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 its long run as the most shorted ASX share with short interest of 20.8%. This is down week on week but still significantly higher than second place. The prospect of lithium prices remaining at current levels for years is spooking investors.
- IDP Education Ltd (ASX: IEL) has 13.5% of its shares held short, which is up week on week again. This language testing and student placement company has come under pressure after revealing that it is being negatively impacted by student visa changes in a number of key markets.
- Liontown Resources Ltd (ASX: LTR) has 11.3% of its share held short, which is up week on week again. This lithium developer is potentially only a matter of weeks away from commencing production at the Kathleen Valley Lithium Project. Given how low lithium prices are, this may not be the best time to start activities.
- Westgold Resources Ltd (ASX: WGX) has short interest of 10.5%, which is up for a seventh week in a row. This appears to have been driven by doubts over the gold miner's proposed merger with Canada-based Karoa Resources. Nevertheless, Westgold Resources shares are up 76% over the last 12 months.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.8%, which is up since last week. Short sellers have been going after this lithium miner after it revealed that it is paying more to produce lithium than it receives from buyers.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease to 9.6%. Doubts over its ability to achieve revenue margin expectations could be weighing on this travel agent's shares.
- Syrah Resources Ltd (ASX: SYR) has short interest of 9.5%, which is down week on week. This graphite miner is being negatively impacted by weak battery materials prices. This has led to production suspensions and further cash burn.
- Chalice Mining Ltd (ASX: CHN) has short interest of 9.4%, which is down week on week. This mineral exploration company's shares are down almost 80% over the last 12 months and short sellers appear to believe further declines are coming.
- Strike Energy Ltd (ASX: STX) is back in the top ten with 8.5% of its shares held short. This gas company's shares have been hammered in 2024 amid disappointment over drilling at the SE-3 well.
- Australian Clinical Labs Ltd (ASX: ACL) has short interest of 8.4%, which is flat since last week. This health imaging company is expecting to report another sizeable decline in earnings in FY 2024.
