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 despite yet another reduction in its short interest to 13.25%. The market appears concerned that the pandemic has accelerated the structural decline of department stores and pushed people online.
- Speedcast International Ltd (ASX: SDA) continues to have short interest of 13.2%. This communications satellite technology provider’s shares have been suspended since February. It is currently in the process of declaring itself bankrupt.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest pull back to 10.3%. Short sellers have been targeting Super Retail due to concerns that some of its brands could struggle during the pandemic.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 9.3%. A number of lithium miners have been experiencing declines in short interest this month. Traders may believe their shares have now bottomed.
- Webjet Limited (ASX: WEB) has short interest of 9.2%, which is down week on week. Short sellers appear to be targeting the online travel agent due to concerns over its valuation. Webjet’s market cap is now higher than it was in January despite the disruption and uncertainty caused by the pandemic.
- Inghams Group Ltd (ASX: ING) has returned to the top ten with 9.2% of its shares held short. A change in sales mix is expected to weigh heavily on this poultry company’s performance in FY 2020.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall to 9.1%. The biopharmaceutical company’s shares have fallen almost 40% over the last 12 months. It appears as though short sellers believe they can still go lower.
- Nearmap Ltd (ASX: NEA) has seen its short interest edge lower to 9%. Short sellers may be closing their positions after the aerial imagery technology company’s performance remained solid in the second half despite the pandemic.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 9%. Last week the retailer revealed explosive sales growth during the second half. Short sellers don’t appear convinced this strong form will continue in the months ahead.
- Orocobre Limited (ASX: ORE) has short interest of 8.8%, which is down week on week. Short sellers appear to be closing positions and moving on from the lithium miners. They may believe that their declines are now over.
Finally, instead of those most shorted shares, I would be buying the exciting shares recommended below...
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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.
- Why NAB and Telstra shares could be top options for income investors – July 8, 2020 6:37am
- Why I would buy Nanosonics and these ASX growth shares – July 7, 2020 5:30pm
- 3 of the best ETFs for ASX investors to buy in July – July 7, 2020 4:20pm