At the start of each week I like to take a look at ASIC's short position report to understand which ASX shares short sellers believe may fall in value over the next few months.
Although they don't always get it right, I still believe it is important to consider short interest prior to making an investment.
At the moment short sellers are betting on the 10 shares below taking a tumble:
- Orocobre Limited (ASX: ORE) is still the most shorted share on the ASX with 22.1% of its shares in the hands of short sellers. The lithium miner's shares are down 23% this year, largely as a result of a sharp reduction in its full-year production guidance.
- Western Areas Ltd (ASX: WSA) has seen its short interest climb to 18%. With nickel prices expected to remain subdued for some time to come, I can't say I'm surprised to see short sellers target the nickel miner.
- Syrah Resources Ltd (ASX: SYR) has short interest of 17.2%, up sharply for the second week in a row. Concerns over an oversupply and its off-take agreements appear to be weighing heavily on investor sentiment.
- Vocus Group Ltd (ASX: VOC) has short interest of 16%, up slightly on last week. Whilst it looks to be a bargain buy at the current share price, I would suggest investors hold off until the release of its full-year results later this year.
- Aconex Ltd (ASX: ACX) has 13.3% of its shares held short. Pleasingly short interest in the software-as-a-service company has continued to fall. I believe this could be a sign the market believes the worst is behind the company now.
- Myer Holdings Ltd (ASX: MYR) has seen short interest rise to 13.2%. The department store operator's recent quarterly update was a big disappointment and I can't say I'm surprised to see short sellers return.
- Mayne Pharma Group Ltd (ASX: MYX) has 12.7% of its shares in the hands of short sellers. Concerns over price-fixing and Trump's policies on generic drugs appear to be weighing heavily on its shares.
- Independence Group NL (ASX: IGO) has short interest of 12.3%. Production delays at its Nova mine have been a big disappointment this year and appear to be the reason behind the sudden rise in short interest.
- Bellamy's Australia Ltd (ASX: BAL) has 12% of its shares held short. The infant formula company's shares have rocketed higher in the last few weeks without any meaningful news. This appears to have caught the attention of short sellers.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) is back in the top 10 once again with 11.2% of its shares in the hands of short sellers. It appears as though short sellers think 46x trailing earnings is too great a premium for the pizza chain operator's shares to trade at.
