We'd be surprised if Stitch Fix, Inc. (NASDAQ:SFIX) shareholders haven't noticed that the VP & Chief Accounting Officer, Sarah Barkema, recently sold US$112k worth of stock at US$3.74 per share. Equally important, that sale actually reduced their holding by a full 68% which hardly makes us feel bullish about the stock.

Stitch Fix Insider Transactions Over The Last Year

In fact, the recent sale by Sarah Barkema was the biggest sale of Stitch Fix shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$3.74). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 68% of Sarah Barkema's holding.

Sarah Barkema sold a total of 98.27k shares over the year at an average price of US$3.34. 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!

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Insider Ownership Of Stitch Fix

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Stitch Fix shares, worth about US$70m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Stitch Fix Insider Transactions Indicate?

An insider sold Stitch Fix shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

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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 of direct interests only, but not derivative transactions or indirect interests.

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.