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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.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Kevin O'SheaEVPApril 30747No7,379 shares9.2%
William McLaughlinEVPApril 3014,047No51,757 shares + 62,176 options11.0%
Stephen WilsonEVPApril 285,831No26,313 shares + 22,500 options10.7%
Leo HoreyCAOApril 2815,012No46,221 shares + 46,286 options14.0%

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.

MonthInsider selling / sharesInsider buying / shares
April 201435,6370
March 201400
February 20146,8640
January 201400
December 201301,000
November 201300
October 20135000
September 201300
August 201304,000
July 20133,5550
June 201300
May 20137,875,0000
April 201300
March 20132,5080
February 201301,000
January 201300

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

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

Competition

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

CompanyAVBEQRAIV
Market Cap:17.76B21.74B4.56B
Employees:2,9003,6001,932
Qtrly Rev Growth [yoy]:0.380.210.00
Revenue:1.58B2.52B951.58M
Gross Margin:0.650.650.60
EBITDA:1.02B1.63B538.43M
Operating Margin:0.270.240.28
Net Income:176.00M39.73M-5.37M
EPS:3.232.301.81
P/E:42.4426.1317.35
PEG (5 yr expected):1.921.922.33
P/S:11.178.554.76

AvalonBay Communities has the highest P/S ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
EQR070,178
AIV047,948

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.

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