Every Monday I like to 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:
- Galaxy Resources Limited (ASX: GXY) continues to be the most shorted share on the ASX with short interest of 18.4%. This was a sharp week on week increase, which may be an indication that short sellers don't believe the worst is over for this lithium miner.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rise to 16.9%. This graphite producer continues to be targeted by short sellers because of a sustained decline in prices due to oversupply concerns.
- Orocobre Limited (ASX: ORE) has seen its short interest edge lower to 13.7%. This lithium miner's shares have been strong performers in 2020, but short sellers aren't giving up just yet.
- Speedcast International Ltd (ASX: SDA) has short interest of 13%, which is up slightly week on week. It appears as though short sellers are expecting another disappointing result from this communications satellite technology provider next month.
- Inghams Group Ltd (ASX: ING) has short interest of 12.1%, which is down week on week once again. Concerns over rising feed costs due to the droughts and bushfires are weighing on this poultry producer's shares.
- Nearmap Ltd (ASX: NEA) has seen its short interest remain flat at 12.1%. Short sellers may believe that growing competition and softening margins could slow its growth in the coming years.
- GWA Group Ltd (ASX: GWA) has short interest of 11.9%, which is flat week on week. This building products company's shares have come under pressure since it warned that trading conditions would be tough in FY 2020.
- NEXTDC Limited (ASX: NXT) has 11.5% of its shares held short, which is down week on week. Despite this high level of short interest, last week NEXTDC's shares hit a 52-week high.
- JB Hi-Fi Limited (ASX: JBH) has seen its short interest tumble to 11.2%. Short sellers may be going after the retailer due to the belief that it could be in a structural decline due to the rise of online shopping.
- Costa Group Holdings Ltd (ASX: CGC) has seen its short interest edge slightly lower to 11.1%. Costa continues to be a target of short sellers following its countless earnings downgrades following tough trading conditions in 2019.
