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:
- Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the ASX with short interest rising to 14.3%. Short sellers appear concerned that the pandemic has disrupted its turnaround plans.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%, which is flat week on week. The communications satellite technology provider's shares have been suspended for some time. It now plans to declare itself bankrupt after failing to recapitalise.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest fall week on week to 12.9%. Investors may believe the lithium miner's shares have bottomed now after falling sharply over the last 12 months due to falling lithium prices.
- Orocobre Limited (ASX: ORE) has seen its short interest drop lower again to 11.5%. Short sellers have been targeting Orocobre due to a collapse in the price of lithium and production disruption during the pandemic. Last week its shares fell to a multi-year low.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest reduce week on week to 9.9%. Unfortunately for short sellers, this retailer's shares have been storming higher over the last few weeks. It recently revealed strong quarterly sales growth despite the pandemic.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.4%, which is down slightly week on week. Pilbara Minerals is another lithium miner which has come under pressure due to weak lithium prices and concerns that a recovery could be delayed because of the pandemic.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.4%. Short sellers appear to believe this biopharmaceutical company's shares are overvalued and could be due for a correction. They are currently changing hands at 59x trailing earnings.
- Zip Co Ltd (ASX: Z1P) has seen its short interest fall to 9.3%. Short sellers have continued to target the buy now pay later company despite it delivering exceptionally strong growth during the month of April.
- Inghams Group Ltd (ASX: ING) has short interest of 9.1%, which is down week on week again. Short sellers have been targeting the poultry company due to concerns over its narrowing margins.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest rise to 8.9%. It looks as though short sellers expect some of Super Retail's retail brands to struggle during the pandemic.
