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:
- Syrah Resources Ltd (ASX: SYR) has become the most shorted share on the ASX after its short interest rose to 16.7%. The graphite producer has been targeted due to a collapse in the price of the battery making ingredient.
- Galaxy Resources Limited (ASX: GXY) has experienced a sizeable drop in its short interest to 16.6%. Short sellers may believe that this lithium miner's shares have now bottomed and are closing positions.
- Orocobre Limited (ASX: ORE) has seen its short interest remain flat at 13.7%. This lithium miner's shares pushed higher last week after industry giant SQM had its production expansion plan denied by the Chilean government.
- Speedcast International Ltd (ASX: SDA) has short interest of 12.9%, which is down week on week once again. Speedcast has come under pressure over the last 12 months due to its poor performance and massive debt.
- Inghams Group Ltd (ASX: ING) has short interest of 12.6%, which is flat week on week. The poultry producer is being targeted by short sellers because of concerns over rising feed costs due to the droughts.
- NEXTDC Limited (ASX: NXT) has 12.2% of its shares held short, which is up slightly week on week once again. Investors appear to be concerned with increasing competition in the data centre market.
- GWA Group Ltd (ASX: GWA) has short interest of 12.1%, which is down slightly week on week. Short sellers have been targeting the building products company after it warned that tough trading conditions would impact its performance in FY 2020.
- Nearmap Ltd (ASX: NEA) has seen its short interest jump to 12%. Short sellers have been shorting its shares amid concerns over growing competition and the impact on its margins that its increased investments in sales, marketing, and R&D is having.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 11.9%. Short sellers continue to target this retailer despite its very strong gains in 2019. They appear to believe that online competition will eat away at the retailer's margins over the coming years.
- Bega Cheese Ltd (ASX: BGA) is back in the top ten with short interest of 11%. The diversified food company is being targeted due to unprecedented competitive milk supply conditions. This is expected to weigh on its performance in FY 2020 and lead to a fall in profits.
