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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:
- Pilbara Minerals Ltd (ASX: PLS) continues its very long run as the most shorted ASX share after its short interest increased to 21.3%. With lithium supply expected to outstrip demand for several years, short sellers appear to believe that lithium prices will remain low and squeeze the miner's profits.
- IDP Education Ltd (ASX: IEL) has 14.7% of its shares held short, which is down slightly week on week. Investors have been selling this student placement and language testing company's shares in recent months due to concerns over regulatory changes to student visas and the loss of its testing monopoly in Canada.
- Syrah Resources Ltd (ASX: SYR) has a short interest of 13.5%, which is down slightly week on week. This graphite miner's operations are currently on and off as the company battles weak graphite prices.
- Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest increase to 11.1%. Short sellers could be going after the travel agent due to concerns over revenue margin headwinds and consumer spending pressures.
- Liontown Resources Ltd (ASX: LTR) has seen its short interest ease slightly to 10.1%. Short sellers have been targeting the Kathleen Valley Lithium Project owner due to falling lithium prices.
- Core Lithium Ltd (ASX: CXO) has a short interest of 8.3%, which is flat week on week. This is yet another lithium miner that short sellers are targeting. They certainly have done well with this one. Core Lithium's shares are down over 80% since this time last year.
- Bank of Queensland Ltd (ASX: BOQ) is back in the top ten with a short interest of 8%. Short sellers will have been disappointed to see the regional bank's shares storm higher last week following the release of its half-year update.
- Sayona Mining Ltd (ASX: SYA) has a short interest of 7.4%, which is up week on week. This is yet another lithium miner that short sellers have successfully targeted. Its shares are also down over 80% since this time last year.
- Lifestyle Communities Ltd (ASX: LIC) has short interest of 7.4%, which is up slightly week on week. Short sellers appear to have noticed that this retirement communities developer has been struggling with subdued settlement rates.
- Weebit Nano Ltd (ASX: WBT) has 7.4% of its shares held short, which is up week on week. Valuation concerns appear to be the reason why short sellers are targeting this semiconductor company.
