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 with short interest of 21.6%. This is up slightly week on week. Short sellers are betting on a lithium surplus weighing on prices.
- IDP Education Ltd (ASX: IEL) has 16.2% of its shares held short, which is down slightly week on week. This language testing and student placement company has been targeted due to student visa changes in a number of key markets.
- Syrah Resources Ltd (ASX: SYR) has short interest of 13.2%, which is up slightly week on week. Short sellers may believe this graphite miner will continue to burn through cash due to weak battery materials prices and require yet another capital raising.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease week on week to 11.5%. Short sellers appear to have closed a few positions in response to news that the travel agent giant expects record sales in FY 2024.
- Liontown Resources Ltd (ASX: LTR) has 10.3% of its share held short, which is down sharply week on week. Liontown's Kathleen Valley Lithium Project will soon be commencing production and adding to the supply of the white metal.
- Westgold Resources Ltd (ASX: WGX) has short interest of 8.6%, which is up strongly for a second week in a row. This may be due to doubts over the gold miner's plan to merge with Canada-based Karoa Resources.
- Core Lithium Ltd (ASX: CXO) has short interest of 7.8%, which is down week on week. Lithium prices have become so weak that Core Lithium had to suspend mining activities to conserve cash.
- Chalice Mining Ltd (ASX: CHN) has short interest of 7.8%, which is up week on week. Short sellers may be regretting this one. The mineral exploration company's shares rocketed 25% last week following the Federal Budget.
- Sayona Mining Ltd (ASX: SYA) has short interest of 7.6%, which is down week on week. It currently costs this lithium miner $500 per tonne more to produce its lithium than it is selling it for. This hasn't gone unnoticed by short sellers.
- Weebit Nano Ltd (ASX: WBT) has returned to the top ten with short interest of 7.6%. This semiconductor company's shares have lost almost half their value this year. Despite this, it seems that short sellers believe they can fall even further given the company's lack of meaningful revenue and its significant competition.
