At the start of each week 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:
- Syrah Resources Ltd (ASX: SYR) has become the most shorted share on the ASX again after its short interest rose to 17.3%. On Friday the graphite producer revealed its production plans for the near term. Syrah advised that it will reduce its production significantly in FY 2020, but aims to also cut costs materially.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 16.9%. Short sellers continue to target this lithium miner due to a sharp drop in lithium prices following softening demand and an oversupply.
- Orocobre Limited (ASX: ORE) has seen its short interest slide week on week to 15.9%. Orocobre is another battery-ingredient producer which short sellers are targeting due to falling lithium prices.
- Inghams Group Ltd (ASX: ING) has short interest of 14.8%, down slightly week on week. This week the poultry producer will hold its strategy briefing and could release a trading update. Many investors expect the company to reveal a sizeable feed cost headwind.
- NEXTDC Limited (ASX: NXT) has 14% of its shares held short, which is down slightly week on week. Short sellers have been targeting the data centre operator due to rising competition and the premium its shares trade at.
- JB Hi-Fi Limited (ASX: JBH) has re-entered the top ten with short interest of 12.9%. Short sellers aren’t giving up on this one despite the retailer’s shares recently hitting an all-time high.
- GWA Group Ltd (ASX: GWA) has short interest of 12.4%, which is up week on week again. Short sellers have been increasing their interest in the building products company after it warned that trading conditions in FY 2020 would be tough.
- HUB24 Ltd (ASX: HUB) has short interest of 11.1%, which is down week on week. Short sellers continue to target the investment platform provider due to concerns over the impact of low interest rates on its business model.
- Blackmores Limited (ASX: BKL) has seen its short interest slide to 10.5%. It appears as though short sellers are not convinced that the health supplements company is over the worst of its issues. Blackmores has been struggling in China.
- Bingo Industries Ltd (ASX: BIN) has short interest of 10.45%, which is up slightly week on week. The waste management company’s poor performance in FY 2019 seems to have caught the eye of short sellers.
- Bank of Queensland Limited (ASX: BOQ) has entered the top ten with short interest of 10.4%. Last week the regional bank released a very disappointing full year result and warned that FY 2020 would be just as tough. Another decline in earnings is expected.
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James Mickleboro owns shares of Galaxy Resources Limited and NEXTDC Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended Hub24 Ltd. 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.