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Once a 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) continues to be the most shorted ASX share after its short interest rose to 13.4%. Short sellers have been increasing their positions amid the emergence of the Omicron variant of COVID-19.
- Kogan.com Ltd (ASX: KGN) has seen its short interest remain flat at 12%. This ecommerce company was dealt another blow today when Dow Jones Indices announced that it would be kicked out of the ASX 200 index.
- Redbubble Ltd (ASX: RBL) has short interest of 11.2%, which is up again week on week. As with Kogan, Redbubble has just been kicked out of the ASX 200 index at the next quarterly rebalance. This follows a period of underperformance by both its operations and its shares.
- Webjet Limited (ASX: WEB) has short interest of 9.2%, which is up week on week. The emergence of the Omicron variant of COVID-19 has investors concerned that the travel market recovery could be derailed.
- Cooper Energy Ltd (ASX: COE) has 9.1% of its shares held short, which is up week on week again. The company's troubled Orbost gas processing plant continues to weigh on sentiment.
- Mesoblast limited (ASX: MSB) has short interest of 9%, which is up week on week. Concerns over this biotech company's precarious financial position appear to be behind this high level of short interest.
- Zip Co Ltd (ASX: Z1P) has seen its short interest fall to 9%. Short sellers have been targeting Zip this year amid intense competition in the BNPL market and rising costs.
- Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.2% of its shares held short, which is down notably week on week. Short sellers have been going after this defence and space company due partly to concerns over its cash flows.
- Omni Bridgeway Ltd (ASX: OBL) has entered the top ten with short interest of 7.8%. It is unclear why short sellers are targeting the class action funder. Particularly given how last week Goldman Sachs reiterated its conviction buy rating and lifted its price target to $5.35.
- BHP Group Ltd (ASX: BHP) is back in the top ten with short interest of 7.5%. Short sellers may believe that weaker iron ore prices will lead to the mining giant falling short of expectations.
