At the start of each week I like to take a look at ASIC's short positions report table to see which ASX shares short sellers are hoping will fall in value over the next few months.
Whilst short sellers don't always get it right (in fact they often get it wrong), I believe rising short interest should be viewed as a potential warning sign for investors.
Here are the 10 most shorted shares on the ASX this week:
- Orocobre Limited (ASX: ORE) continues to be the most shorted share on the ASX with 20.3% of its shares now in the hands of short sellers. Short interest has risen sharply since the lithium miner cut to its annual production guidance.
- Western Areas Ltd (ASX: WSA) has seen its short interest fall to 17.3%. I'm quite bearish on the nickel producer this year due to a significant amount of new supply hitting the market following the lifting of a nickel export ban in Indonesia.
- Syrah Resources Ltd (ASX: SYR) has seen short interest rise once again, this time to 16.4%. The graphite producer recently announced that the commissioning of its Balama graphite project was on schedule.
- Aconex Ltd (ASX: ACX) has seen short interest drop sharply to 16.3%. Although the high level of short interest is a concern, I think this software-as-a-service company could still prove to be a great buy and hold investment.
- Quintis Ltd (ASX: QIN) has 11.6% of its shares held short. The sandalwood plantation manager (formerly known as TFS Corporation) was recently targeted by U.S. short sellers.
- Myer Holdings Ltd (ASX: MYR) has seen short interest fall to 13%. Short interest had been as high as 17% recently, but speculation of a takeover offer appears to have scared off many short sellers.
- Nine Entertainment Co Holdings Ltd (ASX: NEC) has 11.6% of its shares held short, up sharply from last week. Despite this the media company's share have rallied higher by almost 22% in the last 30 days.
- Vocus Group Ltd (ASX: VOC) has seen short interest fall slightly to 11.4%. Whilst this level of short interest is a worry, I believe its strong growth prospects make it worth considering as a buy and hold investment.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has 10.7% of its shares held short again. It appears as though short sellers are targeting the pizza chain operator following allegations that franchisees may be mistreating and underpaying employees.
- Mayne Pharma Group Ltd (ASX: MYX) has climbed into the top 10 with short interest of 10.3%. Short sellers may be targeting the pharmaceutical company due to price-fixing allegations by the U.S. Department of Justice.
