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Can the charts of ASX bank stocks ANZ, Commonwealth Bank, NAB and Westpac keep rising?
Mon 09 Dec 24, 12:53pm (AEDT)
Short Selling
Which ASX stocks are shorters targeting and covering — Week 35
By
Kerry Sun
Wed 30 Aug 23, 12:59pm (AEDT)
Source: Shutterstock
Stocks in article
Key Points
- Core Lithium experienced a sizable pullback in short interest after the company announced a $100 million placement at a steep discount. This suggests that some short sellers may be taking profits or covering their positions
- Elders climbed to #3 from #9 on the list of most shorted stocks after the company downgraded its FY2023 guidance. This suggests that some short sellers are betting on the stock to continue to decline
- Iress experienced a massive spike in short interest on the day of its 1H23 results, which were below expectations
Welcome back to the Short Seller Series, where we recap the most shorted stocks on the ASX, along with those experiencing a notable rise and fall in 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 table below compares short interest changes from 16 to 24 August.
Most shorted stocks
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Flight Centre | 10.39% | 10.29% | 0.10% | |
Syrah Resources | 9.20% | 8.93% | 0.27% | |
Elders | 8.82% | 7.62% | 1.20% | |
Pilbara Minerals | 8.79% | 8.30% | 0.49% | |
Lake Resources | 8.62% | 8.25% | 0.37% | |
Idp Education | 8.60% | 9.04% | -0.44% | |
JB Hi-Fi | 8.47% | 8.31% | 0.16% | |
Brainchip | 8.00% | 7.67% | 0.33% | |
Imugene | 7.72% | 7.07% | 0.65% | |
Core Lithium | 7.46% | 10.77% | -3.31% |
What’s changed
Core Lithium experienced a sizable pullback in short interest – It was the most shorted stock on the ASX last week. This follows an unexpected $100 million placement on 17 August, conducted at a steep 26.6% discount to its pre-raise close. Shorts may be unwinding and taking profits here as the stock is down almost 40% in the past month and down more than 60% year-to-date.
Elders climbs to #3 from #9 a week ago. The agribusiness provided an FY23 guidance update on 21 August, which downgraded EBIT expectations to $165-175m from $180-200m. Once viewed as a cheap defensive play, the stock is down 35% year-to-date.
The rest of the list remains relatively unchanged
Where are shorts covering?
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Core Lithium | 7.46% | 10.77% | -3.31% | |
Nanosonics | 2.48% | 3.73% | -1.25% | |
Megaport | 1.50% | 2.48% | -0.98% | |
The Star Entertainment | 1.58% | 2.47% | -0.89% | |
Ioneer | 3.69% | 4.46% | -0.77% | |
Breville Group | 6.06% | 6.76% | -0.70% | |
AMA Group | 6.30% | 6.91% | -0.61% | |
Novonix | 5.45% | 6.02% | -0.57% |
Interesting movers
Core Lithium shorts unwinding after the stock copped a massive beating
Nanosonics shares fell as much as 15% post earnings (22-23 August). Short interest was not very high to begin with, but appear to be unwinding as well
Megaport short interest is approaching sub 1% as the stock continues to rip higher, up 11% in the past month and 87% year-to-date
The Star Entertainment shorts unwind a little, ahead of its FY23 results (since the short data is up to 24 August and the results were due on 29 August)
Where are shorters going?
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Iress | 3.18% | 1.50% | 1.68% | |
St Barbara | 2.93% | 1.35% | 1.58% | |
Australian Clinical Labs | 6.88% | 5.59% | 1.29% | |
Elders | 8.82% | 7.62% | 1.20% | |
Imugene | 7.72% | 7.07% | 0.65% | |
Vulcan Energy | 4.71% | 4.12% | 0.59% | |
Genesis Minerals | 2.34% | 1.77% | 0.57% | |
Ramelius Resources | 2.02% | 1.46% | 0.56% | |
Lifestyle Communities | 5.61% | 5.07% | 0.54% | |
Jervois Global | 3.85% | 3.33% | 0.52% | |
ARB Corporation | 6.06% | 5.56% | 0.50% | |
Pilbara Minerals | 8.79% | 8.30% | 0.49% | |
Credit Corp Group | 5.39% | 4.91% | 0.48% | |
ASX | 2.24% | 1.76% | 0.48% |
Key themes and takeaways:
Iress experienced a massive spike in short interest on the day of its 1H23 results (Monday, 21 August). The stock finished the session 35.5% lower due to factors including:
Dividend suspension: “Iress has made the prudent decision to suspend its interim dividend and reduce debt at a time when it is incurring high one-off costs from the Company’s transformation plan.”
Softening revenue growth and cost pressures building in the second half of 2023
Underlying EBITDA guidance lowered to be broadly flat half-on-half
Are shorters betting on more pain ahead for the financial services software provider?
An Iress-like scenario has played out for a few stocks on the list (weaker-than-expected announcement, share price slump and spike in short interest) including:
Australian Clinical Labs: Down 12% on Monday, 21 August
Pilbara Minerals: Down 8% on Friday 25 August after capex guidance came out much higher than expected
ASX: Down 1.9% on 17 August after softer-than-expected FY23 earnings and higher-than-expected costs
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Can the charts of ASX bank stocks ANZ, Commonwealth Bank, NAB and Westpac keep rising?
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