At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.
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) is now the most shorted ASX share with short interest of 12.9%. Last week QBE Insurance Group Ltd (ASX: QBE) stopped providing insurance to suppliers who want to cover the risk of not getting paid by Myer. Australia’s largest provider of trade credit insurance told the ABC that it has severe doubts about Myer’s ability to pay its way.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7%. The communications satellite technology provider is currently in the process of declaring itself bankrupt, much to the delight of short sellers.
- Webjet Limited (ASX: WEB) has seen its short interest rise to 9.7%. Concerns over its valuation and a recent spike in coronavirus cases in Victoria appear to be weighing on this travel agent’s shares.
- Inghams Group Ltd (ASX: ING) has 9.25% of its shares held short, which is down slightly week on week. Short sellers may believe that FY 2020 will be a disappointing year because of the pandemic’s impact on its sales mix.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest lift to 8.8%. A soft half year result and a weak outlook have been weighing on the regional bank’s shares.
- Nearmap Ltd (ASX: NEA) has seen its short interest edge lower again to 8.6%. Short sellers appear to be closing positions after the recent release of a positive update by the aerial imagery technology company.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall to 8.2%. The biopharmaceutical company’s shares may have been targeted on valuation grounds. They are currently changing hands for 70x earnings.
- Southern Cross Media Group Ltd (ASX: SXL) has entered the top ten with short interest of 8%. Weak advertising markets during the pandemic have weighed heavily on this media company’s shares.
- Galaxy Resources Limited (ASX: GXY) has 7.6% of its shares held short. Last week, rival Orocobre Limited (ASX: ORE) reported record low lithium carbonate sale prices. Galaxy is likely to be experiencing similar weakness with its pricing.
- Metcash Limited (ASX: MTS) has 7.2% of its shares in the hands of short sellers. The loss of some major supply contracts could be why short sellers are going after this wholesale distributor.
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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 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.