Insider Decision: Thomas W Toomey Offloads $1.71M Worth Of UDR Stock

Thomas W Toomey, Chairman and CEO at UDR UDR, executed a substantial insider sell on December 27, according to an SEC filing.

What Happened: Toomey opted to sell 45,000 shares of UDR, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction's total worth stands at $1,705,500.

The latest market snapshot at Thursday morning reveals UDR shares down by 0.1%, trading at $38.29.

About UDR

UDR is a real estate investment trust that owns, operates, acquires, renovates, develops, redevelops, disposes of, and manages multifamily apartment communities in targeted markets located in the United States. The company has two reportable segments; Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2021, and held as of December 31, 2022, and Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed-use properties. The company generates key revenue from Same-Store Communities.

Unraveling the Financial Story of UDR

Positive Revenue Trend: Examining UDR's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 4.81% as of 30 September, 2023, showcasing a substantial increase in top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Real Estate sector.

Profitability Metrics:

  • Gross Margin: With a low gross margin of 24.29%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

  • Earnings per Share (EPS): UDR's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.1.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 1.45, caution is advised due to increased financial risk.

In-Depth Valuation Examination:

  • Price to Earnings (P/E) Ratio: The current P/E ratio of 27.78 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

  • Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 7.8, UDR's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

  • EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 13.81 positions the company as being more valued compared to industry benchmarks.

Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.

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Why Insider Transactions Are Important

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Exploring Key Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of UDR's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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