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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.
