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) continues to be the most shorted ASX share with short interest of 12.6%. Investors appear concerned that the department store operator could be left behind by the accelerating shift to online shopping. Also of note is news that QBE Insurance Group Ltd (ASX: QBE) has stopped providing insurance to suppliers who want to cover the risk of not getting paid by Myer.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7%. This communications satellite technology provider’s shares have been suspended for many months as it declares itself bankrupt.
- Inghams Group Ltd (ASX: ING) has 9.35% of its shares held short, which is up slightly week on week. Earlier this year the poultry company warned that the pandemic had caused an unfavourable shift in its sales mix. This looks set to lead to a disappointing result in FY 2020.
- Webjet Limited (ASX: WEB) has seen its short interest reduce to 9.1%. Short sellers appear to believe that Webjet’s shares are overvalued and that the market is expecting too much from the travel booker in the near term.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest reduce to 8.6%. Short sellers have been going after the regional bank following a soft half year result and a weak outlook.
- Nearmap Ltd (ASX: NEA) has seen its short interest edge lower again to 8.5%. Short sellers may be regretting this one. Last week the aerial imagery and location data technology company’s shares rocketed higher after being the subject of a positive broker note.
- Southern Cross Media Group Ltd (ASX: SXL) has seen its short interest rise to 8.3%. The media company appears to have been targeted due to weak advertising markets. Some of its rivals have noted that advertisers are pushing back campaigns until later this year because of the pandemic.
- Galaxy Resources Limited (ASX: GXY) has 8.1% of its shares held short, which up week on week. Short sellers have been targeting Galaxy due to the sustained weakness in lithium prices.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall to 8%. I suspect that short sellers are going after this biopharmaceutical company due to its lofty valuation.
- JB Hi-Fi Limited (ASX: JBH) has returned to the top ten with 7.7% of its shares held short. Short sellers refuse to give up on the retail giant despite its strong performance during the pandemic.
Finally, instead of those most shorted shares, I would be buying the exciting shares recommended below...
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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.
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