Short & Caught: The ASX small caps investors are shorting right now

Short & Caught is Stockhead’s fortnightly recap of which ASX small cap stocks are heavily shorted. Stocks that are shorted have investors betting that they fall.

Shorting works by selling stocks you do not actually own in the hope of buying them back at a lower price.

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

Despite stores reopening, retailer Myer (ASX:MYR) was once again the most shorted stock to the tune of over 100 million shares.

Other stocks appearing on the list despite either ramping up or preparing to ramp up operations again after COVID-19 closures included IVF provider Monash IVF (ASX:MVF), Moelis-backed pub operator Redcape Hotel Group (ASX:RDC) and theme park operator Ardent Leisure (ASX:ALG).

While some stocks claim to have benefited from COVID-19, this has not stopped them becoming shorters targets.

One example is fibre network operator Superloop (ASX:SLC) which said last month it had seen a spike in internet traffic with people working from home.

Although it expects to achieve the mid range of its guidance, it has $20m in short interest — a spike of 26 per cent in the last month.

While uranium prices are seeing a rise not witnessed in years it remains to be seen if this marks a return to uranium’s glory days in the mid-2000s.

Shorted ASX uranium plays include Peninsula Energy (ASX:PEN) and Boss Resources’ (ASX:BOE).

Investors still targeting (some) oil stocks

The small cap with the second most shorted shares it is Carnarvon Petroleum (ASX:CVN), with 90.3 million.

The company has seen a big increase in recent weeks despite oil prices recovering from their brief plunge into negative territory.

The fall caused Carnarvon and its operating partner Santos (ASX:STO) to defer a planned seismic acquisition over their breakthrough Dorado oil discovery in the North West Shelf offshore Western Australia.

They said drilling would recommence in 2021 subject to improving economic conditions.

On the flip-side other oil stocks with heavy short interest levels saw a decrease in recent weeks, one being Karoon Energy (ASX:KAR).