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 by some distance. Its short interest is currently 21.7%, which is up week on week again. There are concerns that weak lithium prices could squeeze this miner's profits for several years.
- IDP Education Ltd (ASX: IEL) has 12.5% of its shares held short, which is down slightly since last week. This language testing and student placement company has been targeted due to unfavourable student visa changes in a number of key markets which are weighing on volumes and profits.
- Liontown Resources Ltd (ASX: LTR) has 11.15% of its share held short, which is up week on week. Last week, Liontown announced the commencement of lithium production at the Kathleen Valley Lithium Project. While this is a milestone, prices are significantly different to when construction commenced.
- Chalice Mining Ltd (ASX: CHN) has short interest of 11%, which is up week on week. This mineral exploration company is still years away from production at its potentially world class project. It is also some time until a final investment decision is made on the project. And who knows what demand and prices will be at that point.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 10.6%. Short sellers have increased positions after the travel agent released a weaker than expected trading update.
- Syrah Resources Ltd (ASX: SYR) has short interest of 10.6%, which is down week on week. This graphite miner released its quarterly update last month and revealed further cash burn due to weak battery material prices.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest rise to 10.4%. Weak rare earths prices are weighing heavily on this miner's performance and profits this year.
- Westgold Resources Ltd (ASX: WGX) has short interest of 10%, which is up week on week again. Last week, this gold miner completed its merger with Canada-based Karoa Resources.
- Cettire Ltd (ASX: CTT) has 9.9% of its shares held short, which is up again week on week. This online luxury products retailer is battling tough trading conditions. It is also facing criticism of its business model and customer policies.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.6%, which is up since last week. This lithium miner's latest quarterly update revealed that it is selling its product for a loss and burning cash.
