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
- Lotus Resources Ltd (ASX: LOT) remains at the top of the table with short interest of 17%, up from 15.9% last week. The uranium producer continues to attract short sellers, possibly due to concerns over its ability to ramp up production at Kayelekera and deliver the expected financial benefits.
- DroneShield Ltd (ASX: DRO) has seen its short interest rise to 16.2%. Short sellers may be questioning whether the counter-drone technology company's growth can justify its valuation, particularly with the ASIC investigation still creating uncertainty.
- 4DMedical Ltd (ASX: 4DX) has short interest of 12.3%, which is up slightly week on week. Despite encouraging progress with its US commercial rollout, short sellers may believe its current revenue base is too small to support its market valuation.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest rise to 12%. The pizza chain operator remains under pressure as it works to improve store profitability and restore earnings growth following a difficult period.
- IperionX Ltd (ASX: IPX) has jumped to fifth with short interest of 11.7%, up from 10.6% last week. Short sellers may have concerns over the titanium company's valuation and how quickly it can turn its growing production capacity into meaningful earnings.
- Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest ease to 11.4%. The Penfolds owner continues to face challenging conditions in the Americas, with short sellers potentially questioning how quickly its restructuring efforts will improve profitability.
- PLS Group Ltd (ASX: PLS) has 11.2% of its shares held short, which is broadly unchanged since last week. Uncertainty over the timing of a sustained lithium price recovery may be keeping short sellers interested in the miner.
- Telix Pharmaceuticals Ltd (ASX: TLX) has returned to the top ten with short interest of 11%. Despite recently securing US FDA approval for Pixclara, short sellers may still be questioning how quickly its expanding product portfolio can drive earnings growth.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease slightly to 11%. Short sellers may remain wary of disruption to international travel and whether the company can deliver a meaningful improvement in margins.
- Paladin Energy Ltd (ASX: PDN) has short interest of 10.9%, which is broadly flat week on week. The uranium producer continues to attract short sellers, possibly due to doubts over its ability to meet production expectations and keep operating costs under control.
