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.
This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be an indication that something isn't quite right.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Syrah Resources Ltd (ASX: SYR) has returned to the top of the list and is the most shorted share with 17.7% of its shares held short. A disappointing quarterly update out of the graphite miner appears to have led to short sellers increasing their positions.
- Galaxy Resources Limited (ASX: GXY) has dropped from the top spot after experiencing a sharp reduction in its short interest to 16.3%. Short sellers have been targeting Galaxy and its lithium peers due to weakening prices of the white metal.
- Inghams Group Ltd (ASX: ING) is back in the top ten with 15.6% of its shares held short. There are concerns that the poultry producer's profits could be hit by higher input costs due to the droughts.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest jump to 15.7%. Much to the dismay of short sellers, last week JB Hi-Fi released a solid third quarter update and reaffirmed its full year guidance despite the housing market downturn.
- NEXTDC Limited (ASX: NXT) has short interest of 15.1%, which is flat week on week. Although NEXTDC is benefiting from the cloud computing boom, some investors appear to believe the data centre operator's growth will not be as strong as expected.
- Nufarm Limited (ASX: NUF) has short interest of 14.7%, which is up slightly week on week. A disappointing half year result from the crop protection and specialist seed company has put a lot of pressure on its shares this year.
- Orocobre Limited (ASX: ORE) has short interest of 12.2%, which is up slightly week on week. Last week wasn't a good one for short sellers after M&A activity in the lithium industry led to the lithium miners surging higher.
- Metcash Limited (ASX: MTS) has 11.8% of its shares held short, which is up slightly week on week. Increasing competition from German supermarket giants Aldi, Lidl, and Kaufland and the loss of a major supply contract may be behind the high level of short interest.
- Bellamy's Australia Ltd (ASX: BAL) has short interest of 11.2%, down sharply week on week. Short sellers may have been closing positions after the infant formula company announced SAMR approval for one of its products.
- BWX Ltd (ASX: BWX) has seen its short interest rise to 10.9%. Short sellers don't appear to believe that the company behind the Sukin skincare brand is over the worst of its issues yet.
