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 jumped week on week to 15.3%. It appears as though short sellers believe the travel market may take longer to recover than hoped.
- Tassal Group Limited (ASX: TGR) has seen its short interest remain flat at 9.9%. Weak salmon prices and Australia-China trade war fears are weighing on sentiment.
- Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 8.8%, which is flat week on week. Short sellers appear to believe the travel agent’s shares are overvalued at the current level.
- Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is up week on week. Concerns over an unfavourable shift in its sales mix and the sudden exit of its CEO could be weighing on sentiment.
- Resolute Mining Limited (ASX: RSG) has seen its short interest rise week on week again to 8.2%. A disappointing full year result, weak guidance, and the termination of its Bibiani mining licence are weighing on this gold miner’s shares.
- Metcash Limited (ASX: MTS) has seen its short interest remain flat at 7.3%. Valuation concerns, supermarket price war fears, and high capital expenditure plans could be behind this high level of short interest.
- InvoCare Limited (ASX: IVC) has 6.3% of its shares held short, which is down slightly week on week. There are concerns that InvoCare could be losing market share to its funeral industry rivals.
- Megaport Ltd (ASX: MP1) has entered the top ten with short interest of 6.2%. This may be due to valuation concerns, especially given rising bond yields.
- Temple & Webster Group Ltd (ASX: TPW) has seen its short interest rise to 6.1%. As with Megaport, this appears to be due to fears over the sky high multiples that its shares trade on.
- Alkane Resources Limited (ASX: ALK) is back in the top ten with short interest of 5.8%. Investors may be disappointed with the slow progress the company is making with its rare earths project. Investors were very excited about it last year, driving its shares notably higher.
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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 and recommends MEGAPORT FPO. 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 Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited, InvoCare Limited, MEGAPORT FPO, 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.