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 Australian share market by some distance. The online travel agent has 16.4% of its shares held short, which is down week on week. Its lofty valuation appears to be attracting short sellers.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest remain flat at 11%. The department store operator has come under pressure since posting a 41.6% decline in EBITDA to $305.3 million in FY 2020. Judging by the high level of short interest, short sellers don’t appear confident FY 2021 will be any better.
- Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. This communications satellite technology provider’s shares remain suspended whilst it undertakes a recapitalisation.
- InvoCare Limited (ASX: IVC) has short interest of 9.9%, which is flat week on week. This funerals company has been struggling in FY 2020 with social distancing initiatives. This led to InvoCare posting a very sharp decline in profits in the first half.
- Inghams Group Ltd (ASX: ING) has 8.5% of its shares held short, which is up slightly week on week once again. Short sellers may be expecting another tough year for the poultry producer due to higher input costs and an unfavourable shift in its sales mix.
- Galaxy Resources Limited (ASX: GXY) has entered the top 10 with short interest of 8.3%. Australia’s lithium miners have come under pressure since Tesla’s Battery Day event. The electric vehicle company revealed plans to mine its own battery materials.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall slightly once again to 7.7%. Short sellers have been closing positions since the biopharmaceutical company announced plans to extend the use of its SCENESSE product to treat xeroderma pigmentosum.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.45%. Last week the regional bank announced greater than expected provisions relating to COVID-19. It also revealed that it has been underpaying staff by mistake.
- A2 Milk Company Ltd (ASX: A2M) has entered the top 10 with short interest of 7.3%. Short sellers will have been celebrating last week after the infant formula company’s shares crashed lower. This followed the release of guidance for FY 2021 which was materially lower than expected due to weakness in the daigou channel.
- Freedom Foods Group Ltd (ASX: FNP) is back in the top 10 with short interest of 6.95%. This diversified food company’s shares have been suspended for some time due to accounting irregularities. Freedom Foods’ shares are scheduled to return to trade at the end of the month.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended A2 Milk and Webjet Ltd. The Motley Fool Australia has recommended Freedom Foods Group 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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