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.
A couple of stocks rose up the list including Southern Cross Media (ASX:SXL) which has $49 million in short interest – up 259 per cent from a month ago; and Bubs Australia (ASX:BUB) which has $30.2 million – up 23 per cent from a month ago.
Southern Cross has had a horror 12 months falling 86 per cent and in recent weeks had to raise fresh capital. As a radio station owner it makes money through advertising revenues and it anticipates a drop of up to 30 per cent in the coming months.
Bubs, on the other hand, has told shareholders its infant formula has continued to sell well domestically and in China.
Retailer Myer (ASX:MYR) surpassed $100 million in short interest as it prepares to reopen its stores after a 6 week shutdown.
Now Syrah has only $24 million and just makes the top 20. Galaxy remains higher with $56 million but it has shed 22 per cent in the last month.
Stocks with exposure to oil prices have also witnessed easing of short interest against them.