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 ASX share by some distance. The online travel agent's short interest remained flat week on week at 14.9%. Short sellers appear to believe the Webjet share price is severely overvalued at the current level.
- Tassal Group Limited (ASX: TGR) has seen its short interest rise again week on week to 12.2%. There are concerns that this salmon producer and other seafood producers could become the next victims of the Australia-China trade war.
- Mesoblast limited (ASX: MSB) has seen its short interest increase to 10.3%. Short sellers continue to target this biotech company after a series of trial disappointments.
- Speedcast International Ltd (ASX: SDA) still has short interest of 9.3%. The communications satellite technology provider's shares have been suspended for around one year as it undertakes a recapitalisation.
- Inghams Group Ltd (ASX: ING) has 8.4% of its shares held short, which is flat week on week. Short sellers appear to believe that this poultry producer could disappoint in FY 2021 due to an unfavourable sales mix caused by COVID-19.
- AVITA Medical Inc (ASX: AVH) has seen its short interest rise week on week to 8.2%. This medical device company was a poor performer in FY 2020 due to COVID-19 headwinds and short sellers don't appear to believe that the current financial year will be much better. However, it is worth noting its shares have jumped 37% in the space of a month, much to the dismay of those shorting it.
- InvoCare Limited (ASX: IVC) has short interest of 8.1%, which is down slightly week on week. There are concerns that this funerals company could disappoint in FY 2021 due to increasing competition, COVID headwinds, and market share losses.
- A2 Milk Company Ltd (ASX: A2M) has seen its short interest ease to 7.8%. Short sellers don't appear to believe the weakness in the daigou channel will be a quick fix and may be expecting it to persist into FY 2022. This could weigh on its growth in the near term.
- Service Stream Limited (ASX: SSM) has entered the top ten with short interest of 7.3%. This essential network services company's shares came under pressure recently after it revealed that it was sharing its NBN work with other contractors.
- Metcash Limited (ASX: MTS) has re-entered the top ten with short interest of 7.3%. Short sellers aren't giving up on the wholesale distributor despite its strong form so far in FY 2021. They may believe the market is too bullish on its outlook.
