Every Monday I look at ASIC's short position report in order to find out which shares are being targeted by short sellers.
This is because I believe it is 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:
- Syrah Resources Ltd (ASX: SYR) is now the most shorted share on the ASX after its short interest spiked to 19.4% this week. Short sellers have been increasing their positions after a disappointing update, news that the graphite producer was being dumped out of the ASX 200 index, and a very dilutive capital raising.
- Inghams Group Ltd (ASX: ING) has experienced another increase in short interest to 16.9%. Short sellers appear to be targeting the poultry producer due to concerns that its full year results may fall short of expectations because of the impact of the droughts on its margins.
- Nufarm Limited (ASX: NUF) has seen its short interest surge week on week to 16.1%. The agricultural chemical company's shares have lost half of their value over the last 12 months due largely to the droughts. Short sellers appear to believe they can still go lower.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest slide again to 14.4%. It looks as though short sellers may be closing their positions and moving on from this one.
- NEXTDC Limited (ASX: NXT) has 14.4% of its shares held short, which is up notably since last week. It looks as though short sellers are targeting the data centre operator due to the sky-high multiples its shares trade on.
- Galaxy Resources Limited (ASX: GXY) has short interest of 14.3%, which is up strongly since last week. Weak lithium prices and a subdued outlook are attracting investors to the lithium miners.
- Orocobre Limited (ASX: ORE) has short interest of 13.7%, which is up materially week on week. Orocobre is another lithium miner which short sellers have targeted because of the collapse in lithium prices due to softening demand and increasing supply.
- Bellamy's Australia Ltd (ASX: BAL) has seen its short interest increase to 12.8%. Bellamy's shares have come under pressure due to facing extensive delays in gaining SAMR accreditation for its organic infant formula.
- BWX Ltd (ASX: BWX) has seen its short interest rise strongly to 12.5%. The personal care products company's shares have come under significant pressure in recent months due to the shocking underperformance of its key Sukin brand.
- Bingo Industries Ltd (ASX: BIN) has entered the top ten with short interest of 11.5%. A disappointing guidance downgrade earlier this year has weighed heavily on its shares and investor sentiment.
