The 10 most shorted ASX stocks plus the biggest risers and fallers – Week 38

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 12 and 17 September 2024

• Month-on-month changes between 14 August and 17 September 2024

Most Shorted

Pilbara Minerals and IDP Education remain the two most shorted stocks on the market. The two stocks have retained the top spots since early February

MinRes' short interest has soared to 11.38%, up from 9.97% a week ago. Several factors contribute to the bearish sentiment, including ongoing weakness in iron ore and lithium prices, a high net debt position of $4.4 billion and continuing capex commitments. Some recent developments for MinRes include:

• Fitch revised the company's outlook to 'Negative' from 'Stable' on 9 September 2024. "The Outlook revision reflects a surge in leverage following a period of significant capex alongside falling lithium prices. EBITDA net leverage reached 4.9x in the financial year ended June 2024 (FY24), above our 2.2x forecast," says Fitch. ". We expect MinRes to delever from FY26 through capex discipline, cost improvements and rising cash generation at its Onslow iron ore project, but the Negative Outlook reflects the associated execution risks."

• MinRes hosted a sell-side call earlier this month, with management noting confidence in delivering $120 million in opex savings, no real motive to chase lithium volume at present and capex cut breakdown (40% across lithium, with the rest across iron ore and corporate)

Rising Shorts

Short interest in GDI Property Group has soared from around 0.7% at the beginning of the month to a record 2.87%. A few recent catalysts of interest include:

• Removal from S&P/ASX 300 Index. This was announced on 6 September and effective prior to the open on 23 September

• GDI shares rallied 6.5% following the release of its FY24 result on 26 August. While the result may have been better-than-feared, it reiterated some well-documented trends within the office REITs

• "The capital markets remain challenging. We appointed agents to assess demand for two non-core assets, but withdrew both campaigns due to a lack of buyer depth and demand," the company said in its results announcement

Domino's shares are trading around 5-year lows following a series of earnings downgrades and troubled businesses in France and Japan. "The issues in France and Japan remain a key headwind for Domino's over the near term, with the turnaround of these markets likely to take a couple of years. Network growth will likely remain muted over the medium term as management focuses on store profitability," Macquarie analysts said in a note last month.

Short interest has continued to tick higher across some of the market's largest uranium names including Boss Energy and Paladin Energy. Uranium prices have been relatively flat over the past two months, trading around US$79 a pound, the lowest since November 2023. Despite flat spot prices, uranium stocks have rallied in the past two days following two major announcements:

• Microsoft signed a historic deal with Constellation Energy to restart the mothballed Unit 1 reactor in Pennsylvania. The deal seeks to bring back 835 megawatts of energy to power Microsoft's AI business

• Major investment banks including Bank of America, BNP Paribas, Citi, Morgan Stanley and Goldman Sachs pledged to support the goal first set out at the COP28 climate negotiations last year to tripe the world's nuclear energy capacity by 2050

Most Covered

A relatively quiet week for short covering changes. A few themes of interest include:

• Technology One experienced a one day dip in short interest from 1.79% to 0.95% on 16-17 September. The stock has rallied strongly in pretty much every time frame, up 3.5% in the past month, 30.5% in the past three months and 58% in the past year

• Short sellers are covering a few reporting season winners including Ansell (FY24 margin and EPS beat, FY25 guidance in-line) and Guzman Y Gomez (FY24 result was well-ahead of prospectus guidance)