Once a week, I like to look at ASIC's short position report to find out which ASX shares are being targeted by short sellers.
That's because I believe it is 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, listed below are the 10 most shorted shares on the ASX this week according to ASIC.
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The top 10 most shorted ASX shares
- DroneShield Ltd (ASX: DRO) has returned to the top of the table with short interest of 14.9%, which is down slightly week on week. The counter-drone technology company remains a popular target for short sellers. This could be partly due to the ongoing uncertainty created by ASIC's investigation.
- Lotus Resources Ltd (ASX: LOT) has seen its short interest fall sharply to 13.6%, but it remains the second most shorted ASX share. The uranium developer's recent capital raising may have eased some pressure, though short sellers still appear to be questioning development timelines and uranium demand.
- 4DMedical Ltd (ASX: 4DX) has short interest of 12.4%, which is broadly unchanged since last week. The medical imaging technology company continues to divide the market. While some investors see a large commercial opportunity, short sellers may be focusing on the gap between its market valuation and its current revenue base.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest ease to 12.3%. The pizza chain operator is trying to reset the business after a difficult period of store closures, impairments, and weaker trading. Short sellers may be waiting for clearer evidence that the turnaround will succeed.
- CAR Group Limited (ASX: CAR) has short interest of 12.1%, which is flat since last week. This may reflect concerns over the auto listings company's outlook in a difficult operating environment.
- Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest rise to 12%. Short sellers may have concerns over weak wine demand and the pace of the Penfolds owner's recovery.
- Paladin Energy Ltd (ASX: PDN) has 11.2% of its shares held short, which is down slightly week on week. Short sellers appear to believe the market is too optimistic on production, costs, and uranium prices.
- PLS Group Ltd (ASX: PLS) has seen its short interest rise to 11.1%. Short sellers may be betting that prices for the battery-making ingredient remain under pressure, which would be bad news for margins.
- Zip Co Ltd (ASX: ZIP) has entered the top ten with short interest of 10.9%. Its strong share price recovery may have led some short sellers to question whether expectations have run too far, especially given weak consumer spending.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease to 10.8%. Short sellers may still have concerns over Middle East disruption, margins, and travel demand.
