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) continues to be the most shorted share on the ASX with short interest rising to 14.3%. Short sellers appear concerned that the pandemic has disrupted its turnaround plans.
- 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 for some time. It now plans to declare itself bankrupt after failing to recapitalise.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest fall week on week to 12.9%. Investors may believe the lithium miner’s shares have bottomed now after falling sharply over the last 12 months due to falling lithium prices.
- Orocobre Limited (ASX: ORE) has seen its short interest drop lower again to 11.5%. Short sellers have been targeting Orocobre due to a collapse in the price of lithium and production disruption during the pandemic. Last week its shares fell to a multi-year low.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest reduce week on week to 9.9%. Unfortunately for short sellers, this retailer’s shares have been storming higher over the last few weeks. It recently revealed strong quarterly sales growth despite the pandemic.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.4%, which is down slightly week on week. Pilbara Minerals is another lithium miner which has come under pressure due to 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 rise to 9.4%. Short sellers appear to believe this biopharmaceutical company’s shares are overvalued and could be due for a correction. They are currently changing hands at 59x trailing earnings.
- Zip Co Ltd (ASX: Z1P) has seen its short interest fall to 9.3%. Short sellers have continued to target the buy now pay later company despite it delivering exceptionally strong growth during the month of April.
- Inghams Group Ltd (ASX: ING) has short interest of 9.1%, which is down week on week again. Short sellers have been targeting the poultry company due to concerns over its narrowing margins.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest rise to 8.9%. It looks as though short sellers expect some of Super Retail’s retail brands to struggle during the pandemic.
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James Mickleboro has no position in any of the stocks mentioned. 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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