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 despite its short interest falling to 17.5%. Short sellers continue to target Galaxy due to the oversupply of lithium and the subsequent collapse in prices.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%, which is flat week on week. The communications satellite technology provider’s shares have been suspended since the start of February, but an end is in sight now. Last week Speedcast signed a Forbearance Agreement with its lender group while it sorts out a funding deal.
- Orocobre Limited (ASX: ORE) has seen its short interest rise to 13.1%. As with Galaxy, short sellers have been going after this lithium miner due to falling prices of the battery making ingredient.
- oOh!Media Ltd (ASX: OML) has burst into the top ten with 11.4% of its shares held short. This was a very successful short for trader. In March its shares fell by a whopping 69%. Weak advertising markets because of the coronavirus outbreak are weighing on its performance.
- Inghams Group Ltd (ASX: ING) has short interest of 10.6%, which is down week on week once again. Short sellers appear to believe the poultry company’s prospects are improving due to more people eating at home.
- New Century Resources Ltd (ASX: NCZ) has seen its short interest reduce slightly to 10%. The base metal producer’s shares have fallen heavily this year due to its underwhelming performance.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall slightly to 9.5%. The retailer was a new addition to the top ten last week. This appears to be due to concerns that its stores could be closed if the coronavirus escalates.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.4%. The biopharmaceutical company’s shares may have been targeted due to the premium they trade on. Despite now falling by 60% from their 52-week high, its shares are changing hands at 50x earnings.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.4%, which is down slightly since last week. Pilbara Minerals is another lithium miner that short sellers have successfully targeted due to weakening lithium prices.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest collapse to 9.2%. Short sellers appear to believe that this embattled graphite producer’s shares have now bottomed. Its shares are down a massive 83% over the last 12 months.