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:
- Inghams Group Ltd (ASX: ING) has become the most shorted share on the ASX following another rise in short interest. The poultry producer now has 17.2% of its shares held short, amid concerns that the drought will lead to higher input costs and decreased profitability.
- Syrah Resources Ltd (ASX: SYR) has experienced a reasonably sharp reduction in short interest to 15.8%. The graphite producer's shares have come under pressure recently following a very disappointing quarterly update, but some short sellers may believe they have now bottomed.
- Nufarm Limited (ASX: NUF) has short interest of 15.6%, which is up slightly week on week. Nufarm is another company that has been impacted by the drought. It recently led to the company releasing a disappointing half year result and outlook.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall slightly to 15.3%. Short sellers may be regretting this one. Last week the retailer's shares hit a 52-week high following the surprise election result.
- NEXTDC Limited (ASX: NXT) has short interest of 15%, which is flat week on week. Short sellers appear to believe the data centre operator will fall short of expectations in FY 2019.
- Galaxy Resources Limited (ASX: GXY) has short interest of 14%, which is flat week on week. Short sellers will be happy with this one. The lithium miner's shares fell heavily last week after mining giant SQM suggested lithium prices could fall a further 20% this year.
- Bellamy's Australia Ltd (ASX: BAL) has short interest of 13.5%, up week on week. Delays in gaining the SAMR accreditation for its organic infant formula continues to weigh on the company's shares.
- Orocobre Limited (ASX: ORE) has short interest of 12.3%, which is down slightly week on week. A heavy decline in lithium prices has led to Orocobre's shares falling 41% over the last 12 months, much to the delight of short sellers.
- BWX Ltd (ASX: BWX) has seen its short interest rise to 11.8%. Short sellers have increased their position after the personal care products company downgraded its profit guidance materially earlier this month.
- Metcash Limited (ASX: MTS) has 11.5% of its shares held short, which is down week on week. Short sellers appear to believe that increasing competition from German retailers could impact Metcash's performance.
