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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) has returned to the top of the chart after its short interest rose to 12%. Short sellers don't appear to be giving up on Flight Centre despite its return to form in FY 2023. Revenue margin headwinds may be a cause for concern.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease slightly to 11.6%. Competition and cash burn concerns could be weighing on this betting technology company's shares.
- Sayona Mining Ltd (ASX: SYA) has 10.7% of its shares held short, which is flat week on week. There are fears that lithium prices have now peaked and are about to decline materially.
- Core Lithium Ltd (ASX: CXO) has short interest of 10.1%, which is up week on week. As with Sayona Mining, continued weakness in spot lithium prices appear to have spooked investors.
- Megaport Ltd (ASX: MP1) has seen its short interest fall again to 9.3%. Short sellers have been targeting this network as a service provider after it reported softening operating trends with its results.
- Zip Co Ltd (ASX: ZIP) has short interest of 9.1%, which is up strongly week on week. Short sellers appear to be doubting this buy now pay later provider's ability to achieve its profitability goals.
- Liontown Resources Ltd (ASX: LTR) has short interest of 8.1%, which is up week on week. Concerns over material cost blow outs at the Kathleen Valley Lithium Project have been weighing on sentiment.
- City Chic Collective Ltd (ASX: CCX) has jumped into the top ten with short interest of 7.3%. This plus sized fashion retailer's abject performance and inventory management are likely to be behind this short interest.
- Lake Resources N.L. (ASX: LKE) has 6.9 % of its shares held short, which is flat week on week. Doubts over this lithium developer's technology and project funding are reasons why one short seller is targeting Lake.
- Vulcan Energy Resources Ltd (ASX: VUL) has short interest of 6.8%, which is down slightly week on week. This also appears to be down to lithium prices being tipped to fall materially in the next 18 months.
