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 of 17.75%. Investors have been targeting the graphite miner due to a collapse in the price of the battery making ingredient. Prices have fallen so hard that Syrah will slash its production significantly in FY 2020.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 16.4%. Galaxy is one of a number of lithium miners that have come under pressure due to a sustained decline in prices of the white metal.
- GWA Group Ltd (ASX: GWA) has short interest of 14.5%, which is up sharply week on week. Last month the building products company held its AGM and warned that trading conditions would be tough in FY 2020.
- Orocobre Limited (ASX: ORE) has seen its short interest slide week on week again to 14%. Orocobre is another battery-ingredient producer that short sellers are targeting due to falling lithium prices.
- Inghams Group Ltd (ASX: ING) has short interest of 13.8%, which is flat week on week. Short sellers are betting on higher feed costs weighing heavily on its profits in FY 2020.
- NEXTDC Limited (ASX: NXT) has 13.2% of its shares held short, which is flat week on week. NEXTDC recently reaffirmed its FY 2020 guidance for EBITDA growth of 17% to 23%, but that hasn’t put off short sellers.
- Bank of Queensland Limited (ASX: BOQ) has short interest of 12.9%, which is up again week on week. The regional bank’s disappointing full year result and guidance appears to have been the catalyst for this. Management warned that FY 2020 would be just as tough and expects another decline in earnings.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest drop to to 11.6%. Short sellers may be closing positions after the retailer’s shares raced to an all-time high following a solid sales update.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.5%, which is up again week on week. Another disappointing performance in FY 2019 and a challenging outlook appear to be why short sellers are targeting Speedcast.
- Costa Group Holdings Ltd (ASX: CGC) is back in the top ten with short interest of 11.3%. The horticulture company has disappointed investors with a series of downgrades. Investors may be concerned this poor run is not over.
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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 COSTA GRP FPO. 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.