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 after its short interest rose to 19.9%. Last week the lithium miner released its full year results and revealed a massive US$283.7 million loss. This was driven by a collapse in lithium prices and impairments.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest remain flat at 17%. This graphite producer has come under pressure due to a sustained decline in the price of the battery making ingredient. This has been caused by subdued demand and growing supply.
- Inghams Group Ltd (ASX: ING) has short interest of 13.75%, which is up slightly week on week. Short sellers will have been pleased to see the poultry company’s shares tumble lower last week after reporting a 24% decline in underlying half year net profit after tax to $42 million.
- Orocobre Limited (ASX: ORE) has seen its short interest rise slightly again to 13.7%. Short sellers appear to believe that things will get worse before they get better for this lithium miner.
- Speedcast International Ltd (ASX: SDA) has short interest of 13%, which is flat week on week. The communications satellite technology provider’s shares have been suspended for much of this month and will remain so until February. Speedcast requested the suspension pending the release of its upcoming results. This doesn’t look likely to be good news.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest rise to 11.6%. Short interest has been building this month ahead of the horticulture company’s upcoming results release. It appears as though some short sellers believe another guidance downgrade could be coming.
- Metcash Limited (ASX: MTS) is a new entry in the top ten with short interest of 11.3%. It has replaced high flying retailer JB Hi-Fi Limited (ASX: JBH), which has dropped out after a number of short sellers cut their losses.
- GWA Group Ltd (ASX: GWA) has short interest of 11.2%, which is down week on week once again. Last week the building products company released its half year results and revealed a 69% decline in total net profit after tax to $23.6 million.
- Nearmap Ltd (ASX: NEA) has seen its short interest remain flat at 11%. Short sellers have done well with this one. Nearmap’s shares have fallen heavily in 2020 after it downgraded its guidance for FY 2020.
- Bega Cheese Ltd (ASX: BGA) has seen its short interest ease to 10.7%. Bega Cheese’s shares have come under pressure this year due to fierce competition for milk, which is weighing on the food company’s margins.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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.