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 Australian share market with short interest of 14.7%. Last week the online travel agent released a trading update which revealed that bookings are still down materially because of the pandemic.
- Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. This communications satellite technology provider's shares have been suspended since February. This was done in order to undertake a recapitalisation. It has now filed its restructuring plan and expects to emerge in the first quarter of 2021.
- InvoCare Limited (ASX: IVC) has short interest of 10%, which is up slightly week on week. Social distancing restrictions have been weighing on the funerals company's performance this year.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall again to 9.4%. Short sellers have been going after Myer this year due to the belief that its department stores will be left behind by the shift to online shopping.
- Mesoblast Limited (ASX: MSB) has seen its short interest rise again to 9.1%. Short interest has been building after the US FDA didn't approve its remestemcel-L application for steroid-refractory acute graft versus host disease (SR-aGVHD). The company has also been hit with a class action this month.
- Inghams Group Ltd (ASX: ING) has 8.6% of its shares held short, which is down slightly week on week. This poultry company reported a 68.2% drop in net profit to $40.1 million for FY 2020. Unfavourable changes in its sales mix and higher input costs weighed on its performance.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest fall to 8.5%. Concerns that an oversupply of lithium may keep prices of the battery making ingredient lower for longer could be behind this high level of short interest.
- Flight Centre Travel Group Ltd (ASX: FLT) has recorded a small rise in short interest to 8%. Rising COVID-19 cases globally are expected to delay the recovery of the global travel markets.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise slightly to 7.6%. The biopharmaceutical company's shares trade on sky high multiples. It appears as though short sellers don't believe its growth justifies the premium.
- Metcash Limited (ASX: MTS) has entered the top ten with short interest of 7.4%. Given the positive trading conditions it is experiencing in the Food and Hardware markets, this high level of short interest is a bit of a mystery. Furthermore, analysts at Macquarie upgraded its shares to an outperform rating last week.
