Insiders In Stitch Fix Left Out From 14% Price Rise After Disposing Stock

Although Stitch Fix, Inc. (NASDAQ:SFIX) shareholders have enjoyed a great week with the stock up 14%, insiders who sold stock over the past year haven't fared as well. The return on their investment would have been much higher had they held on to their stock.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Stitch Fix

The Last 12 Months Of Insider Transactions At Stitch Fix

The Chief Legal Officer, Casey O’Connor, made the biggest insider sale in the last 12 months. That single transaction was for US$62k worth of shares at a price of US$5.14 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$4.29. So it is hard to draw any strong conclusion from it.

Stitch Fix insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Stitch Fix better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 19% of Stitch Fix shares, worth about US$92m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Stitch Fix Insiders?

It doesn't really mean much that no insider has traded Stitch Fix shares in the last quarter. We don't take much encouragement from the transactions by Stitch Fix insiders. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Stitch Fix and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.