Short and Caught: The ASX stocks investors are shorting right now
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Short & Caught is Stockhead’s fortnightly recap of which ASX small cap stocks are heavily shorted. Stocks that are shorted have investors betting that they fall.
Shorting works by selling stocks you do not actually own in the hope of buying them back at a lower price.
Because shorting is restricted under Australian law, any substantial shorting of stocks is worth knowing about even if you own these stocks and only trade long.
Stockhead’s two preferred metrics are raw short interest as well as percentage changes in them within the last month.
Graphite miner Syrah Resources (ASX:SYR) and lithium miner Galaxy Resources (ASX:GXY) swapped places as the first and second most shorted ASX small caps.
There was movement immediately below these stocks. Most notably, Carnarvon Petroleum (ASX:CVN) is now in 4th spot with nearly $54m worth of short interest against it.
Robot home builder FBR (ASX:FBR) has now been shorted to the tune of $11.7m – more than double a month ago after its latest capital raise.
Other beaten up stocks that continued to be shorted were Botanix Pharmaceuticals (ASX:BOT), which has not recovered from a poor clinical trial on its anti-acne cream, and satellite builder Speedcast (ASX:SDA).
Prior to its revenue downgrades, Speedcast was an ASX200 company.
While the number of stocks with over $6m in short interest have grown slowly over time, the short interest against Paringa Resources (ASX:PNL) shot up 5.4 million per cent in the last month to $6m.
The Kentucky-focused coal miner has begun sales of its coal, making $US5.7 million in revenue but has needed to raise finance multiple times in recent months.
Child-tracking app Life360 (ASX:360) is another stock with recent shorting pressure. Having lost 43 per cent since its early-May IPO, it is one of the few flops in the IPO market in 2019.
One stock on this list that has done well in 2019 is Stavely Minerals (ASX:SVY). The Victoria-focused copper explorer became a five-bagger off the back of a 40 per cent copper hit. But it is a new target for shorters, having just fallen below $1.
Prospa (ASX:PGL) has also been targeted following a hefty profit downgrade last month.