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.
While short sellers don't always get it right, there have been a number of high profile success stories over the last 12 months.
In light of this, I think it is well worth keeping a close eye on short interest levels. These are the 10 most shorted shares on the ASX this week:
- Syrah Resources Ltd (ASX: SYR) continues its long run as the most shorted share on the Australian share market with 21.1% of its shares now held short. Short sellers appear concerned with Syrah's graphite production and the prices it is commanding.
- JB Hi-Fi Limited (ASX: JBH) has edged a little closer to Syrah with another increase in short interest. It now stands at 18.3%. The embattled retailer is already suffering from heightened competition and will have to contend with the Amazon Prime Day event on Monday.
- Domino's Pizza Enterprises Ltd (ASX: DMP) has seen its short interest ease week-on-week to 15.1%. Opinion remains divided on the pizza chain operator's prospects and its ability to achieve guidance this year. It certainly will be one to watch in the up coming earnings season.
- Galaxy Resources Limited (ASX: GXY) has 14.4% of its shares held short this week, down slightly week-on-week. This interest could continue to decline this week after lithium bear Morgan Stanley was revealed to be a major shareholder.
- Orocobre Limited (ASX: ORE) has seen its short interest rise week-on-week again to 13.4%. Short sellers may be targeting Orocobre due concerns that it could fall short of its production guidance.
- Myer Holdings Ltd (ASX: MYR) has seen its short interest rise slightly to 12.2%. Despite its severe share price decline, short sellers appear to believe things can get worse for the struggling department store operator.
- Vocus Group Ltd (ASX: VOC) has seen its short interest slide again to 12.1%. With the telco company's shares down 31% since this time last year, some short sellers may be locking in gains ahead of earnings season.
- Inghams Group Ltd (ASX: ING) has burst into the top ten with short interest of 11.9%. The exit of its CEO and bearish broker notes appear to have weighed on investor sentiment. Last week UBS downgraded the poultry company's shares to a sell rating with a $3.40 price target.
- Metcash Limited (ASX: MTS) has seen its short interest rise again to 11.5%. The expected loss of the Drakes SA supply contract continues to weigh on its shares.
- Australian Agricultural Company Ltd (ASX: AAC) has 11.3% of its shares held short, down slightly week-on-week once again. The agribusiness company's shares have been a strong performer this month despite the high level of short interest, rising over 12%.
