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 the most shorted ASX share despite experiencing a small reduction in short interest to 10.4%. Concerns over a third wave of COVID-19 in Europe and the floods in NSW and Queensland could be weighing on its shares.
- Tassal Group Limited (ASX: TGR) has seen its short interest slide to 10.3%. Weak salmon prices and concerns over the Australia-China trade war have hit investor sentiment.
- Inghams Group Ltd (ASX: ING) has 8.25% of its shares held short, which is up week on week. This morning the poultry company announced the surprise exit of its CEO with immediate effect.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 8.2%. As with Webjet, this appears to have been driven by rising COVID-19 cases across the world despite the rollout of vaccines.
- Metcash Limited (ASX: MTS) has seen its short interest rise to 7.2%. It appears as though some investors aren’t convinced by the wholesale distributor’s recently announced growth strategy. This may be due to its notably higher than expected capex plans.
- Resolute Mining Limited (ASX: RSG) has seen its short interest reduce week on week to 6.9%. Short sellers will have been celebrating last week after the gold miner’s shares crashed lower. This was due to news that the Ghanaian government has terminated its Bibiani mining license.
- JB Hi-Fi Limited (ASX: JBH) has entered the top ten with short interest of 6.8%. Short sellers may believe JB Hi-Fi’s shares have peaked after a very strong gain over the last 12 months.
- InvoCare Limited (ASX: IVC) has 6.6% of its shares held short, which is down slightly week on week. Allegations of anti-competitive conduct in the funeral sector and speculation the company is losing market share could be behind this high level of short interest.
- A2 Milk Company Ltd (ASX: A2M) has entered the top ten with short interest of 6.1%. There are concerns that weakness in the daigou channel and a resurgence in Chinese infant formula brands could weigh heavily on a2 Milk’s performance for some time to come.
- Alkane Resources Limited (ASX: ALK) has joined the top ten with 5.9%. This gold miner’s shares are down 28% since the start of the year. However, short sellers appear to believe they can still go lower. Though, it remains unclear why they are targeting the company.
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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.
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