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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) has seen its short interest rise to 11.3%, making it the most shorted ASX share. Concerns over extended lockdowns and border restrictions have been weighing heavily on this online travel agent's shares.
- Kogan.com Ltd (ASX: KGN) has short interest of 10.9%, which is down slightly week on week. Short sellers don't appear to believe recent lockdowns will boost sales enough to help Kogan recover meaningfully quicker from its inventory issues.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rebound to 9.6%. As with Webjet, the recent lockdowns in Australia are delaying the travel market recovery and pushing back Flight Centre reaching profitability.
- Inghams Group Ltd (ASX: ING) has 8.8% of its shares held short, which is flat week on week once again. The poultry company has a major contract renewal with a supermarket giant due in August.
- Zip Co Ltd (ASX: Z1P) has short interest of 8.45%, which is up week on week. Apple's potential entry into the BNPL market and PayPal's removal of late fees has investors worried.
- Tassal Group Limited (ASX: TGR) has short interest of 8.2%, which is up week on week. Short sellers are not giving up on this one despite salmon prices being tipped to improve.
- Electro Optic Systems Hldg Ltd (ASX: EOS) has 8% of its shares held short, which is down slightly week on week. Supply chain and cash flow concerns appear to be weighing on investor sentiment.
- Temple & Webster Group Ltd (ASX: TPW) has seen its short interest ease to 7.5%. Short sellers have been going after this ecommerce company since it announced plans to sacrifice margins to grow market share.
- A2 Milk Company Ltd (ASX: A2M) has seen its short interest rise to 7.3%. Short sellers have been increasing their positions in recent weeks. This appears to be due to the belief that the worst is not yet over for the embattled infant formula company.
- Metcash Limited (ASX: MTS) is back in the top ten with 6.4% of its shares held short. Although the wholesale distributor has been in fine form recently, short sellers don't appear to believe this will continue. This could be due to the belief the consumer behaviour will revert back to less favourable trends in the near future.
