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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 share on the Australian share market after its short interest edged higher to 15%. Short sellers appear to believe the market is too optimistic with the travel market recovery.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest remain flat at 12.2%. Valuation concerns and fierce competition in betting industry may be behind this high level of short interest.
- Block Inc (ASX: SQ2) has short interest of 11.2%, which is down slightly week on week once again. This payments company's exposure to cryptocurrencies has been dragging on its performance this year due to lower trading volumes.
- Nanosonics Ltd (ASX: NAN) has short interest of 10.8%, which is flat week on week. Short sellers don't appear confident that this infection prevention company's sales model transition in the US will go smoothly.
- Lake Resources N.L. (ASX: LKE) has short interest of 10.2%, which is down week on week. Short sellers may have been closing positions after a stellar share price run recently. Though, the company still has a lot of work to do to prove the validity of its DLE technology.
- Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 9.2%. Short sellers don't appear to believe the worst is over for this buy now pay later provider's shares despite them sinking materially over the last 12 months. Concerns that it may struggle to become profitable continue to weigh on sentiment.
- Regis Resources Limited (ASX: RRL) has short interest of 8.8%, which is down week on week again. Short sellers appear to have been targeting this gold miner due to its production issues.
- Megaport Ltd (ASX: MP1) has seen its short interest rise slightly to 8%. Short sellers may believe that this network as a service provider's shares are overvalued at the current level. Citi estimates that its shares trade at 78x FY25 earnings.
- Inghams Group Ltd (ASX: ING) has short interest of 7.9%, which is down slightly week on week. Last week this poultry company's shares were sold off after the release of a disappointing result driven by higher input costs.
- EML Payments Ltd (ASX: EML) has returned to the top ten with short interest of 7.5%. Regulatory difficulties in Europe have weighed heavily on this payments company's shares this year. EML is due to release its results today, so there could be fireworks if it outperforms expectations.
