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 despite its short interest sliding to 14.6%. Short sellers won’t have enjoyed last week. The online travel agent’s shares rocketed higher following news of a promising COVID-19 vaccine.
- InvoCare Limited (ASX: IVC) has short interest of 9.5%, which is down slightly week on week once again. There are concerns that this funerals company is losing market share to competitors.
- Speedcast International Ltd (ASX: SDA) still has short interest of 9.4%. This communications satellite technology provider’s shares remain suspended whilst it undertakes a recapitalisation.
- Western Areas Ltd (ASX: WSA) has seen its short interest rise again to 9.2%. Short sellers have been going after the nickel producer due to production issues at its Flying Fox operation.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall to 9.2%. In FY 2020, this department store operator posted a statutory loss of $172.4 million. Short sellers don’t appear to be expecting a big improvement in FY 2021.
- Mesoblast Limited (ASX: MSB) has seen its short interest rise again to 9.1%. The biotech company’s shares have come under pressure after the US FDA decided against approving its remestemcel-L product last month.
- Inghams Group Ltd (ASX: ING) has 8.7% of its shares held short, which is down slightly week on week. Short sellers have been closing positions after the poultry company revealed an improvement in its performance in FY 2021.
- A2 Milk Company Ltd (ASX: A2M) has re-entered the top ten with short interest of 7.6%. Weakness in the daigou channel is weighing heavily on the infant formula company’s performance this year.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 7.5%. Galaxy and other lithium miners have fallen heavily this year because of a collapse in lithium prices due to oversupply and lower demand.
- Metcash Limited (ASX: MTS) is back in the top ten with 7.5% of its shares held short. Given the favourable trading conditions its businesses are experiencing, it remains unclear why short sellers are going after Metcash.
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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 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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