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Saturday, 06/19/2004

Property Investment
By Nich Sheldon
AVB - AvalonBay Communities, Inc

Company Description

AvalonBay Communities, Inc., headquartered in Alexandria, Virginia, currently owns or holds an ownership interest in 144 apartment communities containing 41,907 apartment homes in ten states and the District of Columbia, of which eleven communities are under construction and one community is under reconstruction. AvalonBay is in the business of developing, redeveloping, acquiring and managing apartment communities in high barrier-to- entry markets of the United States. More information on AvalonBay may be found on AvalonBay's Web site at

[Source: Company Press Release]

Reasons to Invest:

This week's Drip of the Week fashions a 5.01 percent annual dividend yield, which calculates out to a quarterly dividend of $0.70 per share. AvalonBay Communities (NYSE:AVB) not only provides a handsome dividend, but they also have been riding through a March 2003 regression channel with ease. In fact over the past 15 months the stock has gained more than twenty points and is showing no signs of immediate weakness.

On June 16th, AvalonBay's Board of Directors announced that they had approved their second quarter dividend of $0.70 per share owned. The dividend is to be distributed on July 15th, 2004, to shareholders on record as of July 1st. The company is expecting to see a 7.72 percent dividend percentage growth rate over the next three years, and 7.50 percent over the next five years.

First quarter figures tell a story of good things to come for AVB, as their revenues reportedly rose six percent to $156.9 million. Net income (before an accounting change) increased by 19 percent to $17.4 million. The company noted that these results reflect a higher rental and other income received as well as reduced interest expenses.

In regards to price performance, over the past four weeks AVB has ranked in the top twenty percent of its industry. They have a 52-week price change of 32.50 percent, and 16.23 percent in relation to the S&P 500. On Friday (June 18th, 2004) Avalon Bay set a new 52-week high of 56.19.

The Point and Figure Chart on AVB shows a PnF Pattern of an Ascending Triple Top Breakout. The bullish price objective for AVB has been revised to 75.00 (close to 20 points higher than Friday's close).

Technically speaking AVB looks like a solid play not only for dividend investors but also for options and long-term traders like. The stock has boomed six points higher since May 10th, setting new 52-week highs over the past week of trading. As noted earlier, AvalonBay has been in a regression channel since March of 2003 and had not tested the bottom of its channel until April-May of this year. Once the bottom bar of this channel held up as support the stock has skyrocketed out of its consolidation pattern, tacking on point after point along the way.

The weekly chart has just recently sparked a fresh buy signal on the MACD indicator. The Stochastics indicator has AVB in overbought territory, yet the stock remains on a buy signal. The simple 10-DMA is resting just over the 20-DMA which is usually an indication of further bullishness.

The monthly and quarterly charts looks much the same as the weekly chart, as the MACD and Stochastics indicators are both showing buy signals, and the 10-DMA is resting over the 20-DMA.

This ends another exciting episode of the Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the limelight.

Until Next Week,
Nich Sheldon

Broker Recommendations

Strong Buy         0
Buy                0
Hold               0
Sell               0
Strong Sell        0

Brokers Covering   0

DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: No
Temper Enrollment: Yes

Min/Max Investment = $100-$100,000/quarter

Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A

Transfer Agent:
First Union Nat'l Bank

Corporate Headquarters:
2900 Eisenhower Avenue
Suite 300, Third Floor
Alexandria, VA 22314
Phone: (703) 329-6300
Fax: (703) 329-1459


Copyright 2003

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