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 despite another reduction in its short interest to 13.6%. It appears as though traders believe the pandemic has hastened the structural decline of department stores.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%. This communications satellite technology provider’s shares remain suspended while it declares itself bankrupt.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest remain flat at 10.9%. A number of this retail group’s brands look likely to have been impacted greatly by the pandemic. This could mean soft results and lower dividends in FY 2020 and FY 2021.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 10.7%. Short sellers were closing their positions despite Chinese lithium prices tumbling to their lowest levels of the year last week.
- Webjet Limited (ASX: WEB) has jumped into the top ten with short interest of 9.7%. Traders may believe the online travel agent’s shares are overvalued after a strong rebound. Especially given the dilution caused by its capital raising.
- Orocobre Limited (ASX: ORE) has seen its short interest slide to 9.4%. This lithium miner’s shares were strong performers last week, possibly due to short sellers closing positions. Its shares have been hammered in recent times due to a collapse in lithium prices.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.3%. Traders may be targeting the biopharmaceutical company on the belief that its outlook doesn’t justify the lofty valuation its shares trade on.
- Nearmap Ltd (ASX: NEA) has seen its short interest edge higher to 9.3%. Unfortunately for short sellers, this aerial imagery technology company’s shares have been racing higher in recent weeks after a positive market update.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.2%, which is down slightly week on week. Pilbara is another lithium miner which experienced a decline in short interest last week. Short sellers may believe the worst is over for the industry.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall week on week to 9%. It appears as though some short sellers have been closing positions in response to the retailer’s solid sales performance during the pandemic.
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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 Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited and Webjet Ltd. The Motley Fool Australia has recommended Nearmap Ltd. 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.