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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) remains the most shorted ASX share with short interest of 10.6%, which is down week on week. Short sellers appear to believe the market is too optimistic on the travel agent's outlook.
- Core Lithium Ltd (ASX: CXO) has short interest of 9.5%, which is down slightly week on week. Short sellers appear to believe this lithium miner could be severely overvalued if lithium prices fall.
- IDP Education Ltd (ASX: IEL) has seen its short interest rise again to 8.9%. Short sellers have been loading up on IDP Education's shares after it lost its monopoly in Canada.
- Lake Resources N.L. (ASX: LKE) has 8.9% of its shares in the hands of short sellers, which is flat since last week. Short sellers are targeting lithium miners on the belief that battery material prices are going to sink.
- Megaport Ltd (ASX: MP1) has short interest of 8.1%, which is down week on week. Short sellers may believe that the market is too optimistic on this network as a service operator's recent recovery.
- AMA Group Ltd (ASX: AMA) has seen its short interest remain flat at 7.8%. Balance sheet concerns are weighing on sentiment for this crash repair company.
- Pilbara Minerals Ltd (ASX: PLS) has short interest of 7.7%, which is up week on week. This also seems to be due to concerns that lithium prices are about to tumble.
- Temple & Webster Group Ltd (ASX: TPW) has 7.6% of its shares in the hands of short sellers, which is down slightly week on week. This may be due to fears that this furniture retailer's sales could suffer given the current economic environment.
- Lendlease Group (ASX: LLC) has entered the top ten with short interest of 7.6%. A mixed performance from the global property developer seems to have spooked investors.
- Breville Group Ltd (ASX: BRG) has 7.5% of its shares held short, which is up slightly since last week. This may be due to concerns that the cost of living crisis could impact demand.
