The 10 most shorted ASX stocks plus the biggest risers and fallers – Week 42

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 8 and 15 October 2024

• Month-on-month changes between 14 August and 15 October 2024

Most Shorted

Key takeaways:

• IDP Education has dropped to #3 after holding the #2 spot since early February

• Short sellers continue to target the uranium sector. Short interest in Boss Energy, Paladin Energy, Deep Yellow and Lotus Resources are all at or near record levels

• The short selling data is up to 15 October whereas the uranium sector surged on October 17, with Paladin Energy jumping 11%, following Amazon's US$500m investment announcement in small modular nuclear reactors. This move aligns with similar initiatives from tech giants Alphabet and Microsoft, who are developing nuclear capabilities for their data centers. The market awaits clarity on whether short sellers covered or increased their positions during this rally.

Rising Shorts

Key takeaways:

• Short interest in Corporate Travel is rising after downgrades from industry peers. Flight Centre's shares plunged 20.4% on October 17 after announcing minimal year-over-year growth in volumes, margins, and profit. Similarly, Web Travel Group's stock dropped 35% on October 14, downgrading its revenue margin guidance to 6.5% due to European market weakness – their second downgrade in six weeks from an initial 7.5% forecast. Short sellers may view Corporate Travel, which hasn't yet provided a trading update, as their next target.

• Despite surging gold prices, short sellers remain bearish on Bellevue Gold. The company's unexpected $150m capital raise in July, despite previous calls about being "fully funded". Their FY24 earnings revealed EBITDA of $113M, 19% below consensus due to elevated operating costs. While Bellevue maintains its FY25 guidance, the stock lags behind peers, though continued strength in gold prices could drive share price appreciation.

Most covered

Key takeaways:

• Appen's short interest has hit record lows amid a meteoric 360% rally since late July. The company is showing signs of recovery after losing Google as a major client earlier this year. But this rebound is taking place from rock bottom, after falling as much as 99% from August 2020 highs.

• Shorters are taking profit after the Web Travel Group selloff. Macquarie analysts said "it is difficult to determine the revenue margin floor; however long-term we expect pressure remains from: 1) a volume mix shift to lower margin regions; 2) investments by hotels into direct channels; 3) increasing volume rebates; and 4) the rise of exclusive contracts."