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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 after its short interest remained flat at 22.1%. This lithium miner's shares have crashed 40% over the past 12 months. Short sellers don't appear to believe the declines are over.
- IDP Education Ltd (ASX: IEL) has 12.9% of its shares held short, which is down slightly week on week. This language testing and student placement company's shares have been hit hard due to changes to student visa regulations in key markets.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest increase to 11.9%. Short sellers have been loading up on this struggling graphite miner since the release of another weak quarterly update.
- Liontown Resources Ltd (ASX: LTR) has 11.9% of its share held short, which is up week on week yet again. Short sellers appear confident that lithium prices are staying lower for longer and will crunch the profitability of miners like Liontown.
- Chalice Mining Ltd (ASX: CHN) has short interest of 11.4%, which is up week on week once again. This mineral exploration company is still many years away from commencing production. This makes it very hard to value its potentially world class project.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest rise further week on week to 11.3%. Rare earths prices have fallen heavily this year and show little sign of rebounding meaningfully in the immediate term.
- Strike Energy Ltd (ASX: STX) has short interest of 10.6%, which is up week on week. Short sellers have been loading up on this energy company's shares following its disappointing performance at Walyering and some underwhelming exploration updates.
- Cettire Ltd (ASX: CTT) has 10.4% of its shares held short, which is up week on week yet again. Short sellers have been targeting the luxury products retailer due to concerns over a deterioration in trading conditions and criticism of its business model.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.9%, which is up since last week. This lithium miner is burning through its cash reserves by selling lithium for less than it costs to produce.
- Paladin Energy Ltd (ASX: PDN) is back in the top ten with short interest of 8.9%. Short sellers appear to believe that recent updates in the uranium industry point to prices being softer than forecast.
