Every Monday I like to look at ASIC's short position report to find out which shares are being targeted by short sellers. I do this 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) remains the most shorted share on the ASX with short interest of 16.8%. Short sellers have been increasing their interest in the graphite miner following the release of a trading update which revealed lower than expected prices and higher than anticipated costs for FY 2019.
- Inghams Group Ltd (ASX: ING) has 15.7% of its shares held short, which is up significantly week on week. The poultry producer's shares recently hit an all-time high, but this hasn't put off short sellers.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest decline notably for a second week in a row to 15.1%. Short sellers may be closing positions in order to take profit after Galaxy's shares crashed lower following its disappointing update.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall again, this time to 14.2%. Short sellers may have closed positions after a better than expected half year result from the retail giant.
- Orocobre Limited (ASX: ORE) has short interest of 13.2%, down slightly week on week. I suspect that short sellers could be closing positions on the belief that this lithium miner's shares have bottomed after a sharp decline over the last 12 months.
- InvoCare Limited (ASX: IVC) has 13.1% of its shares held short, down slightly week on week. Short sellers appear to be targeting the funerals company's shares due to their high multiples and its subdued growth prospects.
- Metcash Limited (ASX: MTS) has 12.8% of its shares in the hands of short sellers, which is flat on last week's numbers. Despite trading conditions improving in the supermarket category, short sellers appear to have been targeting Metcash due to the loss of a major supply contract to Drakes South Australia.
- BWX Ltd (ASX: BWX) has seen its short interest remain flat at 12%. The personal care products company's shares have come under significant pressure in recent months following the withdrawal of a takeover approach and a sizeable profit downgrade.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has returned to the top ten with short interest of 10.9%. Short sellers appear to have been building a position in Domino's ahead of its half year results release later this week.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall significantly to 10.8%. With its shares trading close to multi-year lows, it looks as though short sellers may believe they have bottomed.
