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.
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 with short interest of 12.1%. Last week the department store operator revealed that its operations have been impacted greatly by the pandemic.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7%. The Speedcast share price has been suspended since February while the communications satellite technology provider declares itself bankrupt. Its poor performance and high debt load became too much.
- Inghams Group Ltd (ASX: ING) has 10% of its shares held short, which is up week on week once again. Short sellers have been targeting the poultry company due to concerns over rising input costs and an unfavourable sales mix because of the pandemic.
- Webjet Limited (ASX: WEB) has seen its short interest rise week on week to 9.8%. Given the recent spike in coronavirus cases in Australia, there appear to be concerns that the domestic travel market could take longer to recover than first expected.
- Orocobre Limited (ASX: ORE) has seen its short interest push higher week on week again to 8.6%. Short sellers may believe the worst is not over for the lithium miner due to a collapse in the price of the battery making ingredient and concerns over an oversupply of the metal.
- FlexiGroup Limited (ASX: FXL) has returned to the top ten with 8.4% of its shares held short. While FlexiGroup’s buy now pay later offering is growing strongly, there are concerns over the rest of its business.
- Zip Co Ltd (ASX: Z1P) has short interest of 8.1%, which is up week on week. Short sellers may be going after the buy now pay later provider due to its lofty valuation and a recent rise in bad debts.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest rise slightly to 7.9%. The regional bank has been struggling during the pandemic and recently increased its coronavirus provisions. It also warned that there could be more to come.
- Nearmap Ltd (ASX: NEA) has seen its short interest rise slightly to 7.9%. Opinion remains divided on the aerial imagery technology and location data company’s prospects. So far it has performed strongly during the pandemic, but there are a few doubts that this will be maintained.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall slightly to 7.8%. The biopharmaceutical company recently released its fourth quarter update and revealed a 20% decline in cash receipts. Lockdowns have led to softening sales of its SCENESSE product. It is used to prevent skin damage from the sun in people with erythropoietic protoporphyria.
Finally, instead of those most shorted shares, I would be buying the exciting shares recommended below...
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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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