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) remains the most shorted share on the ASX with short interest of 14%. Short sellers may regret not closing their positions sooner. The Myer share price rocketed 52% higher last week amid optimism that stores will reopen soon.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest fall week on week to 13.4%. The lithium miner has been one of the most shorted shares for some time due to concerns over supply outstripping demand for the battery making ingredient.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%. Things look very bleak for the communications satellite technology provider. Last month it 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 11.9%. As with Galaxy, short sellers have been targeting Orocobre due to a collapse in the price of lithium. In addition to this, Orocobre recently advised that its development plans at its Argentine operation have been delayed by the pandemic.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest reduce week on week to 10.2%. Unfortunately for short sellers, last week the retailer released an update which revealed that its sales were very strong during the third quarter.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.5%, which is down slightly week on week. As with the other lithium miners, short sellers have been going after Pilbara Minerals due to weak lithium prices and concerns that a recovery could be delayed because of the pandemic.
- Zip Co Ltd (ASX: Z1P) has seen its short interest remain flat at 9.4%. As with Myer, short sellers may be regretting this one. Last week the buy now pay later provider’s shares jumped 50% higher after positive industry news and a strong April update.
- Inghams Group Ltd (ASX: ING) has short interest of 9.3%, which is down sharply week on week. With the country on the verge of reopening, short sellers may believe the worst is behind the poultry company.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest slide to 9.3%. The biopharmaceutical company’s shares trade at a significant premium to the market average. Short sellers may believe Clinuvel won’t be able to deliver the level of growth that justifies this.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest fall to 8.8%. Short sellers may be concerned that some of the retailer’s brands, such as Macpac, 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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