Short & Caught: Bets remain against travel sector

Travel sector the most shorted
Punts bet agains sports betting sector
Healthcare not so healthy with short sellers

In Short & Caught, Stockhead recaps the ASX stocks that are the most shorted and have had the greatest increase in short interest right now.

How does shorting work?

Shorting works by selling stocks you do not actually own in the hope of buying them back at a lower price. Investors are in effect betting they will fall.

Because shorting is restricted under Australian law, any substantial shorting of stocks is worth knowing about, even if you only trade long.

Stockhead has utilised the number of short positions as a percentage of total shares on issue. The most shorted ASX stocks all have 5.5 per cent or more.

Here are the top 30 most shorted ASX stocks

Code	Company	Short positions	Shares on issue	% short positions
FLT	FLIGHT CENTRE TRAVEL ORDINARY	35,739,707	199,747,439	17.9%
BET	BETMAKERS TECH GROUP ORDINARY	113,235,404	903,460,347	12.5%
NAN	NANOSONICS LIMITED ORDINARY	36,136,801	301,833,182	12.0%
WEB	WEBJET LIMITED ORDINARY	38,584,423	380,509,819	10.1%
EML	EML PAYMENTS LTD ORDINARY	35,619,292	373,460,316	9.5%
PNV	POLYNOVO LIMITED ORDINARY	57,796,782	661,688,044	8.7%
KGN	KOGAN.COM LTD ORDINARY	9,329,483	106,926,718	8.7%
Z1P	ZIP CO LTD. ORDINARY	57,638,473	669,055,804	8.6%
AMA	AMA GROUP LIMITED ORDINARY	84,979,297	1,022,435,377	8.3%
MSB	MESOBLAST LIMITED ORDINARY	51,504,050	650,454,551	7.9%
OBL	OMNI BRIDGEWAY LTD ORD US PROHIBITED	21,143,023	268,639,670	7.9%
RRL	REGIS RESOURCES ORDINARY	54,938,763	754,776,298	7.3%
APX	APPEN LIMITED ORDINARY	8,873,199	123,383,996	7.2%
PDN	PALADIN ENERGY LTD ORDINARY	191,009,636	2,679,167,890	7.1%
TYR	TYRO PAYMENTS ORDINARY	36,471,991	516,771,154	7.1%
PBH	POINTSBET HOLDINGS ORDINARY	18,047,456	264,868,212	6.8%
ING	INGHAMS GROUP ORDINARY	23,686,139	371,679,601	6.4%
TPW	TEMPLE & WEBSTER LTD ORDINARY	7,600,612	120,452,928	6.3%
CUV	CLINUVEL PHARMACEUTICALS	3,085,668	49,410,338	6.2%
IEL	IDP EDUCATION LTD ORDINARY	16,442,609	278,336,211	5.9%
NEA	NEARMAP LTD ORDINARY	27,938,037	498,956,560	5.6%
MFG	MAGELLAN FIN GRP LTD ORDINARY	9,326,363	185,713,004	5.0%
NHC	NEW HOPE CORPORATION ORDINARY	41,775,768	832,357,082	5.0%
CCX	CITY CHIC COLLECTIVE ORDINARY	11,564,056	231,920,086	5.0%
MP1	MEGAPORT LIMITED ORDINARY	7,828,434	157,949,016	5.0%
BRG	BREVILLE GROUP LTD ORDINARY	6,809,411	139,359,544	4.9%
ADH	ADAIRS LIMITED ORDINARY	8,327,012	170,889,856	4.9%
PME	PRO MEDICUS LIMITED ORDINARY	4,977,544	104,372,753	4.8%
RBL	REDBUBBLE LIMITED ORDINARY	13,111,572	275,920,223	4.8%

Punters bet against travel sector

The travel sector is the most shorted, while Flight Centre (ASX:FLT) remains the most shorted stock. Hard hit from the Covid-19 pandemic Flight Centre and the travel sector has been recovering as Australia’s borders started to re-open both domestically and internationally. But short sellers seem to think the market is being too optimistic on the travel industry recovery.

Short positions in Flight Centre is 17.9%, despite its share price increasing ~4.92% in the past month to be trading at $19.43.

There was also a 10.1% short position in Webjet (ASX:WEB), with the company seeing its share price dropping ~2.40% in the past month to $4.29.

Punters bet against sports betting sector

Short sellers were betting losses for the sports betting sector which came in as the second most shorted. Betmakers (ASX:BET) was the second most shorted stock with a short position of 12.5%.

Betmakers, which operates a platform model providing the back-end technology for bookmakers primarily in horse racing, has seen its share price has fallen ~51% in the past year to 56 cents.

Pointsbet (ASX:PBH) has been making ground in the US. The company took its first sports book bet in Pennsylvania in February, following authorisation by the state’s gaming body for a soft launch.

Philadelphia represents the company’s 10th online sportsbook operation in the US, following successful launches in New Jersey, Iowa, Indiana, Illinois, Colorado, Michigan, West Virginia, Virginia, and New York.

However, its share price has fallen ~76% in the past year to $3.16.

Healthcare not so healthy

The healthcare sector has been diagnosed as not too well among short sellers. With inflation rising and continued volatility on global markets the healthcare sector has been out of favour of late with investors looking towards more value sectors.

The S&P/ASX 200 index has fallen ~10% in the past year. Nanosonics (ASX:NAN), which has developed and commercialised the trophon EPR device, an automated disinfectant technology for ultrasound probes, saw ~12% of its stock shorted. The company has seen pressure on its stock after it making changes to its US sales model.

Among other health stocks targeted by shorter sellers was Clinuvel (ASX:CUV), despite it releasing positive preliminary results from its pilot study in arterial ischaemic stroke (AIS).

The trial, called CUV801, focused on the safety of multiple afamelanotide doses and patient recovery over 42 days, using the National Institutes of Health Stroke Scale and brain imaging.

Both companies have seen their share prices fall in the past year with Nanosonics down ~35.% to $3.86 and Clinuvel even further at ~42% to $17.22.

Payments, e-commerce, gold stocks among others shorted

Short sellers have also taken aim at payments, e-commerce, gold, automotive, uranium and tech stocks. EML Payments (ASX:EML) saw ~9.5% of its stock shorted, while Zip Co (ASX:ZIP) ~8.7%.

Crash repair company and auto parts provider AMA Group (ASX:AMA) has 8.3% of its shares held in a short position, while uranium explorer and miner Paladin Energy (ASX:PDN) has 7.1%.

The e-commerce stocks Kogan (ASX:KGN), City Chic Collective (ASX: CCX) and RedBubble (ASX:RBL) also attracted the attention of short sellers.

Gold stock Regis Resources (ASX:RRL) which has seen its share price drop ~31% in the past year has ~7.3% of its stock in a short position. The company has seen its share price recover slightly of late as gold prices go higher with market volatility.

Linen lovers to linen shorters for Adairs

Homewares and linen company Adairs (ASX:ADH) has also seen ~4.9% of its stock shorted. Adairs has made headlines in recent days for the wrong reasons, with owners of Mocka baby cots sold by the company instructed to check immediately for signs of mould.

The ACCC said in a Facebook post it had “received a number of reports of potentially dangerous mould growing on the base of some cots”.