Every Monday I like to take a look at ASIC's short position report to find out which shares have been targeted by short sellers.
The reason for this is that I think it is worth keeping an eye on short interest levels as high levels can sometimes be a sign that something isn't quite right. And as you'll discover below, this has proven to be the case in recent weeks.
With that in mind, here are the 10 most shorted shares on the ASX this week:
- JB Hi-Fi Limited (ASX: JBH) continues to be the most shorted share on the ASX with 17.8% of its shares held short. Short sellers have been targeting JB Hi-Fi over concerns that its sales and margins are under pressure from online competition and a cooling housing market.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest push higher again to 17.2%. This lithium miner has been targeted over concerns that lithium prices could be crumbling from weaker demand and increasing supply.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise slightly week on week to 16.9%. As with lithium, there are fears that softer demand for graphite could have led to weaker than expected prices for Syrah.
- Orocobre Limited (ASX: ORE) has short interest of 13.9%, down slightly week on week. Orocobre's shares were the worst performers on the ASX 200 last week after the company revealed a sharp decline in the price it is commanding for its lithium carbonate.
- BWX Ltd (ASX: BWX) has seen its short interest fall slightly to 13.3%. This personal care products company's shares were crushed last week after it downgraded its earnings guidance for FY 2019 significantly just seven weeks after confirming it.
- Inghams Group Ltd (ASX: ING) has 13.3% of its shares held short, up slightly since last week. Short sellers appear to have been targeting the poultry producer on the belief that the droughts could lead to higher input costs.
- Metcash Limited (ASX: MTS) has 13% of its shares in the hands of short sellers, which is up slightly since last week. The loss of a major supply contract and the rise of Aldi in Australia may be behind the high levels of short interest.
- InvoCare Limited (ASX: IVC) has 12.1% of its shares held short, up slightly since last week. Last week InvoCare's shares sank to a 52-week low after one of its rivals revealed that the industry is facing tough trading conditions this year.
- NEXTDC Ltd (ASX: NXT) has 11.9% of its shares held short, up slightly week on week. I suspect that short sellers are targeting the data centre operator due to the sky high multiples that its shares are trading on.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise to 11.8%. Short sellers may be doubting the department store operator's turnaround plans after its latest sales update disappointed.
