Trade-Ideas LLC identified

AvalonBay Communities

(

AVB

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified AvalonBay Communities as such a stock due to the following factors:

  • AVB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $116.2 million.
  • AVB has traded 77,499 shares today.
  • AVB is trading at 1.56 times the normal volume for the stock at this time of day.
  • AVB crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AVB:

AvalonBay Communities, Inc. engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. The stock currently has a dividend yield of 2.9%. AVB has a PE ratio of 3. Currently there are 8 analysts that rate AvalonBay Communities a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for AvalonBay Communities has been 681,500 shares per day over the past 30 days. AvalonBay has a market cap of $22.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.18 and a short float of 2% with 2.87 days to cover. Shares are up 2.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AvalonBay Communities as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • AVB's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • AVALONBAY COMMUNITIES INC has improved earnings per share by 6.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AVALONBAY COMMUNITIES INC increased its bottom line by earning $4.92 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($5.08 versus $4.92).
  • 38.70% is the gross profit margin for AVALONBAY COMMUNITIES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.56% is above that of the industry average.
  • Net operating cash flow has increased to $255.52 million or 34.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.13%.

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