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:
- Core Lithium Ltd (ASX: CXO) remains the most shorted share after its short interest increased to 11.3%. Short sellers have been loading up on this lithium miner's shares after its production guidance fell well short of expectations.
- IDP Education Ltd (ASX: IEL) has 10.1% of its shares held short, which is up week on week again. This language testing and student placement company has come under pressure since it lost its testing monopoly in Canada.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest remain flat at 10%. While short interest has been dropping since the travel agent upgraded its guidance, some short sellers appear to be sticking around. This may be due to revenue margin concerns.
- Syrah Resources Ltd (ASX: SYR) has short interest of 8.7%, which is down slightly week on week. This graphite producer has come under pressure after the company was forced to moderate production due to soft demand and weak prices. There are concerns another capital raising may be necessary if things don't improve.
- JB Hi-Fi Limited (ASX: JBH) has short interest of 8.3%, which is up week on week. With interest rates hitting consumer spending, short sellers appear to be betting on JB Hi-Fi falling short of expectations in the near term.
- Select Harvests Ltd (ASX: SHV) has 7.9% of its shares held short, which is up week on week. This almond producer posted a big loss this year and short sellers don't seem to think things will improve quickly.
- Brainchip Holdings Ltd (ASX: BRN) has seen its short interest rise to 7.6%. This meme stock continues to attract short sellers that appear to doubt its ability to grow into its valuation.
- Lendlease Group (ASX: LLC) has short interest of 7.4%, which is flat week on week. Last month, this global property company announced huge job cuts to reduce costs amid a tough operating environment.
- Lake Resources N.L. (ASX: LKE) has short interest of 7.2%, which is down slightly since last week. This struggling lithium developer recently announced significantly lower production guidance with higher costs and a longer timeframe.
- Pilbara Minerals Ltd (ASX: PLS) has entered the top ten with short interest of 7.1%. Some short sellers may be betting on lithium prices sinking and putting pressure on this miner's earnings.
