At the start of each week 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 ASX despite its short interest easing slightly to 14.9%. There are concerns that a recent outbreak of COVID-19 in New South Wales and Victoria and escalating cases across the world could delay the recovery of the travel market.
- Tassal Group Limited (ASX: TGR) has seen its short interest fall to 10.8%. Short sellers have been going after the salmon producer amid concerns that China could put tariffs on Australian salmon exports in the future.
- Mesoblast limited (ASX: MSB) has seen its short interest ease to 9.3%. This biotech company’s shares have come under pressure recently after the release of a series of very disappointing updates.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 8.2%. As with Webjet, the recent COVID outbreak in New South Wales and Victoria appears to be weighing on sentiment in the travel sector.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall to 8.2%. This department store operator has been hit hard this year after the pandemic accelerated the shift to online shopping. This could have a big impact on the company’s turnaround plans.
- Inghams Group Ltd (ASX: ING) has 8.1% of its shares held short, which is down week on week. The poultry producer was a very disappointing performer in FY 2020 and it appears as though short sellers don’t believe the worst is over.
- InvoCare Limited (ASX: IVC) has short interest of 8.1%, which is also down week on week. There are concerns that this funeral company is losing market share to rivals. This could weigh on its performance in FY 2021.
- Zip Co Ltd (ASX: Z1P) has seen its short interest increase to 7.8%. Short sellers may be going after Zip due to rising competition in the United States from the likes of Shopify and PayPal.
- Metcash Limited (ASX: MTS) is back in the top ten with short interest of 7.8%. Short sellers aren’t giving up on this one despite its very strong performance over the last few months. They may now believe its shares are overvalued.
- A2 Milk Company Ltd (ASX: A2M) has also returned to the top ten with short interest of 7.6%. This infant formula company’s shares have recovered strongly since crashing lower following a guidance downgrade. It appears as though short sellers aren’t convinced that its operational recovery will be as quick.
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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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk and Webjet Ltd. The Motley Fool Australia has recommended 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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