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) is still the most shorted share on the ASX despite its short interest easing slightly to 14.5%. Short sellers don’t appear to believe the worst is over for the online travel agent due to the disruption being caused by COVID-19.
- Tassal Group Limited (ASX: TGR) has seen its short interest rise to 11.9%. There are concerns that the salmon producer could become a victim of the trade war between China and Australia.
- 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. This has sparked fears that a capital raising may be required to keep its operations running.
- Speedcast International Ltd (ASX: SDA) still has short interest of 9.3%. The communications satellite technology provider’s shares have been suspended for around a year as it undertakes a recapitalisation.
- Inghams Group Ltd (ASX: ING) has 8.5% of its shares held short, which is up week on week. The poultry producer struggled in FY 2020 because of rising input costs and an unfavourable sales mix caused by COVID-19. It appears as though some don’t believe FY 2021 will be better.
- InvoCare Limited (ASX: IVC) has short interest of 8.2%, which is up slightly week on week. This funerals company is believed to be losing market share to rivals. If this is due to prices, then there are fears a price war could ensue.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest ease to 8%. This department store operator was a very poor performer in FY 2020 because of the pandemic. There are fears that FY 2021 could be weak as consumer habits change.
- A2 Milk Company Ltd (ASX: A2M) has seen its short interest rise to 8%. Short sellers don’t appear to believe the weakness in the daigou channel will be a quick fix. A2 Milk downgraded its guidance recently to reflect a sharp drop in daigou sales.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise fall to 7.8%. Concerns that the travel market could take longer to recover than hoped appears to be weighing on Flight Centre’s shares.
- Metcash Limited (ASX: MTS) has short interest of 7.7%, which is down slightly week on week. Short sellers have been targeting this wholesale distributor despite its very strong performance over the last few months.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.
- Is the Qantas (ASX:QAN) share price great value? – February 26, 2021 3:47pm
- Why the Resolute Mining (ASX:RSG) share price is pushing higher today – February 26, 2021 3:16pm
- Why the Damstra (ASX:DTC) share price is crashing 11% lower today – February 26, 2021 2:53pm