Every Monday I like to take a look at ASIC's short position report to find out which ASX shares short sellers believe could fall in value over the coming 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:
- Syrah Resources Ltd (ASX: SYR) continues to be the most shorted share on the ASX with 22.5% of its shares in the hands of short sellers. However, a change of holding notification released last week appears to show some major short sellers closing positions at long last.
- Independence Group NL (ASX: IGO) has seen its short interest climb to 19.8%. Although the gold miner had a reasonably positive first-quarter of FY 2018, short sellers don't appear to believe the worst is behind it yet.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has seen short interest rise to 16.3%. Domino's recent trading update wasn't well-received by the market, much to the relief of short sellers.
- JB Hi-Fi Limited (ASX: JBH) has 15.8% of its shares in the hands of short sellers. They appear to be targeting the retailer ahead of Amazon's expected launch later this month.
- Healthscope Ltd (ASX: HSO) has short interest of 14.6%. Weak full-year guidance and falling private health insurance participation numbers has led to the private hospital operator coming under pressure this year.
- Retail Food Group Limited (ASX: RFG) has seen short interest rise to 12.4%. Its high debt and softer sales are likely to be why short sellers continue to target the food and beverage company.
- Orocobre Limited (ASX: ORE) has 12.1% of its shares held short. With the lithium miners storming higher amid the bullish outlook for the metal, short sellers appear to be closing positions in a hurry.
- Western Areas Ltd (ASX: WSA) has seen its short interest fall to 11.5%. Just like lithium, the market is finally waking up to the potential increase in demand for nickel due to its use in electric vehicle batteries.
- Metcash Limited (ASX: MTS) has short interest of 11%. Short sellers may have their eyes on the wholesale distributor due to the upcoming Amazon launch. While I don't think Amazon's food delivery business is an immediate threat, it could be in the long-term.
- Myer Holdings Ltd (ASX: MYR) is back in the top ten with 10.9% of its shares held short. All eyes will be on the retailer next week when it hosts a disenchanted Solomon Lew at its eagerly anticipated AGM.
