The 10 most shorted ASX stocks plus the biggest risers and fallers – Week 2

Welcome back to the Short Seller Series – A recap of the most heavily shorted stocks on the ASX and those experiencing significant changes to short interest over the past week.

Short selling data is four days behind today's date because reporting is not mandatory until three business days after the trade. The tables below will compare:

• Week-on-week changes between 20 and 27 December 2024

• Month-on-month changes between 19 November and 27 December 2024

Most Shorted

Key takeaways:

• Boss Energy has overtaken Paladin Energy as the market's most shorted stock amid ongoing pressure on the uranium sector. Uranium prices slumped 10% between 1-26 December, touching a one-year low of US$70/lb before recovering to US$75/lb by year-end. While the long-term outlook for uranium and nuclear energy demand remains strong, the sector faces near-term headwinds including production challenges (as evidenced by Paladin's FY25 guidance downgrade) and a disconnect between price expectations and current spot prices.

• Short selling activity remained subdued during the holiday period, with Paladin Energy being the notable exception as its short interest declined significantly.

Rising Shorts

Key takeaways:

• REITs Mirvac and Dexus saw their short interest climb following weak December performances, dropping 11% and 5.9% respectively. According to Morgan Stanley, Dexus ranks as the second most sensitive stock to Australian 10-year bond yields, suggesting that falling yields typically drive multiple expansion. However, bond yields rose markedly last month, with US 10-year and Australian 10-year yields climbing 39 bps and 5 bps respectively, driven by the Federal Reserve's reduced rate cut expectations for 2025 and robust economic data from both Australia and the US.

Most covered

Key takeaways:

• Paladin Energy completed its acquisition of Fission Uranium Corp on Tuesday, 24 December 2024. The merged entity's ownership structure sees existing Paladin shareholders holding approximately 76% and Fission shareholders controlling 24%. Citi analysts integrated the acquisition into their models last month, resulting in:

  • Target price up from $11.50 to $13.50

  • EBITDA down 2-5% across the forecast period due to additional corporate costs from the acquisition

  • EPS down an average 25% between FY25-27 due to ~95 million additional shares Paladin will use to acquire Fission

  • Paladin is forecast to raise US$200 million of debt in FY28-29 to fund the Patterson Lake South Project

  • "Wee see value here with Paladin now trading on ~0.6x price-to-NPV on our bullish U3O8 price deck of US$115/lb from 2027."

• Brainchip shares surged unexpectedly by almost 80% between 23 December and 2 January without any market-sensitive announcements. The dramatic price movement triggered an ASX price query on 27 December, to which the company responded that it was not aware of any undisclosed information that could explain the rally.