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Once a 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:
- Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted ASX share after its short interest increased to 14.8%. Concerns over the impact of the Omicron variant on the travel market appears to be behind this high level of short interest.
- Kogan.com Ltd (ASX: KGN) has seen its short interest rise to 12.2%. Short sellers appear to have been increasing their positions since the release of a couple of disappointing industry updates. These appear to have supported the view that Kogan is struggling in FY 2022.
- Zip Co Ltd (ASX: Z1P) has seen its short interest rise to 10.3%. Zip's shares came under pressure last week after its second quarter update revealed slowing momentum in the US market.
- BHP Group Ltd (ASX: BHP) has short interest of 9.8%, which is up week on week once again. Traders are shorting BHP's shares in order to profit from the unwinding of its dual listing. The idea is that they short BHP's ASX shares and buy the cheaper UK shares that will eventually be repatriated.
- Redbubble Ltd (ASX: RBL) has short interest of 9.8%, which is up week on week again. Short sellers will have been very pleased to have seen this ecommerce company's shares tumble last week following a disappointing trading update.
- Mesoblast limited (ASX: MSB) has short interest of 9.5%, which is up week on week. Short sellers continue to increase their holdings following the termination of an agreement with Novartis that would have been worth up to US$1.25 billion.
- Webjet Limited (ASX: WEB) has short interest of 8.9%, which is up week on week. This appears to have been driven by ongoing concerns that the Omicron variant will push back the travel market recovery.
- Polynovo Ltd (ASX: PNV) has seen its short interest ease to 7.8%. Short sellers will have been pleased to see this this medical device company's shares crash last week amid the market volatility. This meant the PolyNovo share price gave back its gains from a week earlier following a trading update.
- Appen Ltd (ASX: APX) has seen its short interest rise to 7.4%. This artificial intelligence data services provider has been tipped to surprise to the upside with its full year results next month. However, short sellers don't appear to be getting nervous ahead of its results and have increased their holdings.
- Nanosonics Ltd (ASX: NAN) has entered the top ten with 7.2% of its shares held short. This may be due to its slow progress with the launch of new products and the lofty multiples that its shares trade on.
