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 jumped to 17%. Short sellers appear to believe the travel market recovery won't be smooth sailing, particularly given the rising costs of living which could impact consumer spending.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest edge higher to 13.9%. This betting technology company's shares may have been targeted due to the lofty multiples they trade on and the company's ongoing cash burn.
- Nanosonics Ltd (ASX: NAN) has short interest of 12.2%, which is down slightly week on week. Short sellers have been going after this medical device company amid concerns over changes to its sales model in the United States. There are fears that it could be disruptive to sales and lead to higher costs.
- Polynovo Ltd (ASX: PNV) has seen its short interest jump to 11.4%. Not even high levels of insider buying has stopped short sellers from loading up. In addition, this medical device company's shares will be dumped from the ASX 200 index at the next rebalance.
- Appen Ltd (ASX: APX) has seen its short interest rebound to 9.6%. This artificial intelligence data services company's soft start to FY 2022 and concerns over disruption in the industry have been weighing on its shares. Appen will also be booted out of the ASX 200 index later this month.
- EML Payments Ltd (ASX: EML) has returned to the top ten with short interest of 8.9%. This payments company's poor performance during the second half has been weighing on its shares. As has weakness in the tech sector and the derating of growth shares.
- Block Inc (ASX: SQ2) has short interest of 8.9%, which is up slightly week on week. This is largely in line with the short interest levels of its US listed shares. Short sellers will be pleased to see Block's shares crash on Tuesday amid the market selloff.
- Webjet Limited (ASX: WEB) has short interest of 8.5%, which is down week on week. As with Flight Centre, there are concerns that the travel market's recovery from the pandemic could be impacted by rising living costs.
- Regis Resources Limited (ASX: RRL) has short interest of 8.5%, which is down slightly week on week. This gold miner has been targeted amid concerns over labour shortages, cost pressures, and lower grades.
- Inghams Group Ltd (ASX: ING) has returned to the top ten with 8.4% of its shares held short. This may have been driven by high input costs and concerns that this could impact margins.
