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 of 18.7%. This was another week on week increase, which appears to indicate that short sellers believe things can still get worse for this lithium miner.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise to 17.5%. Short sellers continue to target this graphite producer due to a sustained decline in the price of its graphite due to oversupply concerns. Some analysts struggle to see how Syrah will be able to return to full production again without an incredibly sharp increase in demand.
- Orocobre Limited (ASX: ORE) has seen its short interest edge lower to 13.6%. As with Galaxy, short sellers have been targeting this lithium miner’s shares due to weakening lithium prices.
- Speedcast International Ltd (ASX: SDA) has short interest of 13%, which is flat week on week. Later this month the communications satellite technology provider will be releasing its full year results. Short sellers appear to be expecting another weak result.
- Nearmap Ltd (ASX: NEA) has seen its short interest rise to 12.3%. Short sellers will have been celebrating last week after Nearmap’s shares fell 33% following a surprise downgrade to its FY 2020 guidance.
- Inghams Group Ltd (ASX: ING) has short interest of 12.1%, which is flat week on week once again. Concerns over rising feed costs because of the droughts and bushfires have been weighing on this poultry producer’s shares.
- GWA Group Ltd (ASX: GWA) has short interest of 12.1%, which is up slightly week on week. Short sellers have been going after this building products company’s shares after it warned that trading conditions would be tough in FY 2020.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest rise to 11.4%. Short sellers may believe that this horticulture company will be forced to downgrade its 2020 guidance later this month. In 2019 Costa downgraded its guidance multiple times due to tough trading conditions.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 11.2%. Short sellers may regret going after this retailer. Its shares are up almost 80% over the last 12 months.
- Resolute Mining Limited (ASX: RSG) has entered the top 10 with 11% of its shares held short. The gold miner has underperformed its rivals over the last 12 months and short sellers appear confident this trend will continue.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources 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.