Every Monday 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 well 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) remains the most shorted share on the Australian share market with short interest of 11.9%. With more and more spending shifting online, short sellers appear to believe Myer's prospects of a successful turnaround are dwindling.
- Speedcast International Ltd (ASX: SDA) has short interest of 11.7% again. This communications satellite technology provider's shares have been suspended since February after its debt load became too much and led to it declaring itself bankrupt.
- Inghams Group Ltd (ASX: ING) has 9.7% of its shares held short, which is up slightly week on week. The poultry company's shares have come under pressure amid concerns that its performance in FY 2020 could be impacted by an unfavourable sales mix because of the pandemic. Increased feed costs could also weigh on margins.
- Webjet Limited (ASX: WEB) has seen its short interest fall slightly week on week to 9.6%. Short sellers appear to believe that the online travel agent's shares are overvalued based on its medium term outlook because of difficult travel markets.
- Orocobre Limited (ASX: ORE) has seen its short interest surge higher week on week to 8.25%. Last week the lithium miner revealed that it has cut its operating costs to their lowest on record. However, this is still higher than the price it is commanding for its lithium.
- CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 8%. Last week this biopharmaceutical company released its fourth quarter update and revealed a 20% decline in cash receipts compared to the prior corresponding period. Lockdowns led to softening sales of its SCENESSE product.
- Nearmap Ltd (ASX: NEA) has seen its short interest fall to 7.8%. Short sellers appear to be closing positions after the aerial imagery technology and location data company's performance remained solid during the pandemic.
- Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.8%. Last month the regional bank lifted its coronavirus provisions and warned that there could be more to come. Short sellers appear confident that the worst is not over for the bank.
- Zip Co Ltd (ASX: Z1P) has short interest of 7.7%, down slightly week on week. Short sellers may be targeting the buy now pay later provider due to a recent rise in bad debts. Though, it is worth noting that forward indicators are pointing to these easing.
- Galaxy Resources Limited (ASX: GXY) has re-entered the top ten with short interest of 7%. Rock bottom lithium prices are weighing heavily on Galaxy's profits and look unlikely to improve any time soon due to oversupply issues.
