At the start of each week I like to look at ASIC's short position report in order 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 a sign that something isn't quite right with a company.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Galaxy Resources Limited (ASX: GXY) remains the most shorted share on the ASX with short interest of 16%. Concerns that the coronavirus could delay a recovery for lithium prices is weighing on Galaxy's shares.
- Myer Holdings Ltd (ASX: MYR) has seen a huge jump in its short interest to 13.5%. Investors may fear the department store operator will come out of the coronavirus crisis in a weakened position.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%, which is flat week on week. Last week the communications satellite technology provider announced that it would be declaring itself bankrupt. Speedcast's shares have been suspended since early February.
- Orocobre Limited (ASX: ORE) has seen its short interest edge lower again to 12.7%. Orocobre is one of a number of lithium miners in the list. Short sellers have been targeting the industry due to a collapse in the price of the white metal and concerns that a recovery could be some time away.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest slide to 10.2%. Short sellers may believe housing market weakness because of the pandemic could weigh on JB Hi-Fi's performance.
- Inghams Group Ltd (ASX: ING) has short interest of 10%, which is down week on week once again. Short sellers have been closing positions consistently over the last few weeks. This is possibly on the belief that demand for Inghams' poultry is increasing due to more people eating at home.
- Perpetual Limited (ASX: PPT) is a new entry into the top 10 and has 9.7% of its shares held short. Concerns over fund outflows and their impact on its earnings and dividends are weighing on its shares.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.7%. Even though the biopharmaceutical company's shares have lost over half of their value from their high, short sellers still appear to believe they are overvalued.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.5%, which is up slightly week on week. Pilbara Minerals is another lithium miner under pressure because of weak lithium prices.
- Zip Co Ltd (ASX: Z1P) has entered the top 10 with short interest of 9.1%. Short sellers may be targeting the buy now pay later provider on the belief that the pandemic will slow its growth and cause a spike in bad debts.
