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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) continues to be the most shorted share on the ASX after its short interest rose to 15%. It appears as though short sellers believe Webjet's shares are overvalued relative to its earnings potential in the medium term.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest reduce slightly once again to 11%. Some short sellers appear to be closing positions after a recent rebound in the department store operator's shares. Though, others are sticking around, potentially on the belief that the pandemic will ruin its turnaround plans.
- Speedcast International Ltd (ASX: SDA) has seen its short interest slide to 10.6%. This communications satellite technology provider recently announced a US$395 million equity commitment to complete its chapter 11 recapitalisation.
- Orocobre Limited (ASX: ORE) has seen its short interest rise week on week to 9.3%. Short sellers have been going after Orocobre due to a collapse in lithium prices. This led to it posting a US$67.1 million loss after tax in FY 2020.
- InvoCare Limited (ASX: IVC) has short interest of 9.1%, which is up week on week once again. Short sellers have been increasing their positions since the release of the funerals company's half year results. InvoCare revealed a sharp decline in profits due partly to COVID-related social distancing restrictions.
- Inghams Group Ltd (ASX: ING) has 8% of its shares held short, which is down sharply week on week. It appears as though short sellers may believe the worst is over for Inghams now following its full year result. This certainly seems to be the case with its directors, who were buying shares en masse recently.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest increase slightly to 7.9%. Last month the biopharmaceutical company's shares tumbled lower following a disappointing full year result. Short sellers may believe lockdowns are stifling demand for its SCENESSE product.
- FlexiGroup Limited (ASX: FXL) has entered the top ten with 7.7% of its shares held short. Although the company's buy now pay later offering is performing well, there are concerns over the rest of the business.
- Corporate Travel Management Ltd (ASX: CTD) has short interest of 7.2%, which is down week on week. Short sellers appear to be closing positions amid a strong rebound in the travel company's shares.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.1%. This regional bank has come under significant pressure this year after delivering a soft half year result and warning that trading conditions were expected to remain tough.
