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) remains the most shorted share on the ASX with short interest rising to 20.2%. The lithium miner has been targeted by short sellers due to free-falling lithium prices because of an oversupply of the white metal.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise strongly to 18%. An oversupply of graphite has weighed heavily on this miner’s shares. It owns the massive Balama graphite operation.
- Orocobre Limited (ASX: ORE) has seen its short interest edge higher to 14%. The lithium miner is another in the battery materials sector which has been targeted successfully by short sellers due to falling lithium prices.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%, which is up slightly week on week. The communications satellite technology provider’s shares have been suspended for almost six weeks. They were due to return last week but management extended its suspension further. Things look very bleak for Speedcast given its poor performance and material debt.
- Metcash Limited (ASX: MTS) has short interest of 12.8%, which is up week on week once again. Short sellers appear concerned that the loss of some key contracts could weigh on its performance.
- Inghams Group Ltd (ASX: ING) has short interest of 12.5%, which is down materially week on week. Some short sellers may believe the poultry company’s shares have bottom after recent share price weakness. Last month Inghams posted a 24% decline in its underlying half year net profit.
- Nearmap Ltd (ASX: NEA) has seen its short interest slide to 10.8%. Short sellers may also believe that this aerial imagery technology and location data company’s shares have bottomed after falling heavily this year due to a surprise guidance downgrade for FY 2020.
- New Century Resources Ltd (ASX: NCZ) is a new entry in the top ten with short interest of 10.7%. The base metal producer’s shares are down 90% over the last 12 months but short sellers appear to believe they can fall further.
- GWA Group Ltd (ASX: GWA) has short interest of 10.5%, which is down slightly week on week once again. Last month the building products company released a disappointing half year result which 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 9.5%. It appears as though short sellers are closing positions in a hurry after Costa maintained its guidance last month.
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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.