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:
- Tassal Group Limited (ASX: TGR) has seen its short interest ease to 12.7%. Short sellers have been going after the Australian seafood company due to weak prices and concerns that it could be impacted by the Australia-China trade war.
- Webjet Limited (ASX: WEB) has seen its short interest reduce slightly to 11.9%. Short sellers don’t appear to believe that this online travel agent’s shares are appropriately priced given the tough trading conditions it is facing.
- Resolute Mining Limited (ASX: RSG) has seen its short interest slide week on week to 8.1%. A weakening gold price and industrial disruption at its Syama operation are weighing heavily on this gold miner’s shares. Unfortunately, another weak year is expected in FY 2021 by management.
- Inghams Group Ltd (ASX: ING) has 8% of its shares held short, which is down week on week. Short sellers may be closing positions after the poultry company returned to form in the first half of FY 2021. For the six months ended 31 December, Inghams reported a 28.4% increase in underlying profit.
- Speedcast International Ltd (ASX: SDA) has short interest of 7.9%. Last week this communications satellite technology provider announced the completion of its recapitalisation. Much to the delight of short sellers, this will essentially see its share price drop to zero and its shares delisted.
- Flight Centre Travel Group Ltd (ASX: FLT) is back in the top ten with short interest of 7.5%. Last week this travel agent was given a boost by a $1.2 billion government stimulus package for the tourism sector. However, this doesn’t appear to be putting off short sellers.
- Metcash Limited (ASX: MTS) has seen its short interest rise to 7.4%. Short sellers are continuing to build up positions despite the wholesale distributor’s shares hitting a 52-week high. This week Metcash will hold its strategy day event.
- Western Areas Ltd (ASX: WSA) has short interest of 7.3%, which is down slightly week on week. Last week the nickel producer launched a capital raising to fund the development of its Odysseus operation. This led to its shares falling around 10% over the period.
- Myer Holdings Ltd (ASX: MYR) has re-entered the top ten with short interest of 7.3%. There appear to be concerns that the structural shift in the retail sector is leaving this department store operator behind.
- Bravura Solutions Ltd (ASX: BVS) is a new entry in the top ten with 7.2% of its shares held short. The financial technology company’s shares have come under pressure over the last 12 months due to the significant Brexit and COVID headwinds impacting its business. Short sellers don’t appear to believe the worst is over.
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
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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.