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 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:
- Webjet Limited (ASX: WEB) is still the most shorted share on the ASX despite its short interest easing slightly to 14.5%. Short sellers don't appear to believe the worst is over for the online travel agent due to the disruption being caused by COVID-19.
- Tassal Group Limited (ASX: TGR) has seen its short interest rise to 11.9%. There are concerns that the salmon producer could become a victim of the trade war between China and Australia.
- Mesoblast limited (ASX: MSB) has seen its short interest ease to 9.3%. This biotech company's shares have come under pressure recently after the release of a series of very disappointing updates. This has sparked fears that a capital raising may be required to keep its operations running.
- Speedcast International Ltd (ASX: SDA) still has short interest of 9.3%. The communications satellite technology provider's shares have been suspended for around a year as it undertakes a recapitalisation.
- Inghams Group Ltd (ASX: ING) has 8.5% of its shares held short, which is up week on week. The poultry producer struggled in FY 2020 because of rising input costs and an unfavourable sales mix caused by COVID-19. It appears as though some don't believe FY 2021 will be better.
- InvoCare Limited (ASX: IVC) has short interest of 8.2%, which is up slightly week on week. This funerals company is believed to be losing market share to rivals. If this is due to prices, then there are fears a price war could ensue.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest ease to 8%. This department store operator was a very poor performer in FY 2020 because of the pandemic. There are fears that FY 2021 could be weak as consumer habits change.
- A2 Milk Company Ltd (ASX: A2M) has seen its short interest rise to 8%. Short sellers don't appear to believe the weakness in the daigou channel will be a quick fix. A2 Milk downgraded its guidance recently to reflect a sharp drop in daigou sales.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise fall to 7.8%. Concerns that the travel market could take longer to recover than hoped appears to be weighing on Flight Centre's shares.
- Metcash Limited (ASX: MTS) has short interest of 7.7%, which is down slightly week on week. Short sellers have been targeting this wholesale distributor despite its very strong performance over the last few months.
