Short & Caught: Flight Centre still hitting turbulence with short sellers

Short sellers are still banking on turbulence ahead for Flight Centre, which remains the ASX’s most shorted stock
Several ASX lithium stocks continue to be targeted by short sellers despite uptick in commodity price
The platform providing back end tech to bookies Betmakers sees its short position more than halve to 5%

How does shorting work?

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 betting they 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 of total shares on issue. The most ASX shorted stocks (excluding CDIs) all have 5% or more.

The most shorted stocks on ASX

Swipe or scroll to reveal full table. Click headings to sort:

Code	Company	Short positions	Shares on issue	% short positions
FLT	FLIGHT CENTRE TRAVEL ORDINARY	22,613,543	218,075,660	10%
CXO	CORE LITHIUM ORDINARY	184,266,674	1,858,516,794	10%
IEL	IDP EDUCATION LTD ORDINARY	26,139,887	278,336,211	9%
JBH	JB HI-FI LIMITED ORDINARY	8,933,753	109,333,981	8%
AMA	AMA GROUP LIMITED ORDINARY	85,661,334	1,073,070,217	8%
LLC	LENDLEASE GROUP FPO/UNITS STAPLED	54,440,313	689,322,065	8%
SHV	SELECT HARVESTS ORDINARY	9,329,710	121,058,664	8%
TPW	TEMPLE & WEBSTER LTD ORDINARY	9,202,884	122,949,702	7%
BRN	BRAINCHIP LTD ORDINARY	131,834,862	1,767,058,145	7%
SYR	SYRAH RESOURCES ORDINARY	48,216,798	675,897,730	7%
BRG	BREVILLE GROUP LTD ORDINARY	9,913,801	142,781,365	7%
DMP	DOMINO PIZZA ENTERPR ORDINARY	5,786,836	89,090,402	6%
LKE	LAKE RESOURCES ORDINARY	89,792,720	1,422,444,707	6%
ACL	AU CLINICAL LABS ORDINARY	12,646,350	201,834,015	6%
NVX	NOVONIX LIMITED ORDINARY	30,153,727	486,882,930	6%
OBL	OMNI BRIDGEWAY LTD ORD US PROHIBITED	17,204,424	278,852,475	6%
DOW	DOWNER EDI LIMITED ORDINARY	41,187,928	671,573,679	6%
PLS	PILBARA MIN LTD ORDINARY	183,403,630	2,998,013,519	6%
IMU	IMUGENE LIMITED ORDINARY	387,973,534	6,423,039,111	6%
ARB	ARB CORPORATION. ORDINARY	4,792,931	81,971,722	6%
HVN	HARVEY NORMAN ORDINARY	72,758,854	1,246,006,654	6%
29M	29METALSLIMITED ORDINARY	28,103,924	482,052,092	6%
BOQ	BANK OF QUEENSLAND. ORDINARY	37,080,335	652,485,010	6%
SGM	SIMS LIMITED ORDINARY	10,727,419	193,176,390	6%
AWC	ALUMINA LIMITED ORDINARY	160,176,782	2,901,681,417	6%
MP1	MEGAPORT LIMITED ORDINARY	8,706,875	158,678,412	5%
ELD	ELDERS LIMITED ORDINARY	8,463,220	156,476,574	5%
EML	EML PAYMENTS LTD ORDINARY	19,774,010	373,984,129	5%
WBT	WEEBIT NANO LTD ORDINARY	9,697,063	187,318,680	5%
CCP	CREDIT CORP GROUP ORDINARY	3,465,575	68,066,856	5%
APX	APPEN LIMITED ORDINARY	7,959,557	156,653,558	5%
WEB	WEBJET LIMITED ORDINARY	19,361,331	382,721,484	5%
JRV	JERVOIS GLOBAL LTD ORDINARY	103,057,126	2,079,820,066	5%
ZIP	ZIP CO LTD.. ORDINARY	40,196,583	824,646,536	5%
BBN	BABY BUNTING GRP LTD ORDINARY	6,434,373	134,906,489	5%
BET	BETMAKERS TECH GROUP ORDINARY	44,918,203	943,541,600	5%
DHG	DOMAIN HOLDINGS AUS ORDINARY	29,952,727	631,657,153	5%
LYC	LYNAS RARE EARTHS ORDINARY	44,154,777	933,815,477	5%
SYA	SAYONA MINING LTD ORDINARY	427,906,918	9,098,753,133	5%
INA	INGENIA GROUP FPO/UNITS STAPLED	18,961,812	407,583,264	5%
DYL	DEEP YELLOW LIMITED ORDINARY	34,172,366	757,743,572	5%
MSB	MESOBLAST LIMITED ORDINARY	36,600,066	814,204,825	4%
ABB	AUSSIE BROADBAND ORDINARY	10,638,992	237,682,509	4%
PDN	PALADIN ENERGY LTD ORDINARY	128,273,622	2,981,128,947	4%
LIC	LIFESTYLE COMMUNIT. ORDINARY	4,432,930	104,545,131	4%
BLD	BORAL LIMITED. ORDINARY	46,488,232	1,103,088,419	4%
NAN	NANOSONICS LIMITED ORDINARY	12,484,672	302,174,713	4%
BGA	BEGA CHEESE LTD ORDINARY	12,492,102	304,247,980	4%
A2M	THE A2 MILK COMPANY ORDINARY	29,390,964	721,976,214	4%
INR	IONEER LTD ORDINARY	83,344,057	2,098,818,267	4%
NIC	NICKEL INDUSTRIES ORDINARY	116,834,490	3,024,257,273	4%
GUD	G.U.D. HOLDINGS ORDINARY	5,433,914	140,894,696	4%
BOE	BOSS ENERGY LTD ORDINARY	13,558,873	352,578,862	4%
SUL	SUPER RET REP LTD ORDINARY	8,652,460	225,826,500	4%
NHC	NEW HOPE CORPORATION ORDINARY	33,685,949	882,269,477	4%
MFG	MAGELLAN FIN GRP LTD ORDINARY	6,814,260	181,431,899	4%
NEC	NINE ENTERTAINMENT ORDINARY	62,516,211	1,705,393,253	4%
SGR	THE STAR ENT GRP ORDINARY	59,025,069	1,618,680,877	4%
PBH	POINTSBET HOLDINGS ORDINARY	11,111,921	311,609,766	4%
BGL	BELLEVUE GOLD LTD ORDINARY	40,246,930	1,130,179,529	4%
MTS	METCASH LIMITED ORDINARY	34,107,416	965,541,602	4%
CXL	CALIX LIMITED ORDINARY	6,366,482	181,086,220	4%

Flight Centre’s turbulent trip with short sellers

It seems Flight Centre (ASX:FLT) just can’t catch a break with short sellers, with the travel stock remaining the most shorted ASX stock.

However, FLT’s short position has dropped marginally from 11% in June to 10% in July. The FLT share price has risen more than 40% YTD as the company said it is continuing to recover from the Covid-19 travel disruptions.

In its June Investor Strategy Session FLT said it was targeting $270-290 million underlying EBITDA for FY23 including contribution from the recent Scott Dunn acquisition, compared to an underlying $183.1 million FY22 loss.

“Demand is rebounding, trading conditions gradually starting to normalise (although airfares remain well above pre-Covid levels), no obvious signs of slowdown flowing from macro-economic changes,” FLT said in the presentation.

“Global corporate business outpacing industry recovery – delivering record TTV during FY23 despite client activity only tracking at 70-80% of pre-COVID levels.”

FLT said the leisure sector recovery gained momentum during a seasonally busier H2 FY23.

“Australian leisure TTV tracking broadly in line with pre-Covid levels in May 2023,” FLT said.

The FLT share price today:

Short-sellers cut punts against Betmakers

Betmakers Technology Group (ASX:BET) has caught a break with short-sellers and has seen its short position over the month more than halve from 13% in June as the second most shorted stock on the ASX to 5% in July.

BET operates a platform model providing the back-end technology for bookmakers, primarily in horse racing.

The BET share price has risen 18% in the past month after it provided an update on a strategic operational restructure as it works to cut costs and accelerate its path to profitability.

The company said it will cut more than 100 jobs but the reduction in costs will be primarily driven by restructuring global operations and technology.

“BetMakers is committed to providing long-term value to shareholders and this restructuring is an essential step towards achieving that goal,” CEO Jake Henson said.

“The changes made aim to provide the business with a clear path to profitability while also providing a more streamlined operating structure to maximise future growth opportunities.”

The BET Share price today:

Lithium & resource stocks still target of short-sellers

Resource stocks across sectors including lithium, battery metals, coal, nickel and REEs are in the sights of short-sellers.

Lithium stocks Core Lithium (ASX:CXO), Lake Resources (ASX:LKE), Pilbara Minerals (ASX:PLS) and Sayona Mining (ASX:SYA) are all on the list of the most shorted ASX stocks.

There’s a lot going on in the lithium sector. Lithium prices have fallen from the heights seen in 2022 but are coming back in vogue.

However, analysts are mixed about what lithium prices will do with some forecasting EV growth will continue to drive demand for the battery metal but others like Goldman Sachs are bearish and say there could be a supply glut as early as 2024.

READ: Lithium explorers are hot again. Here’s how Canaccord Genuity sees the rest of 2023 rolling out

Also on the list of most shorted stocks is copper-focused base and precious mining company 29Metals (ASX:29M), the world’s biggest rare earths producer outside of China Lynas Rare Earths (ASX:LYC), coal miner New Hope Corp (ASX:NHC) and Nickel Industries (ASX:NIC).

NIC in June announced it had begun commissioning its Oracle Nickel Project power plant in the Indonesia Morowali Industrial Park in Central Sulawesi.

It’s a key step to expanding production from the 70% owned project’s four RKEF lines, which have been restricted to 80% of nameplate due to power limits on the IMIP grid. The company said it plans to steadily increase to 130% of nameplate capacity.

The CXO, LKE, PLS, SYA, 29M, LYC, NHC & NIC Share price today:

Other shorted stocks worth noting

IDP Education Limited (ASX:IEL) is also on the list of short sellers. IEL specialises in international student placement services and high-stakes English language testing.

The company also operates English language schools in Southeast Asia and organises educational events and conferences across the globe.

IDP hasn’t had much news out in the past month but fell 15% on May 29 on no news. When queried by the ASX, IDP said Canada’s decision to recognise additional providers for English language proficiency for its visa scheme wasn’t expected to have a material impact on its FY23 revenue or earnings.

Several consumer discretionary stocks which could take the toll of higher interest rate rises and cost of living also continue to be targeted by short-sellers including JB HiFi (ASX:JBH), Harvey Norman Holdings (ASX:HVN), Baby Bunting (ASX:BBN) and Temple & Webster (ASX:TPW).