AvalonBay Communities: 4 Different Insiders Have Sold Shares During The Last 30 Days

May. 5.14 | About: AvalonBay Communities, (AVB)

Summary

4 insiders sold AvalonBay Communities' stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

3 of these 4 insiders decreased their holdings by more than 10%.

AvalonBay Communities (NYSE:AVB) engages in the development, re-development, acquisition, ownership, and operation of multi-family communities in the United States.

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Insider selling during the last 30 days

Here is a table of AvalonBay Communities' insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Kevin O'Shea EVP April 30 747 No 7,379 shares 9.2%
William McLaughlin EVP April 30 14,047 No 51,757 shares + 62,176 options 11.0%
Stephen Wilson EVP April 28 5,831 No 26,313 shares + 22,500 options 10.7%
Leo Horey CAO April 28 15,012 No 46,221 shares + 46,286 options 14.0%
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There have been 35,637 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of AvalonBay Communities' insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 35,637 0
March 2014 0 0
February 2014 6,864 0
January 2014 0 0
December 2013 0 1,000
November 2013 0 0
October 2013 500 0
September 2013 0 0
August 2013 0 4,000
July 2013 3,555 0
June 2013 0 0
May 2013 7,875,000 0
April 2013 0 0
March 2013 2,508 0
February 2013 0 1,000
January 2013 0 0
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There have been 7,924,064 shares sold, and there have been 6,000 shares purchased by insiders since January 2013.

Financials

AvalonBay Communities reported the first-quarter financial results on April 23 with the following highlights:

Revenue $400.0 million
FFO $212.8 million
Net income $141.7 million
Net debt $5.8 billion
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The four insiders sold their shares after these results.

Outlook

AvalonBay Communities' second-quarter guidance is as follows:

EPS $1.46-$1.50
Projected FFO $1.62-$1.66 per share
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Competition

AvalonBay Communities' competitors include Equity Residential (NYSE:EQR) and Apartment Investment & Management Company (NYSE:AIV). Here is a table comparing these companies.

Company AVB EQR AIV
Market Cap: 17.76B 21.74B 4.56B
Employees: 2,900 3,600 1,932
Qtrly Rev Growth [yoy]: 0.38 0.21 0.00
Revenue: 1.58B 2.52B 951.58M
Gross Margin: 0.65 0.65 0.60
EBITDA: 1.02B 1.63B 538.43M
Operating Margin: 0.27 0.24 0.28
Net Income: 176.00M 39.73M -5.37M
EPS: 3.23 2.30 1.81
P/E: 42.44 26.13 17.35
PEG (5 yr expected): 1.92 1.92 2.33
P/S: 11.17 8.55 4.76
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AvalonBay Communities has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
EQR 0 70,178
AIV 0 47,948
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Only AvalonBay Communities has seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling AvalonBay Communities, and there have not been any insiders buying AvalonBay Communities during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. AvalonBay Communities has an insider ownership of 5.92%.

Before going short AvalonBay Communities, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/E ratio, relatively high P/S ratio, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.