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) continues to be the most shorted share on the ASX with short interest of 18.4%. This was a sharp week on week increase, which may be an indication that short sellers don’t believe the worst is over for this lithium miner.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise to 16.9%. This graphite producer continues to be targeted by short sellers because of a sustained decline in prices due to oversupply concerns.
- Orocobre Limited (ASX: ORE) has seen its short interest edge lower to 13.7%. This lithium miner’s shares have been strong performers in 2020, but short sellers aren’t giving up just yet.
- Speedcast International Ltd (ASX: SDA) has short interest of 13%, which is up slightly week on week. It appears as though short sellers are expecting another disappointing result from this communications satellite technology provider next month.
- Inghams Group Ltd (ASX: ING) has short interest of 12.1%, which is down week on week once again. Concerns over rising feed costs due to the droughts and bushfires are weighing on this poultry producer’s shares.
- Nearmap Ltd (ASX: NEA) has seen its short interest remain flat at 12.1%. Short sellers may believe that growing competition and softening margins could slow its growth in the coming years.
- GWA Group Ltd (ASX: GWA) has short interest of 11.9%, which is flat week on week. This building products company’s shares have come under pressure since it warned that trading conditions would be tough in FY 2020.
- NEXTDC Limited (ASX: NXT) has 11.5% of its shares held short, which is down week on week. Despite this high level of short interest, last week NEXTDC’s shares hit a 52-week high.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest tumble to 11.2%. Short sellers may be going after the retailer due to the belief that it could be in a structural decline due to the rise of online shopping.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest edge slightly lower to 11.1%. Costa continues to be a target of short sellers following its countless earnings downgrades following tough trading conditions in 2019.
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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 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.