Trade-Ideas LLC identified

Reynolds American

(

RAI

) as a post-market leader 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 $251.9 million.
  • RAI is up 2.1% today from today's close.

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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 3.4%. RAI has a PE ratio of 16. Currently there are 5 analysts that rate Reynolds American a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Reynolds American has been 6.1 million shares per day over the past 30 days. Reynolds American has a market cap of $60.8 billion and is part of the consumer goods sector and tobacco industry. The stock has a beta of 0.95 and a short float of 3.4% with 3.58 days to cover. Shares are up 33.6% year-to-date as of the close of trading on Wednesday.

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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, solid stock price performance, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 11.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 267.39% and other important driving factors, this stock has surged by 48.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • 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 291.9% when compared to the same quarter one year prior, rising from $492.00 million to $1,928.00 million.
  • The gross profit margin for REYNOLDS AMERICAN INC is rather high; currently it is at 55.93%. Regardless of RAI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RAI's net profit margin of 80.23% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to -$632.00 million or 3.80% when compared to the same quarter last year. Despite an increase in cash flow, REYNOLDS AMERICAN INC's cash flow growth rate is still lower than the industry average growth rate of 41.34%.

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