Every Monday I like to take a look at ASIC's short position report to find out which shares are being targeted by short sellers. This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right.
With that in mind, here are the 10 most shorted shares on the ASX this week:
- JB Hi-Fi Limited (ASX: JBH) continues as the most shorted share on the ASX with short interest of 19.7%. Although the retailer recently released a better than expected trading update, short sellers are holding firm possibly due to concerns over the performance of its Good Guys business.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest jump week on week to 16.2%. Despite this, Syrah was one of the best performers on the ASX 200 last week following the announcement of a sales agreement and the resumption of production at its Balama project.
- Orocobre Limited (ASX: ORE) has short interest of 16.1%, down meaningfully since last week. Orocobre's share price performed very well last week, possibly due to short sellers buying shares to close positions.
- Galaxy Resources Limited (ASX: GXY) has also seen short interest fall meaningfully since last week. Galaxy now has 15.1% of its shares held short after investor sentiment in the lithium industry improved.
- Inghams Group Ltd (ASX: ING) has 13% of its shares held short, down slightly since last week. Inghams has been touted as a company that could be hit hard by higher input costs due to the impact of the droughts.
- InvoCare Limited (ASX: IVC) has 12% of its shares held short, which is flat on last week. Short sellers may be targeting the funeral company due to its relatively high PE ratio and its low growth prospects.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has once again seen its short interest fall, this time to 11.3%. However, a disappointing update at its annual general meeting last week may have caught the eye of short sellers.
- BWX Ltd (ASX: BWX) has seen its short interest slide meaningfully to 10.8%. The personal care products company has come under pressure this year due to a failed takeover bid and disappointing guidance for FY 2019. Some short sellers may believe its shares have bottomed now.
- IOOF Holdings Limited (ASX: IFL) has entered the top ten with short interest of 10.3%. The financial services company's shares have fallen heavily this year after disappointing funds under management updates.
- NEXTDC Ltd (ASX: NXT) is a new entrant in the top ten with 10.3% of its shares held short. Its sky high PE ratio and the lack of a new big name customer announcement has weighed on its shares in recent months.
