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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 still the most shorted share on the ASX despite its short interest easing to 14.6%. Concerns over the travel market recovery have been weighing on this travel agent's shares.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 14.4%. Short sellers may be targeting this betting technology company due to intense competition in the industry and the lofty multiples its shares trade on.
- Block Inc (ASX: SQ2) has seen its short interest rise to 11.1%. Concerns over the prospect of a global recession and regulatory pressure in the BNPL industry could be putting pressure on its shares.
- Lake Resources N.L. (ASX: LKE) has short interest of 10.1%, which is down week on week. Doubts over this lithium developer's DLE technology appears to be a key reason for the high level of short interest.
- Megaport Ltd (ASX: MP1) has seen its short interest rise to 10%. This may be due to valuation concerns and ongoing weakness in the tech sector.
- Magellan Financial Group Ltd (ASX: MFG) has entered the top ten with short interest of 8.3%. This fund manager has been bleeding funds under management this year. Short sellers don't appear confident this trend will stop.
- Nanosonics Ltd (ASX: NAN) has short interest of 8.2%, which is up slightly week on week again. Short sellers have been targeting this infection prevention company due to a highly disruptive business model change in the key US market.
- Domino's Pizza Enterprises Ltd (ASX: DMP) is a new entry in the top ten with 8.2% of its shares held short. Inflationary pressures have been weighing on the pizza chain operator's performance this year.
- Breville Group Ltd (ASX: BRG) has seen its short interest rise to 7.9%. This high level of short interest may have been driven by concerns over what the uncertain economic backdrop could mean for consumer spending.
- Perpetual Limited (ASX: PPT) has seen its short interest rise to 7.7%. This fund manager's shares have been hammered this year. Unfortunately, it appears as though short sellers see more pain ahead.
