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 its short interest flat at 19.9%. Last month the lithium miner posted a massive US$283.7 million loss due to freefalling lithium prices and material impairments.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise to 17.2%. Short sellers have been targeting this graphite producer due to a collapse in the price of its produce. This has been caused by subdued demand and growing supply. The company is now managing its production in the hope of easing the oversupply.
- Inghams Group Ltd (ASX: ING) has short interest of 13.8%, which is up slightly week on week. This poultry company’s shares tumbled lower last month after its half year results disappointed. Inghams posted 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 to 13.8%. Short sellers may believe that trading conditions will deteriorate further 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 were suspended for almost all of February and will now remain so until March 13.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest rise to 11.8%. Last week the horticulture company released its calendar year 2019 results which were in line with expectations. It also reaffirmed its guidance, but warned that this assumes no impact from the coronavirus outbreak.
- Nearmap Ltd (ASX: NEA) has seen its short interest rise to 11.6%. Nearmap’s shares have fallen heavily in 2020 after it downgraded its guidance for FY 2020. Short sellers don’t appear convinced that the worst is over just yet.
- Metcash Limited (ASX: MTS) has short interest of 11.5%, up slightly week on week. Investors may be concerned that the wholesale distributor could underperform due to the loss of some key contracts.
- GWA Group Ltd (ASX: GWA) has short interest of 10.7%, which is down week on week once again. Last month the building products company released its half year results and revealed a 69% decline in total net profit after tax to $23.6 million.
- Webjet Limited (ASX: WEB) has entered the top ten with short interest of 10.5%. The online travel agent may have been targeted due to the negative impact that the coronavirus outbreak is having on the travel and tourism market.
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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. The Motley Fool Australia has recommended Webjet 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.