Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.
This is because I believe it is well 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 Australian share market despite its short interest easing slightly to 12.1%. Short sellers appear to believe the department store operator will struggle because of the accelerating shift to online shopping.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7% once again. Short sellers have done very well with this one. The communications satellite technology provider’s shares have been suspended for a few months as it finalises its bankruptcy.
- Webjet Limited (ASX: WEB) has seen its short interest fall week on week to 9.8%. Webjet shares have been among the worst performers on the ASX 200 in 2020 because of the pandemic. Some short sellers don’t appear to believe the worst is over for the company and its shares.
- Inghams Group Ltd (ASX: ING) has 9.5% of its shares held short, which is down slightly week on week. Last week the poultry company’s shares came under pressure after one of its processing plants in Victoria was closed after five employees tested positive for coronavirus. Outside this, there are concerns that its performance in FY 2020 could be impacted by an unfavourable sales mix.
- Nearmap Ltd (ASX: NEA) has seen its short interest rise slightly to 8.3%. Nearmap has come onto the radar of short sellers this year after large churn events led to a guidance downgrade. They may be expecting more churn events because of the pandemic.
- Zip Co Ltd (ASX: Z1P) has entered the top ten with 8.1% of its shares held short. Short sellers may be targeting the buy now pay later (BNPL) provider because of its lofty valuation and a recent rise in bad debts.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 8%. I suspect that the valuation of this biopharmaceutical company’s shares is the reason for high short interest.
- FlexiGroup Limited (ASX: FXL) has seen its short interest rise to 7.9%. The financial services company has been reporting strong BNPL growth, but there remain questions over the rest of its business.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.9%. Last week the regional bank lifted its coronavirus provisions and warned that there could be more to come.
- Orocobre Limited (ASX: ORE) has seen its short interest rise again week on week to 7.6%. Short sellers have been going after Orocobre due to ultra-low lithium prices.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended FlexiGroup Limited and 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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