited (ASX: NUF) has short interest of 15%, which is up slightly week on week. The crop protection and specialist seed company’s disappointing half year result and soft outlook has put a lot of pressure on its shares.
- Galaxy Resources Limited (ASX: GXY) has seen a material drop in short interest to 14.1%. Short sellers have been targeting Galaxy and its lithium peers due to weakening prices of the white metal, but recent M&A activity in the industry appears to have spooked them.
- Bellamy’s Australia Ltd (ASX: BAL) has short interest of 12.5%, up sharply week on week. Short sellers may believe that it will take longer than expected for Bellamy’s to receive SAMR accreditation for its main infant formula products.
- Orocobre Limited (ASX: ORE) has short interest of 12.3%, which is up slightly week on week. Although M&A activity has lifted sentiment in the industry, short sellers clearly aren’t giving up on the lithium miners just yet.
- Metcash Limited (ASX: MTS) has 11.8% of its shares held short, which is flat week on week. The loss of a major supply contract in South Australia and increasing competition appears to be behind the high level of short interest.
- BWX Ltd (ASX: BWX) has seen its short interest slide to 10.8%. Short sellers may believe that the company’s key Sukin skincare brand isn’t over the worst of its issues yet.
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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 Bellamy's Australia. 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.