These are the 10 most shorted shares on the ASX

The Syrah Resources Ltd (ASX:SYR) share price and the Orocobre Limited (ASX:ORE) share price are two of ten being tipped to sink lower by short sellers…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

At the start of each week I like to have a quick look at which ASX shares are attracting the most unwanted attention from short sellers.

When an investor shorts a company's shares they are essentially borrowing shares to sell on market, with the aim of buying them back at a lower price further down the line.

But as rewarding as the strategy can be, it is a high risk one with theoretically unlimited losses.

According to data provided by ASIC, at the moment short sellers are betting on the 10 shares below taking a tumble in the coming months:

  • Syrah Resources Ltd (ASX: SYR) is still the most shorted share on the ASX with short interest of 20.5%. The graphite miner hasn't let this hold it back. Its shares are up 39% in a month as the commencement of production at Balama draws closer.
  • Orocobre Limited (ASX: ORE) has seen its short interest continue to fall, this time to 16.5%. It seems that short sellers have been closing positions in a hurry following a solid full-year result and an increasingly bullish outlook for global lithium demand.
  • Independence Group NL (ASX: IGO) has seen its short interest rise again to 15.5%. Production delays and the belief that the gold price may have peaked appear to be behind the rising short interest.
  • Myer Holdings Ltd (ASX: MYR) has 14.8% of its shares held short. The department store operator's shares have fallen 48% in 2017 as investors become increasingly bearish on its prospects.
  • Western Areas Ltd (ASX: WSA) has seen short interest slide to 14.7%. Nickel prices have been weakening in recent weeks, putting pressure on the nickel producer's shares.
  • Retail Food Group Limited (ASX: RFG) has 13.7% of its shares held short. Whilst I think the food and beverage company's performance has been a touch disappointing, it does look to be good value at the current share price.
  • Select Harvests Limited (ASX: SHV) has 13.4% of its shares in the hands of short sellers. Short sellers appear to have targeted the almond producer after a disappointing decline in production volumes led to a 73% fall in its reported full-year net profit.
  • Domino's Pizza Enterprises Ltd. (ASX: DMP) has 13.4% of its shares held short. A disappointing full-year result appears to have some short sellers convinced that the pizza chain operator's best days are behind it.
  • JB Hi-Fi Limited (ASX: JBH) has short interest of 13.4%. The potential arrival of Amazon in Australia before Christmas appears to be weighing heavily on the retailer and its industry rivals.
  • Aconex Ltd (ASX: ACX) has entered the top 10 with short interest of 11.8%. Some short sellers appear unconvinced that the software-as-a-service company can deliver the level of earnings growth that would justify the premium its shares trade at.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of ACONEX FPO and Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »