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:
- Zip Co Ltd (ASX: Z1P) remains the most shorted share on the ASX with short interest of 11.7%. This was a sizeable increase week on week. Short sellers have been increasing their positions since rumours emerged claiming that Apple is planning to enter the BNPL market. Though, BNPL M&A activity today could give short sellers something to think about.
- Webjet Limited (ASX: WEB) has seen its short interest rise to 11.5%. This online travel agent's shares continue to attract short sellers following the announcement of lockdowns across Australia. The latest being in the popular tourist destination of Queensland.
- Kogan.com Ltd (ASX: KGN) has short interest of 10.25%, which is up significantly week on week. Short sellers aren't giving up on this one despite lockdowns potentially boosting sales and helping the company work through its excess inventory.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease slightly to 10%. Concerns over the travel market recovery continue to weigh on this travel agent's shares.
- Inghams Group Ltd (ASX: ING) has 8.4% of its shares held short, which is up slightly week on week. The market is eagerly anticipating details over a major contract renewal with a supermarket giant. The latest contract is due to end in a few weeks.
- Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.3% of its shares held short, which is up materially week on week. Short sellers appear to be targeting this communications, defence, and space company's shares due to cash flow concerns.
- Tassal Group Limited (ASX: TGR) has short interest of 8.1%, which is up week on week. Weak salmon prices have been weighing on investor sentiment. Though, Goldman Sachs expects them to improve in FY 2022.
- A2 Milk Company Ltd (ASX: A2M) has seen its short interest rise to 7%. This infant formula company's shares have been hammered this year following countless guidance downgrades and concerns over potential regulatory changes in China.
- PolyNovo Ltd (ASX: PNV) is back in the top ten with short interest of 6.7%. A weak finish to FY 2021 has been weighing heavily on this medical device company's shares.
- InvoCare Limited (ASX: IVC) has also returned to the top ten with short interest of 6.5%. There are concerns that this funerals company is losing market share despite its significant investment in its Protect and Grow strategy and acquisitions.
