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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 its long run as the most shorted ASX share after its short interest rose slightly to 11.8%. Short sellers aren't giving up on this one despite a recent trading update coming in strong. Revenue margin headwinds appear to be the chief concern of short sellers.
- Zip Co Ltd (ASX: ZIP) has short interest of 10.25%, which is down week on week. Profitability and regulatory concerns seem to be behind this.
- Core Lithium Ltd (ASX: CXO) has short interest of 8.8%, which is down week on week. Short sellers will be frustrated to have seen this lithium miner's shares rocket higher last week after further M&A activity in the industry.
- Jervois Global Ltd (ASX: JRV) has 8.6% of its shares held short, which is down week on week. The suspension of the final construction of the Idaho Cobalt Operations has hit this company's shares hard.
- Sayona Mining Ltd (ASX: SYA) has seen its short interest ease to 8.5%. Sayona Mining's shares also rose strongly last week amid further lithium M&A activity.
- Pointsbet Holdings Ltd (ASX: PBH) has 8.45% of its shares held short, which is up slightly week on week. Short sellers appear concerned by this sports betting company's huge cash burn in a highly competitive industry.
- Lake Resources N.L. (ASX: LKE) has 8% of its shares in the hands of short sellers, which is down since last week. An almost 20% gain last week by this lithium developer's shares will have been hard for short sellers to take.
- AMA Group Ltd (ASX: AMA) has 7.7% of its shares held short, which is down week on week. This smash repair company's balance sheet is in a very precarious state.
- Temple & Webster Group Ltd (ASX: TPW) has seen its short interest ease to 7.6%. Traders appear to believe the housing market downturn and a return to offline shopping could mean this online retailer underperforms.
- Megaport Ltd (ASX: MP1) has seen its short interest fall again to 7.4%. Short sellers have been closing positions since this network as a service company released a very positive trading update and guidance.
