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 ASX share after its short interest rose to 19.3%. Short sellers are betting on lithium prices continuing to tumble.
- Syrah Resources Ltd (ASX: SYR) has short interest of 16.9%, which is down slightly week on week. Short sellers appear to also believe that graphite demand and prices will continue to soften.
- Appen Ltd (ASX: APX) has seen its short interest jump to 11.3%. This artificial intelligence (AI) data services company has been struggling to become profitable again despite the AI boom. So much so, it needed to raise funds last month at a huge discount.
- Core Lithium Ltd (ASX: CXO) has a short interest of 11.2%, which is up again week on week. This lithium miner hit a new 52-week low last week amid falling battery material prices.
- Genesis Minerals Ltd (ASX: GMD) has seen its short interest ease to 9.9%. Short sellers are going after this gold miner despite the strong gold price. This may be due to integration risks from recent acquisitions.
- Sayona Mining Ltd (ASX: SYA) has 9.7% of its shares held short, which is up week on week. This is yet another lithium miner that short sellers are targeting. Its shares also hit a new 52-week low last week.
- Flight Centre Travel Group Ltd (ASX: FLT) has 9.3% of its shares held short, which is down slightly week on week. Short sellers appear to believe the market is too bullish on the travel agent's recovery.
- IDP Education Ltd (ASX: IEL) has 9.1% of its shares held short, which is down week on week. Short interest in this language testing company surged after it lost its monopoly in Canada.
- Bank of Queensland Ltd (ASX: BOQ) has a short interest of 8.3%, which is down from last week. This may have been driven by intense competition in Australian mortgage loans.
- Lendlease Group (ASX: LLC) has entered the top ten with a short interest of 7.8%. Short sellers may believe the market is overestimating Lendlease's earnings due to tough market conditions.