Every Monday 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 despite a reduction in its short interest to 13.9%. Short sellers may believe the pandemic has accelerated the structural decline of department stores.
- Speedcast International Ltd (ASX: SDA) has short interest of 12.7%. Speedcast is a communications satellite technology provider which has been suspended for several months. It is currently in the process of declaring itself bankrupt.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest remain flat at 12.5%. Galaxy is one of a number of lithium miners which are under pressure due to a material weakness in lithium prices.
- Orocobre Limited (ASX: ORE) has seen its short interest rise to 11.4%. Orocobre is another lithium miner which short sellers have their eyes on. Especially given concerns that a recovery in lithium prices could be delayed by the pandemic.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest jump to 10.9%. Short sellers appear concerned that some of Super Retail’s businesses may struggle because of the pandemic.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.3%, which is down slightly week on week. Pilbara Minerals is the final lithium miner in the list. Despite falling heavily over the last 12 months, short sellers must believe its shares can go even lower.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat week on week at 9.3%. Some short sellers continue to target the retailer despite its solid sales performance during the pandemic.
- Nearmap Ltd (ASX: NEA) is back in the top ten with short interest of 9.1%. Short sellers may regret this one. Last week the aerial imagery technology company’s shares rocketed higher after it provided a solid market update.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest slide to 9.1%. Short sellers appear concerned over the valuation of the biopharmaceutical company’s shares.
- Inghams Group Ltd (ASX: ING) has short interest of 8.9%, which is up slightly week on week again. The poultry company has had a tough 12 months because of the droughts and pandemic. Some short sellers appear to believe the tough times are here to stay.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and 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.