Every Monday I like to 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) remains the most shorted share on the local market with 19.4% of its shares held short. Last week the poultry producer released its full year results and revealed that the droughts have weighed heavily on its performance. It also warned that profits would be lower in FY 2020.
- Nufarm Limited (ASX: NUF) has seen its short interest remain flat at 18.8%. Short sellers have been taking aim at the agricultural chemical company due to the negative impact of the droughts and concerns over its sales of glyphosate.
- Galaxy Resources Limited (ASX: GXY) has 16.9% of its shares held short, which is up week on week once again. Galaxy’s shares have come under significant pressure due to falling lithium prices and the increasingly bleak outlook for the battery making ingredient due to supply growing quicker than demand.
- Orocobre Limited (ASX: ORE) has seen its short interest increase week on week to 16.2%. As with Galaxy, this lithium miner has been targeted by short sellers due to weakening lithium prices and a bleak outlook for the white metal.
- Bellamy’s Australia Ltd (ASX: BAL) has 15.4% of its shares held short, which is down slightly week on week. Short sellers will be pleased with this one. The infant formula company’s shares crashed lower last week when it released a disappointing full year result due to SAMR accreditation delays.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise again to 14.7%. As with the lithium miners, short sellers appear confident that weakening graphite prices will weigh heavily on its performance in the near term.
- NEXTDC Limited (ASX: NXT) has 14.2% of its shares held short, which is up slightly week on week again. Last week the data centre operator released its full year results which fell a touch short of expectations and led to its shares sinking lower.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall to 14%. Some short sellers appear to be closing their positions after the retailer delivered a strong full year result last month.
- Domino’s Pizza Enterprises Ltd (ASX: DMP) has returned to the top ten after the release of a disappointing full year result last month. Once again, the pizza chain operator fell short of its earnings guidance.
- BWX Ltd (ASX: BWX) has 11.7% of its shares held short, which is down week on week. Unfortunately for short sellers, this personal care products company’s shares rocketed 49% higher in August thanks to its positive guidance for FY 2020.
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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.
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