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:
- Galaxy Resources Limited (ASX: GXY) remains the most shorted share on the ASX with short interest rising slightly to 17.4%. Short sellers appear convinced that the worst is still not over for this lithium miner.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest ease to 16.5%. Short sellers have been targeting the graphite producer due to a collapse in the price of the battery making ingredient.
- Orocobre Limited (ASX: ORE) has seen its short interest remain flat at 13.7%. This lithium miner’s shares have fallen heavily this year due to weakening prices and production downgrades.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.1%, which is down week on week. Speedcast’s massive debt and poor performance has been weighing heavily on investor sentiment.
- Inghams Group Ltd (ASX: ING) has short interest of 12.6%, which is down slightly week on week. The poultry producer has been a target of short sellers due to a significant jump in feed costs because of the droughts.
- GWA Group Ltd (ASX: GWA) has short interest of 12.2%, which is flat week on week. Management’s warning that tough trading conditions would impact its performance in FY 2020 appears to be behind this high level of short interest.
- NEXTDC Limited (ASX: NXT) has 12.1% of its shares held short, which is up slightly week on week again. Growing competition in the data centre market and its sky high valuation could be the reason behind this short interest.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise to 11.9%. Short sellers may believe that online companies like Amazon will eat away at this retailer’s margins over the coming years.
- Costa Group Holdings Ltd (ASX: CGC) has entered the top ten with short interest of 11.1%. The horticulture company has downgraded its earnings guidance at least four times in the last 12 months. Short sellers may expect more of the same in 2020.
- Nearmap Ltd (ASX: NEA) has seen its short interest ease to 10.8%. Concerns over growing competition in the aerial imagery technology and location data market and its increased investments in sales, marketing, and R&D seem to be weighing on sentiment.
Instead of those highly shorted shares, I would snap up these buy-rated stocks which have been tipped for very big things.
Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.
One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…
Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield...
Plus 3 more cheap bets that could position you to profit over the next 12 months!
See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.
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 and Nearmap 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.