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) remains the most shorted ASX share after its short interest rose week on week to 17.8%. Short sellers don't appear to believe that the travel market recovery will be as smooth sailing as the company may like.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise again to 12.6%. Short sellers aren't giving up on this betting technology company despite its shares falling 30% in 2022. The prospect of rising rates is weighing heavily on the valuations of tech shares like Betmakers.
- Nanosonics Ltd (ASX: NAN) has short interest of 12.2%, which is flat week on week. A major and sudden change to its sales model in the United States has been weighing heavily on the infection prevention company's shares.
- Webjet Limited (ASX: WEB) has short interest of 10.5%, which is up week on week. It appears as though short sellers believe the market could be too optimistic on the travel market recovery.
- Mesoblast limited (ASX: MSB) has short interest of 9.9%, which is up slightly week on week. Short sellers have been going after this biotech after its lucrative deal with Novartis was cancelled. Combined with poor trial results and high cash burn, Mesoblast's future looks challenged.
- Redbubble Ltd (ASX: RBL) has short interest of 9.2%, which is flat week on week. This ecommerce company's poor form has been weighing on sentiment. In addition, changes to Apple's privacy settings appear to be hurting margins and leading to higher marketing costs.
- Polynovo Ltd (ASX: PNV) has seen its short interest reduce to 9.2%. This medical device company's underperformance and lofty valuation appear to have attracted shorts.
- Kogan.com Ltd (ASX: KGN) has seen its short interest ease materially to 9%. Some short sellers may be locking in their returns following a sharp decline in this ecommerce company's shares over the last 12 months.
- EML Payments Ltd (ASX: EML) is a new entry in the top ten with short interest of 9%. With this payments company's shares trading at ~30x estimated FY 2022 earnings, some short sellers appear to believe they are overvalued.
- Appen Ltd (ASX: APX) is another new entry in the top ten with 8.4% of its shares hold short. There are concerns that demand for this artificial intelligence data services company's offering could fall materially if major customers, such as Facebook, take things in-house.
