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 share on the ASX by some distance despite a reduction in its short interest to 15.2%. The online travel agent’s shares have fallen heavily this year because of the pandemic. Short sellers don’t appear to believe the declines are over.
- Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. This embattled communications satellite technology provider’s shares have been suspended for most of 2020 whilst it undertakes a recapitalisation.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall to 10.35%. Last month the department store operator released its full year results and revealed a 41.6% decline in EBITDA to $305.3 million for FY 2020. It appears as though short sellers expect a similarly weak result in FY 2021.
- InvoCare Limited (ASX: IVC) has short interest of 10.1%, which is up slightly week on week. Short sellers may believe that social distancing initiatives will weigh on this funerals company’s performance in 2020 and 2021.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest rise to 9.2%. Concerns over Tesla’s plans to mine its own battery materials has been weighing on Australian lithium miners in recent weeks.
- Mesoblast Limited (ASX: MSB) has entered the top 10 with short interest of 8.6%. The biotech company’s short interest has surged after the US FDA didn’t approve its remestemcel-L application for steroid-refractory acute graft versus host disease (SR-aGVHD). Instead, the company must undertake further trials to prove its efficacy.
- Inghams Group Ltd (ASX: ING) has 8.6% of its shares held short, which is up slightly week on week once again. This poultry producer has been struggling in 2020 due to higher input costs and an unfavourable shift in its sales mix.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest rise to 8.1%. This regional bank will be releasing its full year results later this week. Judging by its high level of short interest, short sellers are not expecting a strong result.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall once again to 7.5%. Short sellers have been exiting their positions since the biopharmaceutical company announced plans to extend the use of its SCENESSE product. It is looking to treat xeroderma pigmentosum with it as well.
- Freedom Foods Group Ltd (ASX: FNP) continues to have short interest of 6.95%. This diversified food company’s shares are scheduled to return to trade at the end of the month following a lengthy suspension.
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Returns as of 6th October 2020
Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended 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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