Every Monday I like to take a look at ASIC's short position report to find out 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) continues as the most shorted share on the ASX with short interest of 18.9%. A couple of unexpected production downgrades has led to short sellers targeting the lithium miner.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest drop for a second week in a row to 16.9%. With the graphite miner's Balama project due to commence production in August, short sellers appear to be heading for the exits.
- Western Areas Ltd (ASX: WSA) has short interest of 16.9%, down slightly from last week. A recent drop in global nickel prices and a weak outlook is likely to be behind the high level of short interest.
- Myer Holdings Ltd (ASX: MYR) has 15.9% of its shares in the hands of short sellers. Short sellers have been spot on with this one. Last week Myer's shares fell sharply after it advised that it was likely to fall short of its full-year guidance.
- Independence Group NL (ASX: IGO) has seen short interest fall to 14.2%. Short sellers have targeted the gold miner after it cut its production guidance due to delays at its Nova operation.
- JB Hi-Fi Limited (ASX: JBH) has now seen short interest rise for a third week in a row. Approximately 13.9% of the electronics retailer's shares are held short as investors become increasingly bearish ahead of the imminent arrival of Amazon in Australia.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has jumped back into the top 10 with short interest of 12.7%. Despite the high level of short interest I think Domino's could be a good buy and hold investment option at the current share price.
- Retail Food Group Limited (ASX: RFG) has 12.4% of its shares held short, down slightly from last week. A disappointing trading update from the food and beverage company appears to be behind the high level of short interest.
- Metcash Limited (ASX: MTS) has 12.3% of its shares held short. Despite a better-than-expected full-year result at the end of last month, the wholesaler and distributor hasn't been able to shake off short sellers.
- Ardent Leisure Group (ASX: AAD) has short interest of 11.8%, down slightly from last week. With the entertainment company recently providing an upbeat update on its theme parks, I wouldn't be surprised to see short interest continue to fall in the weeks ahead.
