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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) continues to be the most shorted ASX share after its short interest rose to 11.4%. Short sellers have been going after the online travel agent due to fears over the spread of the Delta strain of COVID-19 and the impact this will have on travel markets.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to strongly to 11.4%. This travel agent's shares are being targeted by concerns over longer than expected delays in the travel market recovery.
- Zip Co Ltd (ASX: Z1P) has seen its short interest fall again week on week to 9.3%. Short sellers continue to close positions amid recent M&A activity in the BNPL industry. There is speculation Zip could be a potential takeover target of larger rival Klarna.
- Kogan.com Ltd (ASX: KGN) has short interest of 8.6%, which is down week on week. Short sellers may have been closing positions amid optimism that lockdowns will boost this ecommerce company's sales.
- Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is down week on week. Short sellers were targeting the company due to fears over its supply contract with Woolworths Group Ltd (ASX: WOW). It accounts for around 50% of its Australian poultry volumes and was due to expire this month. Unfortunately for short sellers, the two parties have agreed in principle to a renewal on broadly similar terms.
- Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.3% of its shares held short, which is down week on week. Concerns over accounting methods, cash flow generation, and supply chain fears are weighing on sentiment.
- Tassal Group Limited (ASX: TGR) has short interest of 7.3%, which is down notably week on week. Recent M&A activity in the industry appears to have led to short sellers closing positions.
- PolyNovo Ltd (ASX: PNV) has seen its short interest edge lower to 6.9%. This medical device company's share are trading close to a 52-week low. This has been driven by its disappointing finish to FY 2021.
- Temple & Webster Group Ltd (ASX: TPW) is back in the top ten with short interest of 6.7%. Short sellers aren't giving up on this furniture and homewares retailer despite the expectation that lockdowns will boost its sales.
- Resolute Mining Limited (ASX: RSG) has also returned to the top ten with short interest of 6.5%. This gold miner has underwhelmed in FY 2021 due to production and regulatory issues. Also, last week it announced that it expects to recognise a non-cash impairment charge in the range of US$165 million to US$175 million during the first half of the financial year.
