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These are the 10 most shorted ASX shares

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Sad man sitting at desk and grabbing his head as he looks at a laptop.

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

  • DroneShield Ltd (ASX: DRO) remains the most shorted ASX share despite its short interest easing from 15.2% to 14.5%. Short sellers may still be concerned about the ASIC investigation into the counter-drone technology company’s previous market disclosures and share trading.
  • Lotus Resources Ltd (ASX: LOT) has seen its short interest climb from 13.3% to 14%. The uranium producer is working towards steady-state production at Kayelekera, but short sellers may be questioning how quickly it can achieve its targets and at what cost.
  • Boss Energy Ltd (ASX: BOE) has short interest of 13.1%, which is largely unchanged week on week. Boss recently revised its long-term development plan for Honeymoon, and short sellers may be sceptical about the production and cost assumptions underpinning its outlook.
  • PLS Group Ltd (ASX: PLS) has moved higher up the table, with 12.8% of its shares held short. Despite improving lithium market conditions, short sellers could be betting that the recovery in prices will be difficult to sustain.
  • Zip Co Ltd (ASX: ZIP) has seen its short interest ease slightly to 12.6%. Short sellers may still be concerned that elevated interest rates could put pressure on the buy now pay later company’s customers and funding costs, potentially weighing on growth and profitability.
  • IperionX Ltd (ASX: IPX) has short interest of 12.5%, down from 12.8%. The titanium producer continues to make technological progress, but short sellers may believe commercial-scale production and the earnings needed to justify its valuation remain some way off.
  • Domino’s Pizza Enterprises Ltd (ASX: DMP) has 11.7% of its shares held short, down slightly week on week. Although its restructuring has improved franchisee profitability and cash flow, short sellers appear to doubt whether sales can recover quickly enough to support a sustained earnings turnaround.
  • Lynas Rare Earths Ltd (ASX: LYC) has returned to the top ten with short interest of 11.5%. This could reflect concerns over the cost and execution risks associated with its proposed acquisition of Meteoric Resources and the development of its Caldeira rare earths project in Brazil.
  • Paladin Energy Ltd (ASX: PDN) has seen its short interest increase from 11% to 11.5%. With the production ramp-up at Langer Heinrich completed, short sellers may now be focusing on uranium price expectations and the costs associated with its future growth projects.
  • 4DMedical Ltd (ASX: 4DX) has slipped to tenth place after its short interest fell from 11.9% to 11.1%. Despite increasing commercial adoption of its lung imaging technology, short sellers may believe its valuation is difficult to justify given its relatively modest revenue base.

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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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