Short and Caught: Which uranium play is the most shorted ASX stock?

Boss Energy is the ASX’s most shorted stock with other uranium plays Paladin Energy and Deep Yellow also a target
Pilbara Minerals still heavily shorted, despite lithium prices showing signs of bottoming
Embattled casino operator Star Entertainment Group has short position of 7% as new mystery substantial shareholder emerges

Before we delve into the ASX’s most shorted, just a quick reminder right off the bat here about what short selling actually is.

Short sellers effectively borrow a stock from a broker, and go wager it (sell it) on the open market. The plan is to then buy the same stock back later after it’s made a hefty drop in price. That done, the short seller buys it back at the lower price and returns it to the lender.

The difference between the sell price and the buy price is the short seller’s profit. Investors are in effect making a bet that prices of a security will fall.

Because shorting is restricted under Australian law (and because it’s an all or nothing bloodsport) any substantial shorting of stocks is worth knowing about, even if you only trade long.

And perhaps there’s method in the madness.

Stockhead has utilised the number of short positions as a percentage (5% or more) of total shares on issue according to ASIC’s Short Position Report.

With resources stocks dominating the most ASX shorted stocks currently, Stockhead spoke to Katana Asset Management portfolio manager Romano Sala Tenna for his view on what is driving short sellers to the sector.

The most-shorted stocks on the ASX

Code	Company	Short positions	Shares on issue	% short positions
BOE	BOSS ENERGY LTD ORDINARY	72,138,504	409,688,058	18%
PDN	PALADIN ENERGY LTD ORDINARY	63,824,230	398,909,417	16%
PLS	PILBARA MINERALS LTD ORDINARY	429,702,371	3,012,408,870	14%
SYR	SYRAH RESOURCES ORDINARY	132,495,661	1,034,891,766	13%
MIN	MINERAL RESOURCES. ORDINARY	24,903,740	196,518,604	13%
DMP	DOMINO PIZZA ENTERPR ORDINARY	11,478,022	92,496,790	12%
IEL	IDP EDUCATION LTD ORDINARY	34,514,634	278,336,211	12%
KAR	KAROON ENERGY LTD ORDINARY	81,521,846	764,369,698	11%
DYL	DEEP YELLOW LIMITED ORDINARY	103,098,360	972,361,825	11%
MP1	MEGAPORT LIMITED ORDINARY	16,247,850	160,375,680	10%
LTR	LIONTOWN RESOURCES ORDINARY	235,997,370	2,426,609,244	10%
LYC	LYNAS RARE EARTHS ORDINARY	89,769,070	934,718,185	10%
ADT	ADRIATIC METALS CDI 1:1	25,293,027	277,725,096	9%
LIC	LIFESTYLE COMMUNIT. ORDINARY	10,954,698	121,740,054	9%
JLG	JOHNS LYNG GROUP ORDINARY	24,122,084	281,403,433	9%
GMD	GENESIS MINERALS ORDINARY	87,491,145	1,128,664,943	8%
CTD	CORP TRAVEL LIMITED ORDINARY	10,729,352	146,325,746	7%
CTT	CETTIRE ORDINARY	27,490,157	381,238,220	7%
SGR	THE STAR ENT GRP ORDINARY	206,530,408	2,868,680,877	7%
RIO	RIO TINTO LIMITED ORDINARY	25,607,033	371,216,214	7%
CUV	CLINUVEL PHARMACEUT. ORDINARY	3,368,324	50,060,680	7%
SEK	SEEK LIMITED ORDINARY	23,618,853	356,820,190	7%
SLX	SILEX SYSTEMS ORDINARY	15,612,521	237,482,774	7%
CHN	CHALICE MINING LTD ORDINARY	25,535,427	389,026,788	7%
AD8	AUDINATEGROUPLTD ORDINARY	5,374,987	83,342,014	6%
CIA	CHAMPION IRON LTD ORDINARY	32,329,669	518,251,001	6%
STX	STRIKE ENERGY LTD ORDINARY	178,376,634	2,865,373,749	6%
IMU	IMUGENE LIMITED ORDINARY	455,811,479	7,438,310,643	6%
EDV	ENDEAVOUR ORDINARY	107,152,289	1,790,980,017	6%
APE	EAGERS AUTOMOTIVE ORDINARY	14,937,049	258,074,137	6%
BGL	BELLEVUE GOLD LTD ORDINARY	72,974,292	1,279,998,987	6%
SFR	SANDFIRE RESOURCES ORDINARY	25,034,659	458,705,193	5%
NCK	NICK SCALI LIMITED ORDINARY	4,252,933	85,530,699	5%
SYA	SAYONA MINING LTD ORDINARY	562,644,914	11,543,296,014	5%
NHC	NEW HOPE CORPORATION ORDINARY	41,076,122	845,335,464	5%
DRO	DRONESHIELD LIMITED ORDINARY	42,021,790	872,115,159	5%
FLT	FLIGHT CENTRE TRAVEL ORDINARY	10,306,689	221,945,650	5%

Uranium stocks remain the target of short sellers with Boss Energy (ASX:BOE) still the most shorted stock on the ASX with a short position of 18%. Paladin Energy (ASX:PDN) is the second most shorted ASX stock with a short position of 15%, while Deep Yellow (ASX:DYL) has a short position of 11%.

Katana Asset Management portfolio manager Romano Sala Tenna told Stockhead the theme for uranium remained robust, believing the reason for Paladin and Boss being heavily shorted comes down to operational issues, lack of execution on projects and high valuations.

“Both have come out with disappointments in the last month or two and operationally are just not delivering,” he said.

“There’s some larger uranium stocks like NexGen Energy (ASX:NXG) which don’t feature prominently in the list, which says to me the uranium theme is in tact.

“It’s a bit weaker than investors expected but it’s really about those companies and the valuations are well ahead of where they should be and add to that the operational issues and you can see the reason why they have those short positions.”

Pilbara Minerals still a focus of short sellers

Lithium producer Pilbara Minerals (ASX:PLS) is the third most shorted stock with a short position of 14%.

In November Pilbara was the most shorted ASX stock with a short position of 17% before its short position fell to 12% in December.

Sala Tenna said the way that equity managers had in the past played the lithium price was through Pilbara as the largest dedicated lithium player on the ASX, but that was now starting to change.

“Since Pilbara’s big short positions were initiated what we have seen is the emergence of a primitive futures market for lithium now and prior to that there was no way to play that exposure,” he said.

“So investors can now use derivatives to take take a short position on lithium as opposed to stocks.”

However, Sala Tenna believes Pilbara is still chronically overpriced at current levels.

“The spot price of spodumene is US$825/tonne so we are seeing a slight recovery, but there is an enormous price recovery factored into the Pilbara share price,” he said.

“Everyone who has longed Pilbara at the moment has a very bullish view on the lithium price.”

Short on Mineral Resources ‘doesn’t make sense’

Diversified resources company Mineral Resources (ASX:MIN) has a short position of 13%.

Sala Tenna said 2024 was a tough year for the company faced with convergence of corporate government issues, weakening commodity prices – especially lithium and iron ore – and record debt levels as it built its largest project in history, the Onslow Iron project in Western Australia.

However, he said Mineral Resources is looking up in 2025.

“The short on minerals just doesn’t make sense,” Sala Tenna added.

“Banks and miners make up about 51% of the ASX 100 so you can’t be underweight both of those two sectors.

“Now at the moment you’d have to say that banks are priced to perfection so if you’re going to be putting underweight positions on banks you have to replace it with something and that’s where the resources stocks come into their own.”

Embattled Star Entertainment on short sellers list

Embattled casino operator Star Entertainment Group (ASX:SGR) has a short position of 7%. Star stunned the market last week with news that it only had $79 million left in cash after burning through $107 million in only three months.

The company’s share price fell heavily upon warning it may struggle to meet the terms of a $100 million loan. However, the company ‘s share price picked up at the start of this week on news a mystery Macau-based investor had emerged as a substantial shareholder.

According to a filing on January 14, Xingchun Wang now holds 6.52% of Star’s register. He has been quietly acquiring shares in Star since September 2024.

“For the last two to three years Star has be a very high risk proposition so you can understand the short position,” Sala Tenna said.

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

Disclosure: Katana Asset Management was a holder of Mineral Resources at the time of writing this article.