Short & Caught: Pilbara Minerals ASX's most shorted as lithium stocks targeted

Pilbara Minerals remains most shorted ASX stock as price of lithium fell heavily in 2023
Deep Yellow and Peninsula Energy among ASX most shorted stocks as uranium prices keep rising
Flight Centre short position falls after being ASX’s most shorted stock for much of 2022 and 2023

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
PLS	PILBARA MIN LTD ORDINARY	613,443,977	3,009,467,945	20%
SYR	SYRAH RESOURCES ORDINARY	97,536,755	675,897,730	14%
CXO	CORE LITHIUM ORDINARY	286,456,227	2,136,935,544	13%
DYL	DEEP YELLOW LIMITED ORDINARY	77,766,980	764,185,375	10%
SYA	SAYONA MINING LTD ORDINARY	937,642,474	10,293,296,014	9%
GMD	GENESIS MINERALS ORDINARY	99,797,607	1,099,862,562	9%
IEL	IDP EDUCATION LTD ORDINARY	24,424,939	278,336,211	9%
FLT	FLIGHT CENTRE TRAVEL ORDINARY	18,035,774	219,496,767	8%
LTR	LIONTOWN RESOURCES ORDINARY	198,392,924	2,421,984,755	8%
WBT	WEEBIT NANO LTD ORDINARY	13,683,890	188,044,564	7%
BOQ	BANK OF QUEENSLAND. ORDINARY	43,912,984	659,684,732	7%
HVN	HARVEY NORMAN ORDINARY	81,049,046	1,246,006,654	7%
PEN	PENINSULA ENERGY LTD ORDINARY	80,421,879	1,260,505,340	6%
LYC	LYNAS RARE EARTHS ORDINARY	56,277,340	934,694,336	6%
CHN	CHALICE MINING LTD ORDINARY	22,567,258	388,963,304	6%
LIC	LIFESTYLE COMMUNIT. ORDINARY	5,818,385	104,545,131	6%
IMU	IMUGENE LIMITED ORDINARY	398,655,270	7,169,086,938	6%
ACL	AU CLINICAL LABS ORDINARY	10,916,273	201,834,015	5%
SHV	SELECT HARVESTS ORDINARY	6,445,059	121,058,664	5%
JBH	JB HI-FI LIMITED ORDINARY	5,768,467	109,333,981	5%
MIN	MINERAL RESOURCES. ORDINARY	9,483,733	195,186,428	5%
NVX	NOVONIX LIMITED ORDINARY	23,720,945	488,733,461	5%
WEB	WEBJET LIMITED ORDINARY	18,337,931	386,352,154	5%
IFL	INSIGNIA FINANCIAL ORDINARY	31,120,540	666,626,753	5%
CUV	CLINUVEL PHARMACEUT. ORDINARY	2,311,946	50,127,270	5%
SLX	SILEX SYSTEMS ORDINARY	10,855,797	235,946,075	5%
PNV	POLYNOVO LIMITED ORDINARY	31,185,017	690,232,751	5%
BRG	BREVILLE GROUP LTD ORDINARY	6,426,248	143,425,348	4%
A2M	THE A2 MILK COMPANY ORDINARY	31,735,518	722,934,808	4%
STX	STRIKE ENERGY LTD ORDINARY	111,309,291	2,539,297,384	4%
SFR	SANDFIRE RESOURCES ORDINARY	19,748,484	456,992,404	4%
ZIP	ZIP CO LTD.. ORDINARY	41,679,723	971,984,648	4%
NEC	NINE ENTERTAINMENT ORDINARY	69,420,553	1,623,392,715	4%
HCW	HEALTHCO HEALTHCARE & WELLNESS REIT ORDINARY	23,571,589	568,274,049	4%
BLD	BORAL LIMITED. ORDINARY	45,264,803	1,103,088,419	4%
PPT	PERPETUAL LIMITED ORDINARY	4,598,228	113,334,546	4%
CXL	CALIX LIMITED ORDINARY	7,349,504	181,363,326	4%
TLG	TALGA GROUP LTD ORDINARY	15,276,867	379,754,172	4%
SUL	SUPER RET REP LTD ORDINARY	9,077,545	225,826,500	4%
DMP	DOMINO PIZZA ENTERPR ORDINARY	3,592,705	89,813,926	4%
AGY	ARGOSY MINERALS LTD ORDINARY	55,539,351	1,404,407,498	4%
ELD	ELDERS LIMITED ORDINARY	6,210,113	157,370,028	4%
NAN	NANOSONICS LIMITED ORDINARY	11,769,142	302,829,367	4%
AWC	ALUMINA LIMITED ORDINARY	110,815,949	2,901,681,417	4%
IGO	IGO LIMITED ORDINARY	28,825,590	757,267,813	4%
INR	IONEER LTD ORDINARY	80,104,314	2,111,412,147	4%
NIC	NICKEL INDUSTRIES ORDINARY	160,397,765	4,285,809,880	4%
NUF	NUFARM LIMITED ORDINARY	13,776,187	382,080,598	4%
BEN	BENDIGO AND ADELAIDE ORDINARY	20,306,732	567,764,728	4%
ARB	ARB CORPORATION. ORDINARY	2,923,169	82,220,441	4%
BRN	BRAINCHIP LTD ORDINARY	63,468,779	1,805,814,685	4%

Pilbara Minerals remains most shorted ASX stock

As falling lithium prices continue to weigh on ASX lithium stocks heading into 2024, Pilbara Minerals (ASX:PLS) remains the most shorted stock on the Aussie bourse after rising to top spot late last year.

The ASX 200 lithium company currently has 20% of its stock currently shorted, up from 19% in late November. Analysts say PLS is most likely targeted by short sellers as a pure play exposure to falling lithium chemical prices.

“Given that PLS is the largest, most liquid pureplay producer, it is the cleanest way for hedge funds to get borrow on the stock in large size and bet against the lithium price,” Seneca investment analyst Ben Richards told Stockhead late last year.

Lithium prices came off elevated highs last year due to softer than expected EV demand and destocking of Chinese inventories. Benchmark Minerals’ lithium price index fell ~78% in 2023.

Other lithium stocks are also being targeted by short sellers. Core Lithium (ASX:CXO), Syrah Resources (ASX:SYR), Sayona Mining (ASX:SYA), and Liontown Resources (ASX:LTR) also remain on the list of the most ASX shorted stocks.

However, according to Joe Lowry, host of The Global Lithium Podcast, who has been dubbed “Mr Lithium” and is one of the world’s foremost lithium market experts, the battery metals price could improve in 2024.

Lowry told Stockhead what happened in 2023 wasn’t a shock.

“I have been in this business for over three decades – lithium battery supply chain disconnects have happened multiple times,” he says.

“In 2022, all facets of the supply chain developed excess inventory, so in effect 2022 wasn’t as great a year as it looked, the price run up was unnecessary, and 2023 was a year of correction.”

Lowry believes the long term lithium demand story is still intact.

“I expect lithium chemical supply to be close to balanced but as inventories are rebuilt in China, price will begin to rise sometime in 2024,” he says.

The PLS,CXO,SYR,SYA &LTR share price today:

Resources stocks target of short sellers

Apart from lithium, several resources stocks were on the list of short sellers including Raleigh Finlayson’s ~$2 billion market capped gold miner Genesis Minerals (ASX:GMD).

Last year GMD completed the acquisition of the Leonora assets of St Barbara (ASX:SBM) and in December announced it had completed its off-market takeover of Dacian Gold (ASX:DCN).

The company’s strategy is “building a premium Australian gold business with sustainable, high quality, +300,000 ounces per annum production”.

Deep Yellow (ASX:DYL) and Peninsula Energy (ASX:PEN) have entered 2024 with 10% and 6% of their stock shorted respectively as uranium sentiment – and prices – are on the rise.

Uranium prices are now above the US$90/mark and surpassing a 16-year high.

DYL last week announced the follow-up drill program at its Barking Gecko prospect on EPL3669 is complete. The program included eight reverse circulation (RC) holes totalling 1,558m. Results include: 9m at 382ppm eU3O8 from 203m at TN294RC, and 3m at 260ppm eU3O8 from 64m at TN297RC.

PEN in November announced it had received binding commitments from new and existing institutional and sophisticated investors for a $50 million placement to progress pre-production works at Lance to achieve a production restart in late 2024.

Lynas (ASX:LYC), Chalice Gold Mines (ASX:CHN), Mineral Resources (ASX:MIN) and Sandfire Resources (ASX:SFR) were among other resource stocks targeted by short sellers at the start of 2024.

The GMD, DYL, PEN, LYC, CHN, MIN & SFR share price today:

Other stocks worth noting

Flight Centre (ASX:FLT), which was the most shorted stock on the ASX for much of 2022 and 2023, has seen its short position further improve at the start of 2024.

Several consumer discretionary stocks also continue to be targeted by short-sellers including JB Hi-Fi (ASX:JBH), Harvey Norman Holdings (ASX:HVN),Domino’s Pizza Enterprises (ASX:DMP) and Super Retail Group (ASX:SUL) as higher interest rates and cost of living pressures continue to bite.

Short-sellers also continue to bet against health stocks including cancer fighter Imugene (ASX:IMU) and Clinuvel Pharmaceuticals (ASX:CUV), which is focused on developing and commercialising treatments for patients with genetic, metabolic, systemic, and life-threatening acute disorders.

Morningstar recently announced a fair value estimate of $18 on CUV and says the stock currently looks undervalued, trading at an 11% discount.

The broker says the company’s key product, Scenesse, is the only approved treatment for phototoxic reactions specifically associated with erythropoietic protoporphyria (EPP), a rare genetic disease, the broker says.

“We suspect the market is likely too pessimistic on the speed and extent of Clinuvel’s commercial rollout of Scenesse for its existing indication which contributes 83% to our fair value estimate.”