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) remains the most shorted share on the ASX with short interest increasing to 17.5%. Earlier this month the graphite producer revealed that it will slash its production significantly in FY 2020 amid weakening prices due to oversupply.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest rise to 17.2%. As with Syrah, this lithium miner has just announced plans to slash its production in response to falling prices of the battery making ingredient.
- Orocobre Limited (ASX: ORE) has seen its short interest slide week on week to 15%. Orocobre is one of many lithium producers that short sellers are targeting due to falling lithium prices.
- Inghams Group Ltd (ASX: ING) has short interest of 14.8%, which is flat week on week. Short sellers have been taking an interest in the poultry producer due to concerns that feed costs could increase materially and weigh on its profits.
- NEXTDC Limited (ASX: NXT) has 13.6% of its shares held short, which is down week on week. The data centre operator is on the radar of short sellers due to rising competition and its sky-high PE ratio.
- GWA Group Ltd (ASX: GWA) has short interest of 12.6%, which is up week on week. Last week the building products company held its AGM and reiterated that trading conditions in FY 2020 would be tough.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest drop to 12%. Much to the dismay of short sellers, this retailer’s shares raced to an all-time high last week following a solid sales update.
- Bank of Queensland Limited (ASX: BOQ) has short interest of 11.9%, which is up strongly week on week. Short interest has jumped following the regional bank’s disappointing full year result. It also warned that FY 2020 would be just as tough, with another decline in earnings forecast.
- Domino’s Pizza Enterprises Ltd (ASX: DMP) is back in the top ten with short interest of 10.5%. The pizza chain operator has experienced a spike in short interest since its U.S. parent released a disappointing quarterly update.
- HUB24 Ltd (ASX: HUB) has short interest of 10.4%, which is down week on week again. Short sellers have been targeting the investment platform provider due to concerns over the impact of low interest rates on its business.
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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 has recommended Domino's Pizza Enterprises Limited and 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.