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) remains the most shorted share on the Australian share market with 12% of its shares held short. The department store operator continues to be targeted by short sellers who appear to believe the shift to online shopping will accelerate its structural decline.
- Webjet Limited (ASX: WEB) has seen its short interest spike to 12%. A recent rebound in the Webjet share price appears to have caught the eye of short sellers. Especially given how recent border closures have hit the domestic travel market recovery hard. Webjet releases its results this week.
- Speedcast International Ltd (ASX: SDA) continues to have short interest of 11.7%. The communications satellite technology provider’s shares have been suspended since February while it declares itself bankrupt. Last week it made progress and announced that it has received a US$395 million equity commitment to complete its chapter 11 recapitalisation.
- Inghams Group Ltd (ASX: ING) has 10.2% of its shares held short, which is up week on week once again. Short sellers appear to believe a disappointing result is coming from the poultry company due to rising input costs and an unfavourable sales mix.
- Orocobre Limited (ASX: ORE) has seen its short interest push higher week on week again to 8.9%. The lithium miner continues to be a favourite of short sellers due to an oversupply of the battery making ingredient and weak demand.
- InvoCare Limited (ASX: IVC) has entered the top ten with short interest of 7.9%. Investors appear concerned that the funeral company may struggle during the pandemic from social distancing restrictions.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 7.8%. This may be in relation to the impact lockdowns are having on demand for its SCENESSE product. This product is used to prevent skin damage from the sun in people with erythropoietic protoporphyria.
- FlexiGroup Limited (ASX: FXL) has seen its short interest fall week on week to 7.8%. Short sellers remain unsure about the financial services company’s overall prospects despite its growing BNPL business.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall slightly to 7.7%. A series of better than feared updates out of the banking sector may have led to some short sellers closing positions.
- Zip Co Ltd (ASX: Z1P) has short interest of 7.5%, which is down notably week on week. Some short sellers may be closing their positions ahead of its full year results this month. If history is a guide, a strong result could lead to its shares rocketing higher.
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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended FlexiGroup Limited and InvoCare Limited. 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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