Stitch Fix Up 30%, Insiders Still Down After US$5.4m Purchase \
Insiders who purchased US$5.4m worth of Stitch Fix, Inc. (NASDAQ:SFIX) shares over the past year recouped some of their losses after price gained 30% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$968k since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Stitch Fix
The Last 12 Months Of Insider Transactions At Stitch Fix
Over the last year, we can see that the biggest insider purchase was by Independent Director John Gurley for US$5.4m worth of shares, at about US$5.43 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.46). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. John Gurley was the only individual insider to buy during the last year.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Stitch Fix Have Sold Stock Recently
The last quarter saw substantial insider selling of Stitch Fix shares. In total, insiders sold US$112k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Stitch Fix Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 18% of Stitch Fix shares, worth about US$91m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Stitch Fix Tell Us?
Insiders sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Stitch Fix has 4 warning signs we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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