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:
- Myer Holdings Ltd (ASX: MYR) has become the most shorted share on the ASX after its short interest climbed to 13.9%. Investors appear concerned that the department store operator will be impacted greatly by the coronavirus pandemic.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest fall week on week to 13.8%. The lithium miner has been under pressure for some time due to weak lithium prices. The recovery in prices is now expected to be delayed because of the coronavirus.
- Speedcast International Ltd (ASX: SDA) has short interest of 12.5%, which is down week on week. Last month the communications satellite technology provider revealed plans to declare itself bankrupt after failing in its efforts to recapitalise.
- Orocobre Limited (ASX: ORE) has seen its short interest drop lower again to 12.2%. Short sellers have been targeting the company due to a collapse in the price of lithium and concerns that a recovery could be some time away.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest increase week on week to 10.7%. Weakness in the housing market and consumer spending appear to have attracted short sellers to this retail giant’s shares.
- Inghams Group Ltd (ASX: ING) has short interest of 10%, which is flat week on week. Short sellers have been targeting the poultry company this year due to concerns over narrowing margins.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.6%, which is up slightly week on week. Pilbara Minerals is another lithium miner under pressure because of weak lithium prices and concerns that a recovery could be delayed because of the pandemic.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest slide to 9.4%. The biopharmaceutical company recently announced plans to launch its key SCENSSE product in China in the near future. But that hasn’t put off short sellers who appear to believe its shares are severely overvalued.
- Zip Co Ltd (ASX: Z1P) has seen its short interest rise week on week to 9.4%. The buy now pay later provider may have been targeted by short sellers due to concerns the pandemic will slow its growth and expansion plans and also lead to a rise in bad debts.
- Super Retail Group Ltd (ASX: SUL) has entered the top ten with short interest of 9.2%. Short sellers may believe that some of Super Retail’s brands will not fare well during the coronavirus crisis.
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James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. 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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