Every Monday 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:
- Syrah Resources Ltd (ASX: SYR) continues to be the most shorted share on the ASX with its short interest remaining stable at 19.4%. Short sellers have done incredibly well with this one. The graphite producer’s shares are down 68% over the last 12 months and hit a multi-year low last week.
- Nufarm Limited (ASX: NUF) has seen its short interest increase week on week again to 17.8%. The agricultural chemical company’s shares have come under significant pressure over the last 12 months due to largely to the negative impact of the droughts and concerns over its sales of Glyphosate.
- Inghams Group Ltd (ASX: ING) has seen its short interest remain flat at 16.9%. The poultry company is believed to have been targeted due to concerns that the droughts have led to higher input costs and eroded its margins.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rebound to 15.2%. Short sellers may believe that the retailer is going to be impacted negatively by rising online competition.
- Bellamy’s Australia Ltd (ASX: BAL) has seen its short interest increase strongly to 14.2%. Short sellers may think that the infant formula company is going to face even more delays in respect to its application for the SAMR accreditation required to sell its products on the China mainland. This could mean FY 2020 is another disappointing year for Bellamy’s.
- NEXTDC Limited (ASX: NXT) has 14.2% of its shares held short, which is down slightly since last week. Short sellers appear to be targeting the data centre operator due to the high multiples its shares trade on.
- Orocobre Limited (ASX: ORE) has short interest of 13.9%, which is up slightly week on week. The lithium miner has been targeted due to the collapse in lithium prices caused by softening demand and increasing supply.
- Galaxy Resources Limited (ASX: GXY) also has short interest of 13.9%, which has eased since last week. Weak lithium prices and a subdued outlook are attracting short sellers to the lithium miners.
- BWX Ltd (ASX: BWX) has seen its short interest rise to 12.6%. Short sellers appear to believe the personal care products company isn’t over the worst of its issues. BWX’s key Sukin brand has been underperforming materially.
- Bingo Industries Ltd (ASX: BIN) has seen its short interest rise to 12%. The waste management company’s shares have fallen heavily this year following a disappointing guidance downgrade.
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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.