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 very long run as the most shorted share after its short interest increased week on week to 21.3%. Short sellers are betting on lithium prices remaining weak and weighing on the company's profits for some time to come.
- IDP Education Ltd (ASX: IEL) has 13.1% of its shares held short, which is down slightly since last week. This language testing and student placement company is being impacted negatively by student visa changes in a number of key markets.
- Liontown Resources Ltd (ASX: LTR) has 11.1% of its share held short, which is down slightly week on week. Liontown is expected to start lithium production at Kathleen Valley in the coming weeks. Prices are very different to when commissioning first commenced.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest remain flat at 10.3%. This high level of short interest appears to have been driven by concerns over weak consumer spending and revenue margin headwinds.
- Syrah Resources Ltd (ASX: SYR) has short interest of 10.3%, which is up week on week. Investors have been selling off this graphite miner's shares over the last 12 months due to weak battery material prices, production suspensions, and further cash burn.
- Australian Clinical Labs Ltd (ASX: ACL) has short interest of 9.4%, which is up since last week again. Short sellers have been increasing their positions in this health imaging company since it warned that is expecting to report another sizeable decline in profits.
- Chalice Mining Ltd (ASX: CHN) has short interest of 9.4%, which is down slightly week on week. This mineral exploration company's shares have lost almost 80% of their value over the last 12 months. It is still several years until Chalice Mining is hoping to commence mining activities.
- Westgold Resources Ltd (ASX: WGX) has short interest of 9.2%, which is down week on week. The gold miner's proposed merger with Canada-based Karoa Resources appears to have caught the eye of short sellers.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.1%, which is down since last week. Short sellers have been targeting the miner due to its costs being higher than the price of its lithium.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest rise to 8.8%. Depressed rare earths prices have been weighing on investor sentiment.
