Shares of Stitch Fix (NASDAQ:SFIX) are up more than 15% following a massive insider purchase by Director Bill Gurley. Gurley serves as a General Partner at Benchmark, a venture capital firm. He ranks at number 24 on Forbes’ Top Tech Investors of 2022 list. In addition to SFIX stock, his previous investments include Uber (NYSE:UBER) and Zillow (NASDAQ:Z).
Shares of the personalized clothes delivery company have fallen by more than 65% year-to-date as consumers return to retail stores to shop. Steep competition in the fashion e-commerce space has also sent shares of the Covid beneficiary lower. Meanwhile, inflationary pressures have hurt Stitch Fix’s gross margins.
Despite all of these factors, Gurley remains confident in his company, as evidenced by his massive purchase. Let’s get into the details.
SFIX Stock: Director Bill Gurley Buys 1 Million Shares
On July 8, Gurley purchased one million shares of SFIX at an average price of $5.43 per share. After the purchase, he now directly owns a total of 2.15 million shares. He also owns 1.07 million shares indirectly through Benchmark and a limited partnership.
Besides Gurley, only one other insider has purchased shares on the open market this year. That insider is Working Capital Advisors, who classifies as an insider due to its stake that is greater than 10%. As of January 20, the firm owns 11.98 million shares, making it the largest shareholder.
Gurley’s purchase is interesting due to his role at Benchmark. It’s very apparent that shares of SFIX have suffered this year, leading investors to rationalize that Benchmark may take a greater stake in Stitch Fix, or even an activist stake, at a discounted price.
In the past 12 months, SFIX insiders have purchased 13.84 million shares while selling 8.44 million shares. In total, insiders have accounted for a net activity of 5.4 million shares purchased.
Who Else Is Betting Big on Stitch Fix?
Tracking institutional ownership is important, as these large funds provide liquidity and support for stocks. During the first quarter, 207 funds reported owning SFIX, a decline of 32 funds from the prior quarter.
Furthermore, the institutional put/call ratio sits at 0.81, up from 0.71 during Q4. This means more funds own call options against the company than put options. With that in mind, let’s take a look at the five largest shareholders.
- Working Capital Advisors: 11.98 million shares.
- Baseline Ventures: 11.88 million shares. Baseline’s position is accurate as of Q4 2021.
- Katrina Lake, found and former CEO: 10.12 million shares. Lake’s position is accurate as of Q4 2021.
- Vanguard: 7.96 million shares.
- BlackRock (NYSE:BLK): 6.32 million shares.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.