Every Monday 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 worth keeping a close eye on short interest levels as high levels can sometimes be an indication that something isn’t quite right.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Galaxy Resources Limited (ASX: GXY) remains the most shorted share on the ASX with short interest of 17.3%. Short sellers will have been celebrating last week after the lithium miner’s shares crashed to a 52-week low following a disappointing third quarter update.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise to 16.6%. Weak graphite prices and a number of production disruptions have weighed on its shares over the last 12 months.
- Inghams Group Ltd (ASX: ING) has seen its short interest rebound to 15.5%. The poultry producer has been on short sellers’ radars due to concerns over increasing input costs and narrowing margins because of the droughts.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat at 15.4%. Weak consumer sentiment and the housing market downturn have many investors believing that this retailer could fall short of expectations.
- NEXTDC Limited (ASX: NXT) has short interest of 14.7%, which is up notably week on week again. Short sellers may have concerns over the data centre operator’s sky-high valuation.
- Nufarm Limited (ASX: NUF) has short interest of 14.4%, which is flat week on week. Last month the crop protection and specialist seed company’s shares came under significant selling pressure after a disappointing half year result.
- Bellamy’s Australia Ltd (ASX: BAL) has short interest of 11.7%, down slightly week on week. After a strong run since the start of the year, short sellers may believe that the infant formula company’s shares have run too hard.
- Metcash Limited (ASX: MTS) has 11.7% of its shares in the hands of short sellers, which is flat week on week. Increasing competition from German giants Aldi, Lidl, and Kaufland and the loss of a major supply contract could be the reasons for the high level of short interest.
- Orocobre Limited (ASX: ORE) has short interest of 11.6%, which is flat week on week. The leading lithium miner has come under pressure since the price of the battery making ingredient sank lower over the last 12 months. Recent pricing data reveals further declines again in 2019.
- BWX Ltd (ASX: BWX) has seen its short interest slide to 10.9%. The personal products company has been targeted due to the poor performance of its key Sukin skincare brand.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited and NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019