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) has cemented its position as the most shorted share on the ASX with a rise in short interest to 19.3%. Short sellers appear to believe that market conditions aren't going to become favourable any time soon.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise week on week to 17%. As with the lithium miners, this graphite producer has come under pressure due to a sustained decline in the price of its product. This has been caused by oversupply concerns.
- Inghams Group Ltd (ASX: ING) has short interest of 13.5%, which is up strongly week on week. Short sellers have been targeting Inghams due to concerns over rising feed costs. These are expected to hit the poultry producer's margins materially.
- Orocobre Limited (ASX: ORE) has seen its short interest rise slightly to 13.3%. As with Galaxy, short sellers have been targeting this lithium miner due to weakening lithium prices from softer demand and increasing supply.
- Speedcast International Ltd (ASX: SDA) has short interest of 13%, which is up week on week. The communications satellite technology provider's shares remain suspended pending the release of an announcement relating to its upcoming results. It has requested the suspension until February 27.
- GWA Group Ltd (ASX: GWA) has short interest of 11.5%, which is down week on week once again. Later this morning this building products company will be releasing its half year results. Last year it warned that trading conditions would be tough in FY 2020.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest rise to 11.1%. Short interest has begun to build again ahead of the horticulture company's upcoming results release.
- Nearmap Ltd (ASX: NEA) has seen its short interest fall notably to 11%. Short sellers may believe that Nearmap's shares have now bottomed following the disappointing guidance downgrade late last month.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall slightly to 10.9%. Much to the dismay of short sellers, last week the retailer's shares surged higher after the release of a strong half year result. JB Hi-Fi also lifted its guidance for the full year.
- Bega Cheese Ltd (ASX: BGA) has seen its short interest ease to 10.8%. The catalyst for this high level of short interest is likely to be fierce competition for milk which is weighing on the food company's profits.
