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:
- Pilbara Minerals Ltd (ASX: PLS) remains the most shorted share on the Australian share market with a short interest of 11.5%. This is up strongly week on week. Short sellers appear to believe that lithium prices could continue to tumble in the coming years.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease again to 9.5%. Short sellers have been targeting Flight Centre due to revenue margin headwinds and the cost of living crisis.
- Elders Ltd (ASX: ELD) has seen its short interest fall slightly to 8.8%. This agribusiness company has been underperforming due to tough trading conditions. Short sellers don't appear to believe things will change quickly.
- Genesis Minerals Ltd (ASX: GMD) has entered the top ten with a short interest of 8.8%. Short sellers may see execution risks from the gold miner's recent acquisitions.
- IDP Education Ltd (ASX: IEL) has 8.6% of its shares held short, which is up strongly week on week. The loss of its monopoly in Canada could be why short sellers continue to target this language testing and student placement company.
- Core Lithium Ltd (ASX: CXO) has a short interest of 7.9%, which is down slightly week on week. This may be due to concerns over the outlook for lithium prices.
- Select Harvests Ltd (ASX: SHV) has seen its short interest rise to 7.7%. Tough trading conditions continue to weigh on this almond producer's performance.
- Sayona Mining Ltd (ASX: SYA) has entered the top ten with a short interest of 7.5%. This lithium miner's shares have lost half their value this year and short sellers don't appear to believe the pain is over.
- Syrah Resources Ltd (ASX: SYR) has a short interest of 7.4%, which is down week on week. Positively, a recent cash injection appears to have removed the need for a capital raising in the near future.
- Mesoblast Ltd (ASX: MSB) has a short interest of 7.3%, which is up slightly since last week. This stem cell-focused biotech has been having big issues getting approval for its therapies from the US FDA.