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) continues to be the most shorted ASX share despite its short interest pulling back to 11.4%. Concerns over the recovery of the travel market and its lofty valuation appear to be weighing on investor sentiment.
- Tassal Group Limited (ASX: TGR) has seen its short interest ease slightly to 9.8%. Investors have been shorting the seafood company due to weak salmon prices and concerns over the Australia-China trade war.
- Resolute Mining Limited (ASX: RSG) has seen its short interest rise week on week again to 9.1%. This gold miner has come under pressure from a series of disappointing developments such as its weak full year result and even weaker guidance. Positively, the termination of its Bibiani mining licence in Ghana was reversed last week.
- Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 9.1%, which is up slightly week on week. As with Webjet, valuation and travel market recovery concerns are weighing on sentiment.
- Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is flat week on week. An unfavourable shift in its sales mix and the surprise exit of its CEO appear be weighing on investor sentiment.
- Metcash Limited (ASX: MTS) has seen its short interest remain flat at 7.4%. Valuation, price war, and high capital expenditure plans seem to be behind this short interest.
- Megaport Ltd (ASX: MP1) has short interest of 6.3%, which is up slightly since last week. Given its lofty valuation and rising bond yields, short sellers appear to believe its shares are overvalued.
- InvoCare Limited (ASX: IVC) has 6.2% of its shares held short, which is down slightly week on week. This high level of short interest appears to have been driven by concerns that the funeral company could be losing market share to its rivals.
- Temple & Webster Group Ltd (ASX: TPW) has seen its short interest remain flat at 6.1%. This appears to be another case of short sellers targeting a company that trades on sky high multiples while bond yields rise.
- JB Hi-Fi Limited (ASX: JBH) is back in the top ten with 5.9% of its shares held short. Short sellers may believe its shares are overvalued given how its earnings are likely to have peaked in FY 2021.
