At the start of each week I like to take a look at ASIC's short position report to find out which shares have been targeted by short sellers.
This is because 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.
With that in mind, here are the 10 most shorted shares on the ASX this week:
- Galaxy Resources Limited (ASX: GXY) has become the most shorted share on the ASX with short interest of 17%. The lithium miner has been targeted due to concerns that lithium prices could sink lower due to an oversupply of the battery making ingredient.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest slide to just below 17%. Much to the dismay of short sellers, last week this graphite miner's shares were big movers with an impressive 14.5% gain. The catalyst for this was Syrah's improving operational performance.
- JB Hi-Fi Limited (ASX: JBH) has continued to see its short interest decline, this time to 15.7%. It looks as though some short sellers may believe the retailer's shares have bottomed after hitting a 52-week low earlier this month.
- Inghams Group Ltd (ASX: ING) has 14% of its shares held short, which is up slightly week on week. Short sellers appear to have targeted the poultry producer due to worries that the droughts could lead to rising input costs and weaker margins.
- Orocobre Limited (ASX: ORE) has short interest of 13.5%, up slightly week on week. Last week Orocobre released its quarterly update and revealed a sharper than expected drop in lithium prices.
- Metcash Limited (ASX: MTS) has 12.9% of its shares in the hands of short sellers, which is down on last week's numbers. Short sellers have been targeting the wholesaler and distributor after it announced the loss of a major supply contract.
- InvoCare Limited (ASX: IVC) has 12.7% of its shares held short, down slightly since last week. A benign flu season has weighed heavily on the funeral company's performance in FY 2019.
- NEXTDC Ltd (ASX: NXT) has 12% of its shares held short, down slightly week on week. Although NEXTDC is growing strongly, some short sellers may believe this growth isn't strong enough for its shares to trade on such sky high earnings multiples.
- BWX Ltd (ASX: BWX) has seen its short interest fall slightly to 11.8%. The company behind the Sukin brand has come under pressure over the last 12 months due to its poor trading performance and the withdrawal of a takeover approach.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest remain flat at 11.6%. Short sellers don't appear to believe that the department store operator's turnaround plan is working.
