At the start of each week 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) is once again the most shorted share on the ASX with short interest rising to 20%. Short sellers don’t appear to believe that trading conditions will get any easier in FY 2020 for this lithium miner. Last month it posted a massive US$283.7 million loss due to free-falling lithium prices and material impairments.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest remain flat at 17.2%. The graphite producer has been targeted by short sellers due to a collapse in the price of the battery making ingredient because of an oversupply.
- Orocobre Limited (ASX: ORE) has seen its short interest stay flat at 13.8%. The lithium miner is yet another battery materials company which has been targeted successfully by short sellers over the last 18 months.
- Inghams Group Ltd (ASX: ING) has short interest of 13.7%, which is down slightly week on week. This poultry company’s shares came under pressure last month after posting a 24% decline in its underlying half year net profit.
- 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 almost all of February and won’t return until March 13. Things don’t look good for Speedcast.
- Metcash Limited (ASX: MTS) has short interest of 12.3%, up week on week once again. Short sellers may believe that the wholesale distributor will underperform due to the loss of some key contracts in 2019.
- Nearmap Ltd (ASX: NEA) has seen its short interest rise once again to 11.7%. The aerial imagery technology and location data company’s shares have fallen heavily this year due to a surprise guidance downgrade for FY 2020. Short sellers appear to believe that a further downgrade could be coming due to the coronavirus outbreak.
- GWA Group Ltd (ASX: GWA) has short interest of 10.6%, which is down week on week once again. The building products company released a disappointing half year result last month and revealed a 69% decline in total net profit after tax to $23.6 million.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest fall materially to 10.4%. Short sellers may be closing positions after Costa maintained its guidance last month.
- JB Hi-Fi Limited (ASX: JBH) is back in the top ten with short interest of 10.3%. Short sellers closed positions after its stellar half year result, but appear to be back due to coronavirus concerns. JB Hi-Fi is one of many retailers facing uncertainty of supply chain disruption.
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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.
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