Key takeaways:

• Businesses that heavily reinvest for growth are among the targets of short sellers 

• Short interest in fund managers eases as market conditions stabilise

As the year draws to a close, there is little respite for the most shorted stocks on the ASX. Technology and resources stocks remain clear targets in short selling circles, while fund managers have also found themselves in the crosshairs.

Selfwealth does not offer short selling. Please note, data below is for information purposes and insights about sentiment, sourced from ASIC with a T+4 (4 trading day) delay. Individual short sellers report their short positions, so data is based on third-party input. There can be no guarantees regarding the accuracy of the data, and it should not be used as the basis for financial decisions.

Most Shorted ASX Stocks

1. BetMakers Technology (ASX: BET)

Short interest in betting technology firm BetMakers has continued to build over recent weeks. At the time of writing, approximately 15.2% of all shares on issue were sold short. That represents an increase of 110 basis points versus the month prior. ASX betting stocks have been out of favour for months now. That is likely due to the heavy business expenditure required in the industry at a time where the global economic outlook is uncertain.

2. Flight Centre (ASX: FLT)

After a long stint atop the list of the most shorted ASX stocks, Flight Centre drops one spot to second position. Short interest in the travel agency fell by 60 basis points to 14.7% of all shares on issue. Recently, industry peer Webjet (ASX: WEB) provided an upbeat guidance for the sector. That may have encouraged some shorters to close out their positions against Flight Centre.

3. Block (ASX: SQ2)

Afterpay owner Block is now the third most actively shorted stock on the ASX. An aggregate of 12.5% of all securities on issue are currently sold short. The increase witnessed over recent weeks could be due to anticipated challenges for Afterpay. According to the federal government, the buy-now pay-later segment faces stricter regulation, potentially similar to that of credit card providers.

4. Domino Pizza (ASX: DMP)

Shares in pizza chain Domino have rallied strongly throughout November. That re-rating has arguably put the stock back in the sights of shorters. As a result, short interest in DMP has increased by 50 basis points compared with this time last month. Accelerating inflation in Australia is the key concern that has split shareholders and shorters.

5. Megaport (ASX: MP1)

In an encouraging sign for shareholders, short interest in Megaport has decreased by 150 basis points over the last month. Most of that improvement occurred during the middle stages of November. Tech sentiment improved over this period, prompting some shorters to close their positions. At the same time, it appears as though some shareholders believe the stock has bottomed.

RankCompany

% Securities Reported as Sold Short

Nov, 2022

Monthly Change

1BetMakers Tech (ASX: BET)

15.2%

+1.1

2Flight Centre (ASX: FLT)

14.7%

-0.6

3Block (ASX: SQ2)

12.5%

+0.5

4Domino (ASX: DMP)

11.4%

+0.5

5Megaport (ASX: MP1)

10.4%

-1.5

6Sayona Mining (ASX: SYA)

9.6%

+1.5

7Perpetual (ASX: PPT)

9.4%

-1.5

8Nanosonics (ASX: NAN)

9.1%

+0.7

9Breville Group (ASX: BRG)

8.4%

-0.1

10Lake Resources (ASX: LKE)

8.3%

-0.6

*Data is T+4, based on information reported to ASIC for November 21, 2022; rounded to one decimal

Major Movers

1. 92 Energy (ASX: 92E)

At the time of writing, 92 Energy has recorded the biggest move in short interest over the last month. Aggregate short interest fell more than 600 basis points to just 0.9% of all shares on issue. The entirety of this drop took place at the start of November. There are no direct explanations for the turnaround. If anything, it may be the case that one individual shorter has closed a very large short position after the company reported optimistic drilling results.

2. Laramide Resources (ASX: LAM)

Short interest in Laramide Resources also appears to be controlled by one, or very few traders. On the 17th of November, short interest in LAM spiked from 0% to 3.1%, where it currently remains. No price-sensitive announcements were made that would have prompted the move, which means the market will need to come to its own conclusions as to why this stock is a short selling target. 

3. Magellan Financial (ASX: MFG)

Fund manager Magellan has faced a number of setbacks throughout 2022. From the loss of a key mandate, to ongoing fund outflows, and the departure of respected personnel, shares in MFG are down about 50% year-to-date. However, short interest has steadily decreased since early November, down from around 7.7% to 5.2% of all shares on issue. Improving market conditions may have played a role, albeit Magellan most recent FUM update still showed large outflows.

4. Australian Strategic Materials (ASX: ASM)

A month ago, short interest in Australian Strategic Materials represented 6.4% of all shares on issue. This number subsequently peaked at 7.1% on November 2nd, but it is now down to 3.7%. However, the decline is largely due to the company $40 million capital raise, which has significantly increased the number of shares on issue.

5. Capricorn Metals (ASX: CMM)

Last but not least, Perth-based gold producer Capricorn Metals is feeling a little less pressure after short interest in the stock decreased. Just 1.7% of all shares on issue are currently sold short, down from 3.6% last month. During this time, the company share price surged thanks to positive drilling results. It was also helped by upgrades to the ore reserves and mineral resources at its Karlawinda and Mt Gibson projects respectively.