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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:
- Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted share on the ASX with short interest of 14.75%. This is a small week on week increase. Short sellers appear concerned over the travel market recovery amid rising living costs.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease to 14.3%. This betting technology company's shares trade on lofty multiples, which could have caught the eye of short sellers.
- Block Inc (ASX: SQ2) has seen its short interest rise to 11.4%. Investors appear worried that a global recession could have an impact on this payments company's growth.
- Megaport Ltd (ASX: MP1) has seen its short interest remain flat at 10%. This appears to have been driven by valuation concerns and ongoing weakness in the tech sector.
- Lake Resources N.L. (ASX: LKE) has short interest of 9.9%, which is down week on week again. Short sellers have doubts over this lithium developer's DLE technology.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest jump to 9.3%. There are concerns that cost inflation could be weighing on its performance.
- Perpetual Limited (ASX: PPT) has seen its short interest jump to 8.7%. Short sellers may not be overly keen on its proposed $2.5 billion acquisition of rival Pendal Group Ltd (ASX: PDL).
- Nanosonics Ltd (ASX: NAN) has short interest of 8.4%, which is up week on week again. There are concerns that this infection prevention company could underperform due to a disruptive business model change in the key US market. Delays to new product launches have also hit sentiment hard.
- Magellan Financial Group Ltd (ASX: MFG) has short interest of 8.3%, which is flat week on week. This fund manager's shares have fallen heavily this year due to significant funds under management weakness. Short sellers don't appear to believe the worst is over.
- Breville Group Ltd (ASX: BRG) has seen its short interest rise to 8%. Investors appear concerned that the uncertain economic backdrop could impact consumer spending on kitchen goods.
