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 on the ASX. The lithium miner's short interest is currently 22.1%, which is up week on week yet again. Short sellers appear confident that weak lithium prices are going to squeeze this miner's profits for several years.
- IDP Education Ltd (ASX: IEL) has 13% of its shares held short, which is up since last week. Short sellers have successfully targeted this language testing and student placement company due to the negative impact of changes to student visas. These changes are weighing on volumes and profits.
- Liontown Resources Ltd (ASX: LTR) has 11.7% of its share held short, which is up week on week again. This miner has just commenced production at the Kathleen Valley Lithium Project, adding more lithium to a market that is already battling oversupply and low prices.
- Chalice Mining Ltd (ASX: CHN) has short interest of 11.2%, which is up week on week once again. There have been concerns over the commodity price assumptions used in this mineral exploration company's project studies.
- Syrah Resources Ltd (ASX: SYR) has short interest of 10.9%, which is up week on week. Short sellers have been successfully shorting this struggling graphite miner due to weak battery material prices and its ongoing cash burn.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest rise again to 10.7%. This is likely to be due to weak rare earths prices.
- Cettire Ltd (ASX: CTT) has 10.1% of its shares held short, which is up again week on week. This luxury products retailer's shares have fallen heavily from recent highs due to concerns over a deterioration in trading conditions and criticism of its business model and customer policies.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest fall to 9.9%. This may be due to doubts that the travel agent will achieve its revenue margin targets.
- Strike Energy Ltd (ASX: STX) has entered the top ten with short interest of 9.8%. This may be due to the energy company's disappointing performance at Walyering and some underwhelming exploration updates.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.8%, which is up since last week. This lithium miner continues to sell its product at a loss instead of curtailing its operations.
