These are the 10 most shorted ASX shares

Once a week, I like to look at ASIC's short position report to find out which ASX shares are being targeted by short sellers.

That's because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.

With that in mind, listed below are the 10 most shorted shares on the ASX this week according to ASIC.

The top 10 most shorted ASX shares

• Lotus Resources Ltd (ASX: LOT) remains at the top of the table despite its short interest falling sharply to 14.8%. Short sellers may still have concerns over the uranium producer's ability to ramp up production and generate attractive returns from Kayelekera.
• DroneShield Ltd (ASX: DRO) has seen its short interest fall materially to 14.3%. The counter-drone technology company remains heavily shorted, possibly due to its valuation and the uncertainty created by the ASIC investigation.
• Boss Energy Ltd (ASX: BOE) has jumped back into the top ten with short interest of 12.8%. Short sellers may be questioning the uranium producer's longer-term production outlook and whether Honeymoon can deliver the growth expected by the market.
• IperionX Ltd (ASX: IPX) has seen its short interest rise to 12.4%. The titanium company continues to make progress with its US operations, but short sellers may believe its valuation already assumes a significant amount of future growth.
• 4DMedical Ltd (ASX: 4DX) has short interest of 12%, which is down slightly week on week. This may be due to the medical technology company's valuation, which could be difficult to justify based on its current revenue base.
• PLS Group Ltd (ASX: PLS) has seen its short interest rise to 11.7%. Short sellers may be positioning for continued weakness in lithium prices, which would put pressure on margins and cash flow.
• Domino's Pizza Enterprises Ltd (ASX: DMP) has short interest of 11.7%, which is down slightly since last week. Short sellers may still want to see stronger evidence that its restructuring can restore earnings growth.
• Zip Co Ltd (ASX: ZIP) has returned to the top ten with short interest of 11%. This could reflect concerns that higher interest rates will impact the buy now pay later company's performance.
• Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest fall to 10.7%. Short sellers may remain concerned about luxury wine demand and how quickly the Penfolds owner can improve its performance in the Americas.
• Telix Pharmaceuticals Ltd (ASX: TLX) has short interest of 10.6%, down from 11% last week. Despite positive regulatory progress, short sellers aren't giving up on this one.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has positions in Domino's Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Domino's Pizza Enterprises, DroneShield, Telix Pharmaceuticals, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended Domino's Pizza Enterprises and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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