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 despite another reduction in its short interest to 13.6%. It appears as though traders believe the pandemic has hastened the structural decline of department stores.
- Speedcast International Ltd (ASX: SDA) has short interest of 13.2%. This communications satellite technology provider's shares remain suspended while it declares itself bankrupt.
- Super Retail Group Ltd (ASX: SUL) has seen its short interest remain flat at 10.9%. A number of this retail group's brands look likely to have been impacted greatly by the pandemic. This could mean soft results and lower dividends in FY 2020 and FY 2021.
- Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 10.7%. Short sellers were closing their positions despite Chinese lithium prices tumbling to their lowest levels of the year last week.
- Webjet Limited (ASX: WEB) has jumped into the top ten with short interest of 9.7%. Traders may believe the online travel agent's shares are overvalued after a strong rebound. Especially given the dilution caused by its capital raising.
- Orocobre Limited (ASX: ORE) has seen its short interest slide to 9.4%. This lithium miner's shares were strong performers last week, possibly due to short sellers closing positions. Its shares have been hammered in recent times due to a collapse in lithium prices.
- Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.3%. Traders may be targeting the biopharmaceutical company on the belief that its outlook doesn't justify the lofty valuation its shares trade on.
- Nearmap Ltd (ASX: NEA) has seen its short interest edge higher to 9.3%. Unfortunately for short sellers, this aerial imagery technology company's shares have been racing higher in recent weeks after a positive market update.
- Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.2%, which is down slightly week on week. Pilbara is another lithium miner which experienced a decline in short interest last week. Short sellers may believe the worst is over for the industry.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall week on week to 9%. It appears as though some short sellers have been closing positions in response to the retailer's solid sales performance during the pandemic.
