Reported by: GuruVIX.com
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Avalonbay Communities Inc. (NYSE: AVB) is a real-estate investment trust (REIT) that focuses on redeveloping, developing, managing and acquiring high-quality apartment communities throughout the United States in high barrier-to-entry markets. The markets are located in the mid-Atlantic, Northeast, Southern California, Pacific Northwest and Northern California regions of the United States.
The company owns or holds a direct or indirect interest in 273 apartment communities. As a REIT, Avalonbay is not subject to federal corporate income taxes. In order to maintain this status, it must distribute 90% of its taxable income to stockholders. This alone makes AVB stock more enticing to investors. The communities contain 81,499 apartments spread across 12 U.S. states. AVB has developed a strategy that focuses on core markets that it has chosen and that has allowed it to become a leader in each of its markets. Of the 273 apartment communities, 27 are development communities with 7,935 homes, six are redevelopment communities with 2,248 homes, and 240 are current communities with 71,316 homes. On October 2, AVB stock
rose 0.93%, closing at $128.88 for the day. Overall, AVB hasn't had a secure presence in the stock market, rising at times and falling at others.
Avalonbay's 52 week-range since October 2012 displays that the constant up and downs have been occurring for quite some time. In that time, the stock has fallen as low as $121.33 and risen as high as $141.95. Because of the current possibility that Avalonbay shares could easily fall to or below their low point, many analysts rate the stock as a "hold."
AVB's fiscal year ends December 31. In most quarter ending June 30, AVB reported revenue growth of 52.60% and a gross profit of $1.04B. As of October 2, its return on assets was 1.75%, with a return on equity of 2.18%. Although quarterly revenue growth grew by almost 53%, quarterly earnings fell 76.90%, a huge drop that helps to explain its unstable stock price. On September 26, Avalonbay was one of five companies that went ex-dividend. An ex-dividend is defined as a time period between the announcement and payment of a dividend, while the record date is the day a shareholder must officially own the company's shares to be entitled to the dividend. Normally, the price of a stock will increase by the dividend amount as the ex-dividend date nears and then fall by that amount after the date. A big dividend distribution can lower the stock price by a large amount.
As of October 2, Avalonbay's balance sheet showed total debt of $5.85B, with only $111.15M in total cash. The balance sheet also showed operating cash flow of $585.56M and levered free cash flow of $639.89M. In Q3 2013, Avalonbay saw a loss in growth of 16.70%, while the sector as a whole showed a loss of 92.4%. On the positive side, it is estimated [MR2] that AVB will grow by 32.90% in 2014.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.