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 rise to 12.9%. A sharp decline in salmon prices over the last 12 months and concerns over the Australia-China trade war have been weighing on sentiment.
- Webjet Limited (ASX: WEB) has seen its short interest reduce to 10.8%. Short sellers may have been closing positions following the government’s announcement of a stimulus package for the tourism industry. In addition, last week Webjet spoke very positively about its longer term outlook at an event.
- Inghams Group Ltd (ASX: ING) has 8% of its shares held short, which is unchanged week on week. Short sellers have been going after the poultry company due to concerns over costs, an unfavourable sales mix, and a potential oversupply of chicken.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise slightly to 7.7%. While the travel agent was recently given a boost by a $1.2 billion government stimulus package for the tourism sector, short sellers aren’t giving up on it. They appear to believe it is overvalued after a strong share price recovery.
- Bravura Solutions Ltd (ASX: BVS) has experienced another increase in its short interest to 7.7%. Short sellers appear to be targeting the financial technology company due to the significant Brexit and COVID headwinds impacting its business.
- Resolute Mining Limited (ASX: RSG) has seen its short interest reduce week on week to 7.5%. Industrial disruption at its Syama operation has been weighing heavily on sentiment. Particularly given its guidance for another decline in production in FY 2021.
- Metcash Limited (ASX: MTS) has seen its short interest fall to 6.9%. Last week this wholesale distributor released its growth strategy to the market and received a somewhat mixed response due to its higher capex plans.
- Myer Holdings Ltd (ASX: MYR) has short interest of 6.7%, which is down week on week. Short sellers continue to target the department store operator due to the belief that it is in a structural decline.
- Freedom Foods Group Ltd (ASX: FNP) is back in the top ten with 6.7% of its shares held short. Short sellers will have been celebrating this morning after the Freedom Foods share price crashed 94% lower after returning from its nine-month suspension.
- InvoCare Limited (ASX: IVC) has 6.7% of its shares held short. Concerns over market share losses and allegations of anti-competitive conduct in the funeral sector appear to be weighing on sentiment.
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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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd, Flight Centre Travel Group Limited, Freedom Foods 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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