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 17.7% of its shares held short, up slightly since last week. The graphite producer's shares have come under pressure recently following a very disappointing quarterly update.
- Inghams Group Ltd (ASX: ING) has seen its short interest rise once again, this time to 16.6%. Short sellers have been targeting the poultry producer on the belief that higher input costs are going to lead to decreased profitability.
- Nufarm Limited (ASX: NUF) has short interest of 15.5%, which is up slightly week on week. Nufarm is another company that has been impacted by the drought. This led to it recently releasing an underwhelming half year result and reasonably bleak outlook.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 15.4%. Although JB Hi-Fi released a solid third quarter update and reaffirmed its full year guidance recently, short sellers don't appear to be giving up just yet.
- NEXTDC Limited (ASX: NXT) has short interest of 15%, which is flat week on week. Short sellers appear to be targeting the data centre operator due to their belief that its growth won't justify the premium its shares trade at.
- Galaxy Resources Limited (ASX: GXY) has experienced a small drop in short interest to 14%. Although lithium prices are still under pressure, recent M&A activity in the industry appears to have short sellers on edge.
- Bellamy's Australia Ltd (ASX: BAL) has short interest of 13.1%, up strongly week on week. Although Bellamy's recently received SAMR accreditation for one of its products, it wasn't for its key organic infant formula product. These delays are costing the company both sales and market share in China.
- Orocobre Limited (ASX: ORE) has short interest of 12.4%, which is up slightly week on week. Although M&A activity has led to improved sentiment in the lithium industry, short sellers aren't giving up on the lithium miners just yet.
- Metcash Limited (ASX: MTS) has 11.7% of its shares held short, which is down slightly week on week. Increased competition from ALDI and Lidl may have investors worried.
- BWX Ltd (ASX: BWX) has seen its short interest rebound to 11.2%. Short sellers will have been celebrating last week when another profit downgrade from the company behind the Sukin brand led to its shares crashing lower.
