At the start of each week I look at ASIC's short position report in order 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 a sign that something isn't quite right with a company.
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 continued to be the most shorted share on the ASX with short interest of 16.5%. Short sellers are believed to be targeting the poultry producer due to concerns that the drought has lifted input costs and impacted its margins.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise 16.3%. Last week the graphite miner's shares came under pressure again after it was revealed that Syrah is being dumped out of the ASX 200 index at the next quarterly rebalance.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest slide to 15.5%. Short sellers may believe that the retailer's shares are overvalued after a solid run in 2019.
- Nufarm Limited (ASX: NUF) has short interest of 13.5%, which is up slightly week on week. The agricultural chemical company's shares have come under pressure this year after the droughts weighed heavily on its performance.
- Orocobre Limited (ASX: ORE) has short interest of 12.8%, which is up slightly week on week. The lithium miner's shares have fallen heavily over the last 12 months because of a collapse in lithium prices due to softening demand and increasing supply.
- NEXTDC Limited (ASX: NXT) has 12.2% of its shares held short, which is down slightly since last week. Short sellers may be targeting the data centre operator due to fears that it may not deliver strong enough growth to justify its premium valuation.
- Galaxy Resources Limited (ASX: GXY) has short interest of 12.2%, which is up slightly since last week. Weak lithium prices and concerns that they could still sink even lower in 2019 have weighed heavily on Galaxy's shares.
- Bellamy's Australia Ltd (ASX: BAL) has seen its short interest drop down to 11.3%. The extensive delays Bellamy's has faced in gaining SAMR accreditation for its organic infant formula appear to be behind the high levels of short interest.
- Metcash Limited (ASX: MTS) has 10.7% of its shares held short, which is down week on week once again. Short sellers may have been closing their positions after Metcash announced a new supply agreement with Drakes Queensland.
- BWX Ltd (ASX: BWX) has seen its short interest rise slightly to 9.9%. The personal care products company's shares have fallen heavily over the last 12 months due to the sudden deterioration in sales of its key Sukin brand.
