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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) remains the most shorted ASX share with short interest of 14.4%, which is up slightly week on week. Short sellers have been adding to their positions since the release of a disappointing trading update.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise slightly to 13%. This betting technology company was quizzed by the ASX last week in relation to a $15 million payment to entrepreneur Matthew Tripp.
- Perpetual Limited (ASX: PPT) now has 11.7% of its shares held short, up slightly week on week. Short sellers have continued to increase their positions in this fund manager after it was pressured into completing its acquisition of Pendal Group Ltd (ASX: PDL).
- Megaport Ltd (ASX: MP1) has seen its short interest rise slightly to 10.6%. This network as a service operator's shares trade on sky high multiples. Short sellers appear to see scope for these multiples to narrow given the prospect of higher interest rates.
- Sayona Mining Ltd (ASX: SYA) has 9.5% of its shares held short, which is down slightly week on week. Concerns that lithium prices could have peaked appear to be weighing on this developer.
- Lake Resources N.L. (ASX: LKE) has short interest of 8.8%, which is up week on week. One short seller claims that Lake is having issues producing battery grade lithium at scale from its Kachi operation.
- Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 8.5%. Short sellers may be doubting this buy now pay later provider's ability to achieve profitability if a global recession causes a spike in bad debts. Its high debt could be another cause for concern.
- Nanosonics Ltd (ASX: NAN) has short interest of 8.4%, which is down week on week. The jury is out on this medical device company's sales model change in the key United States market.
- Breville Group Ltd (ASX: BRG) has seen its short interest slide again to 7.8%. Fears that spending on household goods could suffer in 2023 due to the cost of living crisis appear to be behind this short interest.
- Brainchip Holdings Ltd (ASX: BRN) has entered the top ten with 6.8% of its shares held short. Short sellers seem to believe that this semiconductor company is all show and no go. And with a $1.2 billion market capitalisation and less sales revenue than some cafes, it's no wonder short interest is creeping up.
