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 ASX share after its short interest increased once again to a sizeable 18.5%. Approximately $2 billion is being bet on the lithium miner's shares falling. Short sellers appear confident that lithium prices are going to sink.
- Syrah Resources Ltd (ASX: SYR) has a short interest of 17.4%, which is up week on week again. Short sellers continue to build their positions despite China putting restrictions on graphite exports.
- Genesis Minerals Ltd (ASX: GMD) has seen its short interest ease slightly to 10.5%. This miner has been on an acquisition spree recently. Traders may be concerned over integration risks.
- Core Lithium Ltd (ASX: CXO) has a short interest of 10.1%, which is down week on week. Falling battery material prices appear to be behind this.
- Appen Ltd (ASX: APX) has seen its short interest fall to 10%. This artificial intelligence data services company has been greatly underperforming and short sellers don't appear to believe much will change in the near term.
- IDP Education Ltd (ASX: IEL) has 9.7% of its shares held short, which is down slightly week on week. Short sellers appear to believe the loss of its monopoly in Canadian language testing could be a big blow to earnings.
- Flight Centre Travel Group Ltd (ASX: FLT) has 9.45% of its shares held short, which is up week on week. Short sellers appear to believe that revenue margin headwinds won't go away any time soon.
- Sayona Mining Ltd (ASX: SYA) has 9.4% of its shares held short, which is up week on week. This is yet another ASX lithium share that short sellers have loaded up on.
- Bank of Queensland Ltd (ASX: BOQ) has a short interest of 8.8%, which is flat from last week. Weak volume momentum, intense competition in mortgage loans, and inflationary pressures on costs are likely to be behind this.
- Mesoblast Ltd (ASX: MSB) has 8.2% of its shares held short, which is flat week on week. This biotech has been struggling to get its products approved by the FDA. This has led to countless capital raisings and a very poor share price performance.