At the start of each week I like to take a look at data provided by ASIC to see which shares are being targeted by short sellers.
Unlike the majority of investors, short sellers aim to profit from share price declines. They do this by borrowing shares to sell on market with the aim of buying them back at a lower price in the future.
Currently short sellers have their eyes firmly fixed on the following 10 shares:
- Myer Holdings Ltd (ASX: MYR) continues to be the most-shorted share on the ASX with short interest of 17.6%. It would appear as though the market isn't expecting a strong half-year result next week.
- Aconex Ltd (ASX: ACX) has seen short interest rise slightly week-on-week to 16.9%. Whilst its shares still look reasonably expensive, I believe the current share price could make it a good buy and hold investment.
- Worleyparsons Limited (ASX: WOR) has 13.8% of its shares held short. Unfortunately for short sellers the mining service company's share price rose 30% last week after it received a takeover offer.
- Western Areas Ltd (ASX: WSA) has short interest of 13.8%. I'm reasonably bearish on the nickel producer this year due to having subdued expectations on prices following Indonesia's decision to lift its ban on nickel exports.
- TFS Corporation Limited (ASX: TFC) has 13.2% of its shares in the hands of short sellers. Last week the sandalwood plantation manager reported a 58% drop in net profit after tax.
- Orocobre Limited (ASX: ORE) has seen short interest rise to 11.8%. It would appear that the market was not impressed with the lithium miner's decision to cut its annual production guidance down to between 12,000 and 12,500 tonnes from 15,000 tonnes.
- Vocus Group Ltd (ASX: VOC) has seen short interest rise slightly to 11.5%. I was impressed with the fast-growing telco company's half-year result and believe it could prove to be a great buy and hold investment despite the rising short interest.
- Syrah Resources Ltd (ASX: SYR) has short interest of 10.7%, up slightly again on a week earlier. Although the graphite miner's share price has fallen 40% in the last 12 months, some investors appear to believe it can still go lower.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) has short interest of 10.5%, down slightly on last week. The media company's share price has fallen 34% since this time last year.
- Metcash Limited (ASX: MTS) has 10% of its shares in the hands of short sellers. Short interest in the wholesale distributor rose strongly week-on-week.
