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) remains the most shorted ASX share after its short interest rose to 12.1%. Short sellers appear concerned that the travel market may take longer to recover than hoped. Last week Webjet undertook another capital raising, much to the dismay of shareholders.
- Tassal Group Limited (ASX: TGR) has seen its short interest slide to 9.9%. This high level of short interest appears to have been driven by weak salmon prices and trade war fears.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 8.8%. With travel markets taking longer to recover than hoped, short sellers appear to believe its shares are overvalued.
- Inghams Group Ltd (ASX: ING) has 8.25% of its shares held short, which is flat week on week. Last week the poultry company announced the sudden and surprise exit of its CEO.
- Resolute Mining Limited (ASX: RSG) has seen its short interest rise week on week to 7.7%. This gold miner’s shares have fallen heavily this year due to a disappointing full year result, weak guidance, and the termination of its Bibiani mining licence.
- Metcash Limited (ASX: MTS) has seen its short interest rise to 7.3%. Last month this wholesale distributor received a mixed reaction to its new growth strategy. Investors appear concerned by notably higher than expected capex plans.
- InvoCare Limited (ASX: IVC) has 6.5% of its shares held short, which is down slightly week on week. Concerns that the funeral company could be losing market share may be weighing on its shares.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall to 6.3%. Some short sellers may believe its shares are overvalued now after they made strong gains over the last 12 months.
- Temple & Webster Group Ltd (ASX: TPW) is a new entry to the top ten with short interest of 6%. Short sellers may have concerns over the sky high multiples this online furniture retailer’s shares are trading at. Especially given rising bond yields.
- A2 Milk Company Ltd (ASX: A2M) has 5.9% of its shares held short, which is down slightly week on week. This infant formula company’s shares have fallen heavily this year due to its poor performance and bleak outlook. This is being caused by weakness in the daigou channel and a resurgence in Chinese infant formula brands.
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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 Temple & Webster Group Ltd. 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, InvoCare Limited, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.