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:
- Webjet Limited (ASX: WEB) has become the most shorted share on the ASX with short interest of 13.1%. Short sellers have been increasing their positions following its full year results release last week. They appear to believe the Webjet share price is severely overvalued based on its medium term outlook.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest reduce slightly week on week to 11.9%. Short sellers appear to believe the pandemic is going to undo the hard work the department store operator has put into its turnaround plans.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7% again. The communications satellite technology provider's shares remain suspended while it declares itself bankrupt. It has recently 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 10.3% of its shares held short, which is up week on week once again. Last week the poultry producer released a disappointing full year result. Inghams reported a 68.2% drop in profits for FY 2020.
- Orocobre Limited (ASX: ORE) has seen its short interest remain flat week on week at 8.9%. Short sellers have been going after the lithium miner due to an oversupply of the battery making ingredient and weak demand.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has also seen its short interest remain flat this week at 7.8%. Short sellers appear concerned that lockdowns will weigh heavily on demand for its SCENESSE product. This product is used to prevent skin damage from the sun in people with erythropoietic protoporphyria.
- InvoCare Limited (ASX: IVC) has short interest of 7.7%, which is down slightly week on week. Last week the funerals company released its half year results and revealed a sharp decline in profits. InvoCare's performance was hit by social distancing restrictions.
- Corporate Travel Management Ltd (ASX: CTD) has entered the top ten with short interest of 7.6%. As with Webjet, short sellers appear to believe this travel company's valuation is expensive given its medium term outlook.
- Nearmap Ltd (ASX: NEA) is back in the top ten with short interest of 7.5%. Short sellers may believe the aerial imagery technology and location data company is going to struggle in FY 2021 because of the pandemic.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall slightly to 7.45%. Short sellers continue to close their position after a series of better than feared updates out of the banking sectors.
