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.
Galaxy Resources (ASX:GXY) and Syrah Resources (ASX:SYR) are still the two most shorted stocks as the markets for their commodities (lithium and graphite) remain flat. While Syrah’s short interest moved little, Galaxy’s rose by 11 per cent.
Moving up the list is Queensland-based zinc producer New Century Resources (ASX:NCZ) which is now the 6th most shorted and has $53m in short interest. Despite meeting its operational targets, zinc prices fell 9 per cent last year.
Infant formula exporter Bubs Australia (ASX:BUB) also rose up the list to over $25m, a 50 per cent rise in the last month.
Other stocks that have been shorted for a while but made big climbs up the list include medical software technology company ImpediMed (ASX:IPD) and water treatment stock Phoslock Environmental Technology (ASX:PET).
Down nearly 90 per cent in the last 12 months, Canada-focused oil and gas explorer Calima Energy (ASX:CE1) is a new target of shorters.
It has a project plan but is yet to make a final investment decision — it is looking for financing and a joint venture partner. The company admitted in its most recent quarterly that current low gas prices did not help.
Construction and engineering firm Decmil Group (ASX:DCG) is another target of shorters, more than halving in the last month after a not-so-great update two days before Christmas.
Women’s fashion retailer Mosaic Brands (ASX:MOZ) saw its sales drop over the summer as a result of the bushfires and it’s been a shorters’ target since.