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) continues to be the most shorted share with a short interest of 13.1%, which is up week on week. Collapsing lithium prices are weighing heavily on this miner and the rest of the industry.
- Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 10.9%. Traders seem to be betting on integration issues arising from this gold miner's recent acquisition spree.
- Syrah Resources Ltd (ASX: SYR) has a short interest of 10.7%, which is up week on week again. Weak graphite prices are likely to be behind this high level of short interest.
- Liontown Resources Ltd (ASX: LTR) has jumped into the top ten with a short interest of 9.9%. Short sellers appear convinced that Albemarle Corp (NYSE: ALB) will not follow through on its takeover proposal now Gina Rinehart has a blocking stake.
- Flight Centre Travel Group Ltd (ASX: FLT) has 9.7% of its shares held short, which is up slightly week on week. Revenue margin headwinds and consumer spending concerns could be behind this.
- IDP Education Ltd (ASX: IEL) has 9.3% of its shares held short, which is up week on week. This may be due to the loss of its monopoly in the Canadian market, visa changes in Australia, and Canada-India tensions.
- Core Lithium Ltd (ASX: CXO) has a short interest of 9.2%, which is up week on week. Weak lithium prices and disappointing guidance have been weighing heavily on its shares.
- Sayona Mining Ltd (ASX: SYA) has 8.7% of its shares held short, which is up week on week. Once again, this appears to have been driven by falling lithium prices.
- Appen Ltd (ASX: APX) has seen its short interest rise to 8.4%. This artificial intelligence data services company's performance in recent years has deteriorated materially due to rising competition. Short sellers don't appear to believe things will change in a hurry.
- Mesoblast Ltd (ASX: MSB) has a short interest of 8%, which is up since last week. Short sellers appear to believe this stem cell-focused biotech company will struggle to gain US FDA approval for its products.