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:
- Inghams Group Ltd (ASX: ING) continues to be the most shorted share on the ASX following yet another rise in its short interest. The poultry producer now has 17.5% of its shares held short. This appears to be related to concerns that the drought will lead to higher input costs and decreased profitability.
- Syrah Resources Ltd (ASX: SYR) has experienced a small rebound in short interest to 16.1%. Disappointing production and pricing guidance has weighed heavily on the graphite producer's shares over the last couple of years.
- Nufarm Limited (ASX: NUF) has short interest of 15.7%, which is up slightly week on week. The agricultural chemical company has come under pressure recently due to the negative impact that the drought is having on its business.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise to 15.7%. Short sellers aren't giving up on this one despite the retailer's shares racing to a 52-week high last month.
- NEXTDC Limited (ASX: NXT) has short interest of 15.1%, which is up slightly week on week. The data centre operator may have been targeted due to the premium its shares are trading at.
- Bellamy's Australia Ltd (ASX: BAL) has short interest of 14.25%, up materially week on week. Short sellers may believe that its organic infant formula isn't going to be granted SAMR accreditation in time for FY 2020.
- Galaxy Resources Limited (ASX: GXY) has short interest of 14.2%, which is up slightly week on week. This lithium miner's shares have fallen heavily in 2019 after lithium prices continued their sizeable decline.
- Orocobre Limited (ASX: ORE) has short interest of 12.9%, which is up strongly week on week. News that mining giant SQM expects lithium prices to fall a further 20% this year has also weighed heavily on lithium miners.
- BWX Ltd (ASX: BWX) has seen its short interest rise to 11.9%. Short sellers continue to increase their stake after the personal care products company revealed that its key Sukin brand is struggling again.
- Metcash Limited (ASX: MTS) has 11.35% of its shares held short, which is down week on week once again. Increased competition from the likes of Aldi and Lidl appears to be behind the high level of short interest.
