Short & Caught: Here are the 20 most shorted ASX stocks right now

In Short & Caught, Stockhead recaps the 20 most shorted ASX stocks.

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.

Code	Company	Price	Market Cap	Short Positions	% of Shorts	Sector
WEB	Webjet	4.98	$1.7B	44,908,956	13.25%	Consumer
TGR	Tassal	3.41	$720.7M	25,888,043	12.25%	Consumer
NST	Northern Star	12.09	$9.0B	85,592,743	11.55%	Resources
SDA	Speedcast	0.79	$189.3M	22,234,098	9.27%	Telecommunications
MSB	Mesoblast	2.56	$1.5B	51,581,547	8.78%	Health
ING	Inghams	3.61	$1.3B	32,036,418	8.62%	Consumer
WSA	Western Areas	2.52	$693.2M	22,565,848	8.20%	Resources
AVH	Avita Medical	7.08	$153.1M	5,320,581	7.95%	Health
MTS	Metcash	3.54	$3.6B	75,561,728	7.39%	Consumer
MYR	Myer	0.32	$258.7M	59,498,117	7.24%	Consumer
SSM	Service Stream	1.7	$698.6M	29,636,127	7.23%	Industrial
FNP	Freedom	3.01	$834.0M	19,242,182	6.94%	Consumer
FLT	Flight Centre	14.88	$3.0B	13,699,746	6.88%	Consumer
IVC	InvoCare	11.64	$1.7B	9,882,895	6.86%	Health
RSG	Resolute	0.69	$761.6M	75,466,887	6.84%	Resources
A2M	A2 Milk	10.2	$7.6B	50,726,825	6.83%	Consumer
EML	EML Payments	4.27	$1.5B	23,415,982	6.47%	Tech
EOS	Electro Optic Systems	5.29	$791.2M	8,926,500	5.97%	Tech
NEA	Nearmap	2.33	$1.2B	28,380,259	5.76%	Tech
ALK	Alkane	0.815	$485.2M	32,724,577	5.50%	Resources

Most shorted ASX stocks

Travel agent Webjet (ASX:WEB) has 13.25 per cent of its shares shorted. Also on the list is its peer Flight Centre (ASX:FLT).

You’d be hard pressed to find industries harder hit by COVID-19 than travel and tourism with demand all but wiped out and continuing to be pent up by snap closures of Australian state borders.

But the companies and their industries have put their hopes in a vaccine to bring things back to pre-COVID norms at least in Australia. Analysts have also noted COVID-19 gave travel agencies the chance to rationalise their brick and mortar branch network.

Taking out the second and third positions on the list of most shorted ASX stocks are seafood company Tassal (ASX:TGR) and gold miner Northern Star Resources (ASX:NST).

The latter company is a curious member of the list as it is one of the best performing stocks in the last decade and is currently merging with fellow gold miner Saracen Mineral Holdings (ASX:SAR).

The deal will create a new top-10 global gold company worth $16 billion and targeting production of 2 million ounces of gold.

Another gold stock on the list is the smaller Alkane (ASX:ALK) which in 2019 came across an incredible hit at its Boda prospect in NSW — 502m at 0.48 grams per tonne (g/t) gold and 0.2 per cent copper, 211m from surface.

It is continuing to explore the prospect and has continued to report results but hasn’t been able to re-generate excitement in its investors.

Shorted stocks facing adversity

Back to shorted companies undergoing operational adversity and A2 Milk (ASX:A2M) is also on the list.

The company initially shrugged off the impact of COVID-19 but was hit when one of its biggest corporate daigou customers was impacted by Melbourne’s lockdown last year.

Avita Medical (ASX:AVH) is another long term success story hit by COVID-19. It took off in 2018 and 19 after winning FDA approvals and gaining sales in the US but it came slowing down when COVID-19 hit.

One stock you might have expected to gain from COVID but hasn’t is funeral company InvoCare (ASX:IVC) – the death numbers feared from COVID-19 haven’t eventuated and it was hit by restrictions on funerals. It too has been heavily shorted.