Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Reynolds American

(

RAI

) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Reynolds American as such a stock due to the following factors:

  • RAI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $230.6 million.
  • RAI has traded 61,633 shares today.
  • RAI is trading at a new lifetime high.

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More details on RAI:

Reynolds American Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products in the United States. It operates through RJR Tobacco, American Snuff, and Santa Fe segments. The stock currently has a dividend yield of 3.6%. RAI has a PE ratio of 26.8. Currently there are 4 analysts that rate Reynolds American a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Recommends

The average volume for Reynolds American has been 2.8 million shares per day over the past 30 days. Reynolds American has a market cap of $40.0 billion and is part of the consumer goods sector and tobacco industry. The stock has a beta of 0.81 and a short float of 5.1% with 5.26 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Reynolds American as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, increase in net income, expanding profit margins and solid stock price performance. 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:

  • The revenue growth came in higher than the industry average of 22.7%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Tobacco industry and the overall market, REYNOLDS AMERICAN INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Tobacco industry. The net income increased by 7.2% when compared to the same quarter one year prior, going from $363.00 million to $389.00 million.
  • The gross profit margin for REYNOLDS AMERICAN INC is rather high; currently it is at 58.53%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.91% trails the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.06% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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