These are the 10 most shorted ASX shares

Once a week, I like to look at ASIC’s short position report to find out which ASX shares are being targeted by short sellers.

That’s 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, listed below are the 10 most shorted shares on the ASX this week according to ASIC.

The top 10 most shorted ASX shares

• Lotus Resources Ltd (ASX: LOT) has moved back to the top of the table with short interest of 15.9%, up from 15% last week. Short sellers may still have doubts over the uranium developer’s path to production and whether stronger uranium demand will arrive quickly enough to support its plans.
• DroneShield Ltd (ASX: DRO) has short interest of 15.4%, which is broadly unchanged week on week. The counter-drone technology company remains a favourite with short sellers, possibly due to its valuation and uncertainty surrounding the ASIC investigation.
• 4DMedical Ltd (ASX: 4DX) has seen its short interest ease to 12.2%. Its valuation remains very high relative to its current revenue base, which appears to be keeping short sellers interested despite its significant commercial potential.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) has short interest of 11.8%, which is down again week on week. Short sellers may still need convincing that its restructuring efforts can deliver the earnings recovery investors are hoping for.
• Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest ease slightly to 11.7%. Weakness in luxury wine demand and uncertainty around the pace of improvement in the Americas could be keeping short sellers interested.
• Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 11.6%. The buy now pay later company’s strong recovery may have prompted some short sellers to question whether its valuation now leaves enough room for disappointment.
• PLS Group Ltd (ASX: PLS) has 11.2% of its shares held short, which is up slightly week on week. Short sellers may be betting that the lithium market remains difficult for longer, delaying a meaningful recovery in margins and cash flow.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 11.1%. This may reflect concerns over the strength of consumer travel spending and how quickly the company can improve margins.
• Paladin Energy Ltd (ASX: PDN) has short interest of 11%, which is up from 10.7% last week. Short sellers may remain cautious over production expectations and whether the uranium price can stay strong enough to support the current outlook.
• IperionX Ltd (ASX: IPX) has entered the top ten with short interest of 10.6%. Short sellers may be questioning the company’s valuation and the execution required as it works to scale up its US titanium operations.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.