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) remains the most shorted ASX share by some distance after its short interest rose to 17.7%. It appears as though short sellers believe Webjet shares are vastly overvalued at the current level given the weak outlook for travel markets.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.15%. This communications satellite technology provider's shares have been suspended almost all year whilst it undertakes its chapter 11 recapitalisation. When it eventually returns to trade, short sellers will no doubt be cashing in greatly.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise to 11%. The department store operator's short interest has risen consistently since the release of its full year results. Myer posted a 41.6% decline in EBITDA to $305.3 million. Short sellers don't appear confident FY 2021 will be any better.
- InvoCare Limited (ASX: IVC) has short interest of 9.9%, which is up week on week once again. This funerals company has come under attack from short sellers since the release of its weak half year result. It appears as though they expect the difficult trading conditions to persist.
- Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is up slightly week on week. This poultry company has been battling with higher input costs and an unfavourable shift in its sales mix.
- FlexiGroup Limited (ASX: FXL) has 8% of its shares held short, which is down slightly week on week. The financial services company posted a 62% decline in cash profit during FY 2020. Judging by its high level of short interest, short sellers may be expecting another poor result in FY 2021.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall to 7.8%. The biopharmaceutical company recently announced plans to extend the use of its SCENESSE product to treat xeroderma pigmentosum. This may have led to some short sellers closing positions.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest rise again to 7.7%. Short sellers have been going after this regional bank after it warned that difficult trading conditions were likely to persist over the near term. Though, I suspect that recent changes to responsible lending rules may cause a rethink from some short sellers.
- Corporate Travel Management Ltd (ASX: CTD) has entered the top ten with short interest of 7.4%. Rising coronavirus cases globally appear to be the catalyst for this.
- Flight Centre Travel Group Ltd (ASX: FLT) is another new entry to the top ten with 7.1% of its shares held short. As with Corporate Travel Management, this appears to be related to the bleak outlook for travel markets due to rising coronavirus cases.
