At the start of each trading week I like to look at ASIC's short position report to find out which shares short sellers are targeting.
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:
- Syrah Resources Ltd (ASX: SYR) has returned to the top of the most shorted list with short interest of 17%. Short sellers continue to target the graphite producer despite its improving operational performance.
- Galaxy Resources Limited (ASX: GXY) has dropped from the top spot after its short interest fell to 16.5%. Last week the lithium miner released its quarterly update and revealed a significant drop in the price of the white metal and warned that prices have weakened further in 2019.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rebound to 16.2%. Concerns over the weakness in the white goods market due partly to the housing market slowdown has weighed on the retailer's shares in recent months.
- Inghams Group Ltd (ASX: ING) has 15.3% of its shares held short, which is up sharply week on week. The poultry producer continues to be targeted by short sellers due to worries that input costs could be rising due to the droughts.
- Orocobre Limited (ASX: ORE) has short interest of 13.3%, down slightly week on week. Like Galaxy, earlier this month Orocobre released its quarterly update and revealed a sharper than expected drop in lithium prices.
- Metcash Limited (ASX: MTS) has 13.2% of its shares in the hands of short sellers, which is up slightly on last week's numbers. The wholesaler and distributor has come under pressure due to rising competition and the loss of a major supply contract.
- InvoCare Limited (ASX: IVC) has 12.8% of its shares held short, up slightly since last week. A benign flu season and heavy investment in its growth strategy has weighed heavily on the funeral company's shares so far in FY 2019.
- NEXTDC Ltd (ASX: NXT) has 12.1% of its shares held short, up slightly week on week. Short sellers may believe the data centre operator's shares are overvalued at current levels.
- BWX Ltd (ASX: BWX) has seen its short interest fall slightly to 11.7%. The personal care products company has been hit hard in recent months due to a combination of its poor trading performance and the withdrawal of a takeover offer.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest remain flat once again at 11.6%. Short sellers appear to believe that the department store operator's turnaround plan is doomed to fail.
