Every Monday I like to take a look at data provided by ASIC to see which ASX shares are currently being targeted by short sellers.
Although short sellers often get it wrong, I believe investors should pay close attention to high short interest as it could be seen as an early warning sign of a share price decline.
At present these are the 10 most shorted shares on the ASX:
- Orocobre Limited (ASX: ORE) is now the most shorted share on the ASX with 17.8% of its shares in the hands of short sellers. Investors appear to have become increasingly bearish on the lithium miner since it cut its annual production guidance.
- Aconex Ltd (ASX: ACX) isn't far behind with short interest of 17.7%. Whilst I think the software-as-a-service company is one of the best tech shares on the market, the rising short interest is a concern.
- Western Areas Ltd (ASX: WSA) has seen short interest spike for a second week in a row. The nickel producer now has 17.6% of its shares held short.
- Myer Holdings Ltd (ASX: MYR) has 15.8% of its shares in the hands of short sellers. Myer's recent results were certainly a step in the right direction, but not enough to cause short sellers to give up on the department store operator.
- Quintis Ltd (ASX: QIN) has 14.5% of its shares held short. Last week a report from Glaucus Research alleged that the sandalwood plantation manager had a Ponzi-like structure and faces bankruptcy. Until last week Quintis was known as TFS Corporation.
- Syrah Resources Ltd (ASX: SYR) has seen short interest rise slightly to 13.7%. Despite this, the graphite miner's shares rallied strongly at the end of last week after it announced that the commissioning of its Balama project was on schedule.
- Vocus Group Ltd (ASX: VOC) has seen its short interest fall slightly to 11.6%. Although the short interest is a concern, at the current share price I think the telco company provides investors with a compelling risk/reward.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) has 10.6% of its shares held short, down slightly for a second week in a row. The media company's share price has fallen 25% in the last 12 months.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) is a new addition to the top 10 with 10.6% of its shares held short. Short sellers appear to have the pizza chain operator in their sights following allegations that franchisees may be mistreating and underpaying employees.
- Metcash Limited (ASX: MTS) has 10.2% of its shares in the hands of short sellers. Short interest in the wholesale distributor has held steady for a second week in a row.
