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:
- Paladin Energy Ltd (ASX: PDN) continues to be the most shorted ASX share after its short interest rose week on week to 16%. Short sellers have been increasing their positions after the uranium miner downgraded its production guidance and scrapped its sales guidance.
- Boss Energy Ltd (ASX: BOE) has 14.2% of its share held short, which is up slightly since last week. Short sellers are betting on this uranium producer's costs coming in significantly ahead of expectations.
- Pilbara Minerals Ltd (ASX: PLS) has seen its short interest rebound to 13.2%. Short sellers don't appear to believe the worst is over for this lithium miner. Though, a broker upgrade and heavy insider buying from its CEO may give them something to think about.
- Syrah Resources Ltd (ASX: SYR) has short interest of 13.2%, which is flat since last week. Last week this graphite miner's shares crashed after it declared a force majeure at its Balama operation in Mozambique due to civil unrest.
- IDP Education Ltd (ASX: IEL) has 12.8% of its shares held short, which is down slightly week on week. Short sellers have done well with this one. Student visa changes have been weighing heavily on this language testing and student placement company's shares.
- Mineral Resources Ltd (ASX: MIN) has short interest of 12.5%, which is up week on week again. This mining and mining services company's shares have been sold off this year for a variety of reasons. This includes weak lithium prices and the conduct of its founder and CEO.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has short interest of 11.1%, which is up week on week again. There are concerns that this pizza chain operator could still be struggling to turn around its performance.
- Deep Yellow Limited (ASX: DYL) has 10.6% of its shares held short, which is up week on week. Deep Yellow is another uranium stock that short sellers are going after.
- Liontown Resources Ltd (ASX: LTR) has 9.7% of its shares held short, which is up slightly week on week again. This lithium miner recently reduced its guidance to reflect weak commodity prices.
- Lynas Rare Earths Ltd (ASX: LYC) is back in the top ten with short interest of 9.3%. Some analysts have concerns that some manufacturers could start looking for alternatives to rare earths and reduce demand.
