At the start of each week 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 again with an increase in short interest to 17.7%. Earlier this month the graphite miner disappointed the market when it downgraded its first-quarter graphite price guidance around six weeks after providing it.
- Inghams Group Ltd (ASX: ING) has short interest of 17.4%, which is up week on week. Short sellers have been shorting the poultry producer's shares due to concerns that drought conditions are increasing input costs and weaker margins.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest increase again, this time to 16.2%. Falling lithium prices due to weaker demand for the battery making ingredient in China have weighed heavily on Galaxy's shares over the last 12 months.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest jump greatly for a second week in a row, this time up to 16%. Weak consumer sentiment and a downturn in the housing market appears to have attracted short sellers to the retailer.
- NEXTDC Limited (ASX: NXT) has short interest of 12.6%, which is flat week on week. The data centre operator's shares are currently trading at a significant premium to the market average and at a level that some short sellers feel makes them overvalued.
- Orocobre Limited (ASX: ORE) has short interest of 12.4%, which is down slightly week on week. Orocobre is another lithium miner that has come under pressure since the white metal's price crashed lower.
- Metcash Limited (ASX: MTS) has 11.6% of its shares in the hands of short sellers, which is up on last week's numbers. Increasing competition in the supermarket industry is likely to be behind the high level of short interest. Earlier this month German hypermarket giant Kaufland announced plans to enter the local market.
- BWX Ltd (ASX: BWX) has seen its short interest rise slightly to 11.5%. Weak sales of its key Sukin skincare range appears to have brought BWX onto the radar of short sellers.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest fall further, this time to 10.5%. Short interest in the department store operator's shares has tumbled notably lower since the release of a solid half year result. High levels of insider buying may also have spooked short sellers.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.3%, up slightly week on week. The Speedcast share price may have fallen heavily over the last 12 months, but short sellers appear to believe it can go lower.
