At the start of each week I like to have a look at the short positions data provided by ASIC to find out which ASX shares short sellers are hoping will fall in value over the next few months.
As it is a risky strategy with limitless losses short sellers will only tend to short shares when they believe they have a strong chance of success. For this reason, I believe rising short interest should be seen as a potential warning sign for investors.
According to ASIC's most recent data, here are the 10 most shorted shares on the ASX:
- Myer Holdings Ltd (ASX: MYR) is yet again Australia's most shorted share with 16.6% of its shares held short. The department store operator has seen a slight drop in short interest week on week.
- Aconex Ltd (ASX: ACX) is closing in on Myer with another rise in short interest this week. Currently the software-as-a-service company has 14.8% of its shares in the hands of short sellers. This is a new high for Aconex shares.
- Western Areas Ltd (ASX: WSA) has seen short interest drop this week to 13% from 14% last week. Nickel prices have been tipped to recover in 2017, much to the relief of this miner.
- Metcash Limited (ASX: MTS) has 11.4% of its shares held short currently. Short interest in the wholesale distributor has again fallen slightly week on week.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) has short interest of 11.3%, down slightly from last week. Despite the drop short interest still remains close to the highest level the media company has experienced in recent times.
- TFS Corporation Limited (ASX: TFC) has seen short interest remain flat at 10.8%. Like Nine Entertainment, short interest in the sandalwood plantation manager remains at its highest level this year.
- Syrah Resources Ltd (ASX: SYR) has 10.5% of its shares in the hands of short sellers. But with the graphite miner thought to be a takeover target of South32 Ltd (ASX: S32), I wouldn't be surprised to see these short positions closed very quickly.
- Monadelphous Group Limited (ASX: MND) has seen short interest fall to 9.8%. If oil prices continue to rise then this mining services company might be well placed for a solid 2017.
- Worleyparsons Limited (ASX: WOR) is another mining services company which has seen short interest fall this week. This week 9.6% of its shares are held short, down from 10.7% last week.
- Vocus Communications Limited (ASX: VOC) is a new addition to the top 10 with 9.5% of its shares held short. Although the telco company saw short interest fall last week, short interest in Bellamy's Australia Ltd (ASX: BAL) fell at a greater pace to 9%.
