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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 with short interest of 11.2%, which is up week on week. There are concerns that revenue margins could weigh on its performance.
- Core Lithium Ltd (ASX: CXO) has short interest of 9.7%, which is down slightly week on week. This is likely to have been driven by valuation concerns and fears that lithium prices are going to start falling again.
- Lake Resources N.L. (ASX: LKE) has 8.9% of its shares in the hands of short sellers, which is down slightly since last week. Many analysts believe lithium prices are about to start falling again.
- Megaport Ltd (ASX: MP1) has short interest of 8.4%, which is up week on week. Short sellers seem to believe that the market is too optimistic on this network as a service operator's outlook.
- IDP Education Ltd (ASX: IEL) has jumped into the top ten with 8.3% of its shares held short. The loss of the language testing company's monopoly in Canada is likely to have something to do with this.
- AMA Group Ltd (ASX: AMA) has seen its short interest ease to 7.8%. This crash repair company's balance sheet is in a terrible state.
- Temple & Webster Group Ltd (ASX: TPW) has 7.7% of its shares in the hands of short sellers, which is up slightly week on week. Short sellers don't appear to believe this online furniture retailer's improving sales will last in the current economic environment.
- Breville Group Ltd (ASX: BRG) has 7.4% of its shares held short, which is down slightly since last week. Short sellers may feel that the cost of living crisis could impact demand for its appliances.
- Select Harvests Ltd (ASX: SHV) has short interest of 7.3%, which is down since last week. A reasonably upbeat forecast from this almond producer after a difficult period may have led to short sellers closing positions.
- Pilbara Minerals Ltd (ASX: PLS) has entered the top ten with short interest of 7.3%. Once again, this may be due to concerns that lithium prices are about to tumble.
