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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:
- Flight Centre Travel Group Ltd (ASX: FLT) is the most shorted ASX shares after its short interest rose week on week to 10.8%. Short sellers are building up their positions despite the travel agent expecting to reach profitability again during FY 2022. They may believe its shares are still overvalued.
- Webjet Limited (ASX: WEB) has short interest of 9.6%, which is down week on week. A recent trading update may have spooked short sellers. That update revealed a significant improvement in the performance of its key WebBeds business.
- Kogan.com Ltd (ASX: KGN) has short interest of 9.2%, which is up week on week. Short sellers don't appear to believe the ecommerce company's inventory issues are going away as quickly as the market might hope. The Kogan website continues to offer significant discounts, which could be a sign that this is the case.
- Zip Co Ltd (ASX: Z1P) has seen its short interest remain flat at 9.2%. This high level of short interest may be due to concerns that Zip will have to spend significantly to compete in the BNPL market.
- Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.7% of its shares held short, which is down week on week. This defence and space company's shares have been targeted due to accounting and cash generation concerns.
- Mesoblast limited (ASX: MSB) has seen its short interest rise again to 8.5%. There are concerns that this biotech company may have to launch yet another capital raising to fund its operations.
- Piedmont Lithium Inc (ASX: PLL) has short interest of 8.2%, which is down week on week. Concerns that the company has yet to get a mining license may be behind this high level of short interest.
- Inghams Group Ltd (ASX: ING) has 8% of its shares held short, which is flat week on week once again. Lockdowns and rising grain costs appear to be weighing on investor sentiment.
- Redbubble Ltd (ASX: RBL) has seen its short interest stay at 7.7%. A severe deceleration in its growth during the fourth quarter of FY 2021 could be the reason for this short interest.
- Cooper Energy Ltd (ASX: COE) has 7.6% of its shares held short, which is down slightly week on week. The poor performance of its Project Sole appears to be weighing on sentiment.
