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 with short interest of 14.9%. The online travel agent’s shares tumbled lower last week after an outbreak in New South Wales led to border closures. This may delay the recovery of the domestic travel market.
- Western Areas Ltd (ASX: WSA) has seen its short interest reduce to 10.5%. Short sellers appear to be closing positions after the nickel producer’s shares rebounded following a recent crash. That crash was related to its downgraded production guidance.
- Tassal Group Limited (ASX: TGR) has seen its short interest rise to 10.1%. Short sellers have been targeting the salmon producer amid concerns that salmon could be another item that China puts tariffs on.
- Speedcast International Ltd (ASX: SDA) still has short interest of 9.3%. The communications satellite technology provider’s shares have been suspended for almost the entire year as it undertakes a recapitalisation.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest remain flat at 8.9%. Short sellers appear to believe the market is expecting too much from the travel agent giant. Particularly given the recent outbreak in New South Wales.
- AVITA Therapeutics Inc (ASX: AVH) has 8.9% of its shares held short, which is up week on week once again. Short sellers have been targeting the company this year after COVID-19 impacted its sales. This poor form has put significant pressure on its shares and led to them being dumped out of the ASX 200 at the December quarterly rebalance.
- InvoCare Limited (ASX: IVC) has short interest of 8.7%, which is up slightly week on week. Concerns that this funerals company has been losing market share appear to be weighing on investor sentiment.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall to 8.5%. This department store operator’s shares have halved in value in 2020. Investors have been selling its shares after the pandemic impacted its sales materially.
- Inghams Group Ltd (ASX: ING) has 8.2% of its shares held short, which is flat week on week. Short sellers don’t appear to believe the worst is over for the poultry producer after a terrible performance in FY 2020.
- A2 Milk Company Ltd (ASX: A2M) re-enters the top ten with 8.1% of its shares held short. This certainly was great timing by short sellers. The dairy and infant formula company’s shares crashed lower last week after downgrading its guidance for FY 2021.
Finally, I feel it is worth noting that Mesoblast limited (ASX: MSB) shares narrowly missed out on the top ten with short interest of 8%. The biotech company’s shares crashed over 40% lower last week after a series of disappointing updates.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited. The Motley Fool Australia owns shares of and has recommended A2 Milk and Webjet Ltd. The Motley Fool Australia has recommended Avita Medical Limited, Flight Centre Travel Group Limited, and InvoCare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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