The 10 most shorted ASX stocks plus the biggest risers and fallers – Week 4

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 6 and 13 January 2025

• Month-on-month changes between 20 December 2024 and 13 January 2025

Most Shorted

Key takeaways:

• Boss Energy and Paladin Energy remain the most shorted stocks on the market

• Domino's Pizza climbs to the #4 (up from #6 last week) most shorted stock. The company's shares have declined 1.1% over the past month and 49% over the last twelve months, facing multiple operational challenges. The latest note from Macquarie (5-Dec-24) noted risks including:

  • Franchisee profitability under pressure: The company has experienced a significant decline in franchisee profitability, with average EBITDA dropping from $163,000 (11.5% EBIT margin) in FY21 to $97,000 (7.3% margin)

  • Risk of fewer store openings. Macquarie analysts project store network growth may slow significantly to 0.2% annually from FY24 to FY27, considerably below market expectations of 2.4%, primarily due to weakening profitability metrics.

  • Downside risks to consensus EBIT. The slower store expansion is expected to impact future earnings, with Macquarie lowering their forecasts by 0.2% in FY25, 9.6% in FY2 and 13.5% in FY27.

Rising Shorts

Key takeaways:

• The Star faces mounting challenges after NSW Premier Chris Minns confirmed no tax relief would be offered to the troubled casino operator. The company's financial position has deteriorated significantly, with cash reserves falling to $79 million as of December 31, 2024, down from $149 million in September. While the company has accessed $100 million from its Tranche 1 debt facility, securing an additional $100 million in funding remains problematic given its current circumstances.

Most Covered

Key takeaways:

• Karoon Energy has seen a modest reduction in short interest, with its stock price rising approximately 21.5% over the past month, supported by soaring oil prices. Citi analysts note the company appears undervalued based on projected free cash flow yields averaging 29% over the next three calendar years. However, they caution that investor interest remains limited due to operational execution concerns and potential M&A activities complicating the investment narrative.